Bertinoro Initiative 1999

Transcription

1 FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Italian Ministry of Foreign Affairs General Direction of Cultural Relations Bertinoro Initiative 1999 Private and Public Sector Co-operation in National Land Tenure Development: Peaceful Enjoyment of Land and Associated Real Property Rights The 1999 Cervia International Land Tenure School Cervia, Italy 3-15 September The 1999 Bertinoro International Seminar Bertinoro, Italy 8-13 November Landau Network - Centro Volta

2 Table of contents 1. The Bertinoro Initiative 1999: Introduction Jim Riddell, FAO Land Tenure Service 2. The 1999 Cervia International Land Tenure School 2.1 Introduction 2.2 Recommendations 3. The 1999 Bertinoro International Seminar 3.1 Introduction 3.2 Issues 4. Experiences from Southeastern Europe 4.1 Analysis of some major land property issues in the Republic of Bulgaria Evloguiev I. Mladenov 4.2 Land reform in the Former Yugoslav Republic of Macedonia and beyond David Harris 4.3 Public and private sector cooperation in developing the Hellenic National Cadastre Panos Lolonis 4.4 Cadastre and land administration in Romania Catalina Nicolae 4.5 Land consolidation practices in Turkey Hasan Dursun 5. Comparative Experiences from other Countries 5.1 Policies for local (municipal) government: Land and assets (Australia) John Fisher 5.2 Land information systems and good governance (Canada) Ian Methven 5.3 Development of information models to evaluate, measure, and manage risk impacts of Government policies on agriculture (Canada) Bob Whitelaw 5.4 System management in land tenure: Experiences in land registration and property management in Eastern Germany after reunification (Germany) Gernold Schindler

3 5.5 I.M.I.S.-The Integrated Municipal Information System (Italy) Pierluigi Potenza 5.6 The Commuter Project in the context of SIGNuM (Metropolitan Numeric Geographic Information Service) (Italy) Marco Mondini 5.7 Considerations on the value added of the Dutch Kadaster in the Netherlands Hendrick Westerbek Annex 1: List of participants Annex 2: Programme of the 1999 Cervia International Land Tenure School Annex 3: Programme of the 1999 Bertinoro International Seminar

4 The Bertinoro Initiative Introduction Jim Riddell, Chief, Land Tenure Service, FAO Good land tenure systems are a necessary foundation for stable social relations among the citizens of any society. The need for drawing on the carefully built up knowledge of how to recognise, record and transact peoples property rights in land has probably never been more immediately pressing. The sudden collapse of the centrally planned economies and the rapid integration of Central and Eastern European (CEE) Countries into the international economy mean that the entire land information systems of industrialised nations have to be reorganised in as short a time as possible. Not only will these systems have to be adapted to a liberalised economic and political system, but they will have to be adaptable to the constant change that is the hallmark of the market economy. CEE Member States are in the process of creating a level of services needed to stimulate active market participation, on the one hand, while promoting interventions for protecting property rights through a modern land information system that eliminates the continued fragmentation into ethnic and associated rivalries, on the other. The Bertinoro Initiative was started in 1997 by FAO and the Government of Italy to assist transition countries in Central and Eastern Europe in their development of effective and efficient land tenure and land administration systems. The Initiative comprises highlevel technical seminars held in Bertinoro and an International Land Tenure School convened in Cervia. The Bertinoro Initiative plays a vital role in building cooperation and transferring knowledge to CEE countries. It has provided a forum for participants from 18 CEE countries and 9 western European countries, as well as others from North America and Australia. In 1997, the Bertinoro International Seminar focused on Northeast Europe and the following year it addressed the Black Sea countries. In 1999, the Bertinoro Initiative was directed towards Southeast Europe and was broadened to include the International Land Tenure School with courses on contemporary land administration and technology. This School was held in Cervia, Italy as part of the 5 th Summer School on Post-Communist Transition and European Integration organised by the University of Bologna and the International Network on Europe and the Balkans. The School was followed by the 1999 Bertinoro International Seminar which had as its theme: Private and Public Sector Co-operation in National Land Tenure Development: the peaceful enjoyment of land and associated real property rights. The Cervia International Land Tenure School and the Bertinoro International Seminar followed the format used successfully in previous years when similar themes were addressed by participants. 1

5 2. The 1999 Cervia International Land Tenure School 2.1 Introduction As part of the Bertinoro Initiative, the Food and Agriculture Organization of the United Nations (FAO), in collaboration with the Italian Ministry of Foreign Affairs, organised the 1999 Cervia International Land Tenure School. Its focus was on Southeast European countries and was held as part of the 5 th Summer School on Post-Communist Transition and European Integration organised by the University of Bologna and the International Network on Europe and the Balkans. The International Land Tenure School took place in Cervia, Italy, from 3 to 15 September 1999 and brought together participants and lecturers from Albania, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Germany, Hungary, Italy, Moldova, Romania, the Russian Federation, Switzerland, Turkey, Ukraine and the USA. The School received technical and organisational support from the following institutions: Italian Ministry of Finance Province of Bologna, Italy ITALECO S.p.A. (IRI Group), Italy EURIMAGE, Italy Associazione Bancaria Italiana, Italy University of Bologna, Italy University of New Brunswick, Canada University of Budapest, Hungary University of S. Petersburg, Russian Federation Katholieke Universiteit, Belgium Overseas Projects Corporation of Victoria, Australia John Fisher Assets Consulting, Australia Bundesanstalt für Agrarwirtschaft, Austria Gesellschaft für Technische Zusammenarbeit (GTZ), Germany Russian Federation State Land Committee Federal Directorate for Cadastral Surveying, Switzerland General Directorate of Rural Services, Turkey Embassy of Ukraine The School s objective was to identify the institutional innovations and developments needed to ensure the peaceful enjoyment of property in the countries of Southeast Europe and the roles that land tenure experts in the private and public sectors should play. Many countries in the region have undergone, or are currently engaged in, territorial disputes within their national boundaries. Thus, for these countries, it is vital to implement land tenure institutions that use modern land use and land administration practices in order to attract both national and international investment. The range of topics covered by the lecturers provided a stimulating view of how OECD countries were addressing related issues. There is clear consensus that there are no easy or simple answers but the students identified what they saw as promising directions to be pursued. The 5 th Summer School, opened by Prof. Bianchini, Central Co-ordinator of Europe and the Balkans International Network, brought together the participants of the International Land Tenure School and the students attending courses prepared by the University of 2

6 Bologna on environmental and economic development in the Balkan countries. Mr. J. Riddell, Chief, Land Tenure Service, FAO, transmitted the compliments of Dr. Jacques Diouf, Director General of the Food and Agriculture Organization of the United Nations (FAO), for this important endeavour to promote the co-operation between FAO and Southeast European countries. The Italian Minister of Foreign Trade, Piero Fassino, encouraged an open discussion on the development of the European Community and the integration of Southeast European countries. The importance of European and international co-operation in view of the enlargement of the European Community was emphasised by Mr. Gianfranco Cicognani, Italian Ministry of Foreign Affairs, Mr. Vittorio Prodi, Province of Bologna, Prof. Pier Ugo Calzolari, University of Bologna, and Prof. Martellini, Landau Network-Centro Volta. The Ambassador of Ukraine, Mr. Volodymyr Yevtukh, participated in the final session, as did the representatives of ITALECO S.p.A. (IRI Group), Mr. Alfonso Silvestre and Mr. Domenico Torlucci. FAO and the Italian Ministry of Foreign Affairs acknowledge the technical and scientific support given to the School by Professors Stefano Bianchini, Andrea Segrè and Luigi Bruzzi, University of Bologna, as well as by Dr. De Santis, Ministry of Finance. 2.2 Recommendations The Cervia International Land Tenure School placed special emphasis on the improvement of legal and administrative issues in land tenure and land markets, the involvement of the private sector in land administration, and the appropriate use of recently developed data management technologies in Southeast European countries. The recommendations described below are proposals from the participants in the School on how land administration systems in these countries could be improved Legal framework issues Efficient land administration systems are based on a clear legal framework. Since many Southeast European countries are experiencing uncertainties in defining and operationalising legal rights in land and other assets, the creation of a co-ordination body (CB) in each country would be helpful in establishing an efficient land administration system. This is particularly important in countries where several ministries are directly involved in these issues. Such a CB could bring together relevant ministries and national agencies and organisations to prepare a strategic plan for the development of an efficient land administration system. Several countries of the former Soviet Union have found an interagency conciliation procedure to be useful. Under this approach, a round table at the presidential level thoroughly reviews proposed programmes or legislation and concludes with an agreed upon plan of action to be signed as a Presidential Decree. The School participants emphasised that internal structures of a CB or presidential level round 3

7 table should be supported by strategic and operational plans that are both transparent and goal oriented. The time limit on the mandate of a CB should be conditioned by the unique problems in a specific country and could be expected to last longer in large countries than in small ones. Furthermore, it was felt that a CB could only be effective if it is successful in delegating its competence in transferring property rights to a range of decentralised bodies (regional offices). It should avoid becoming another bureaucratic structure Administrative issues In order to create a new and more efficient administrative structure, reliable data sources are essential for all levels (i.e., a CB as well as the other units). Property-related data that are to be collected for a particular country will be effective only if they address the concerns of the population. That is, in order for people to view modern land tenure and administration institutions as being valid, these institutions should reflect the society s cultural values concerning property. Thus, the participants emphasised repeatedly the importance of effective services received at the local administrative level and good management capacities of policy makers (CB, Ministries, agencies, etc). The participants further felt that it was necessary to involve private contractors who could assume tasks such as data collection and updating. To ensure high quality standards, professional organisations should be encouraged (or established) to control the methods and establish quality standards of private contractors. The main long-term objective is to transform decentralised units into service providers so that work can be carried out quickly and efficiently. A clear legal framework for property transactions therefore attracts cross border investments which, in turn, are the basis for new employment opportunities and economic development in the target countries. Administrative issues: A short checklist should include 1. Co-ordination Body (CB), limited time mandate Standards National policy Legal framework 2. De-centralisation Data source for CB Low administrative level Management capacity Private contractors and professional organisations 3. Creation of land units (LIS) Transfer of rights, legal aspects 4. Focus on information Reflect property concerns of population 5. Focus on efficiency Creation of new employment opportunities 6. Provision of services 7. Cross-border investments 4

8 2.2.3 Land Markets The professional experience of the School participants supported the conclusion that the construction of a clear and transparent market in land is a basic condition for general economic development in a country. Land markets are also essential for needed infrastructure (communication, transportation and services) to emerge. Such infrastructure is required to encourage and support investments that in turn create much needed employment opportunities. An open market in land promotes the development of different kinds of settlements. Urban areas are mainly the place of food consumption whereas peri-rural areas are considered to be the location of food production. Peri-urban areas respond to different demands such as agricultural production and recreational activities. In Southeast European countries the development of markets in general, and housing markets in particular, often do not proceed in concert with the development of institutions. As a result, the development of land registration and cadastral institutions is of particular importance in order to resolve uncertainties and questions regarding restitution and the subsequent development of land. This underscores the inadequacy of relying solely on legislative changes to provide the institutional basis for effective transactions. Land Land Markets: A short checklist should include 1. Necessity for economic development Construction Investment/infrastructure Employment 2. Urban/peri-urban/peri-rural areas Irregular development of markets ahead of institutions Housing market will develop 3. Need for improved records Cadastres, registries Resolving uncertainties/restitution, etc. 4. Growth of conveyancing industry Real estate agencies/land agents Notaries Private survey companies/agents Mortgage market still lagging behind Important: Development of professional standards 5. Characteristics of rural land market Dominated by leasing arrangements Different values - waiting to see real values emerge * Symbolic, family, emotional, etc. restitution issues * Historic inheritance - size limits, etc. * Urban-rural small holdings: recreation, vacation 6. Farm land rationalisation/consolidation Revitalise agricultural land value Private sector role Important: Leasing market and mortgage lending institutes 7. Land assessment approach Planning, investment and taxation purposes transactions and the supporting institutions also require a professional culture (pattern of expected behaviour) so that land users can learn to depend on fair and accurate service. 5

9 A market in land stimulates the growth of conveyancing industries. Professional businesses such as real estate agencies, land agents, notaries, and private survey companies are some examples of the diversity of new employment opportunities in urban and rural areas that can be created by good land tenure and administration institutions. The important role of professional standards was again emphasised. At present, the mortgage market in Southeast European countries still lags behind demands and should be improved. The same applies to credit and related financial institutions. The participants felt that it is unrealistic to expect the private sector to develop needed financial services by itself. In analysing the role of institutional development for administration and the provision of financial services, the School participants noted that rural land markets differ from urban markets in many ways. The participants noted that current urban markets are characterised by full transfers (purchase and sale) whereas rural markets are dominated by partial transfers (leasing arrangements for agricultural purposes). Values attached to rural land are diffuse and owners are often not willing to sell their property. In part, this may be due to them waiting to see the real value emerge from competing economic agriculture and rural enterprise developments. There is a need for the rapid development of capacity to define clear, transparent local principles (rules) for land valuation and market-oriented evaluation. The creation of maps showing indicative prices for land would be useful for assisting people identify new possibilities for putting their land (often newly restituted) into more effective use. They would also be important for tax purposes since modern property taxes are increasingly being used to support local initiatives. Restitution of property rights is a special technical, political and legal problem characteristic of these countries in their transition from social property to liberal governance principles. Because restitution must be handled on a case by case basis, it is strongly influenced by family and emotional attachment to property. Additionally, historic inheritance practices result in many claimants when land is being resituated. Even where land was never socialised, land holdings are usually fragmented and small. This explains the small size of parcels being entered into land administration systems in Southeast European Countries. Farmland rationalisation and consolidation is of great importance. An improved leasing market should lead to consolidation in order to revitalise agricultural land values. The meaning of land consolidation should not be restricted to land distribution but should also embrace the many aspects that lead to land development in the broadest sense (development of other economic activities such as commerce, services for the rural population, etc.) It was concluded that the private sector survey companies should play a major role, as well. 1 1 The urban and peri-urban smallholdings often reflect mainly recreational purposes and indeed may contribute to good environmental use as well as an important supply of garden food in the family diet. 6

10 2.2.4 Public and Private Sector The state in Southeast Europe has historically played the dominant role in land tenure administration. It is not surprising that, with the changes taking place in the sub-region, it was normally assumed that government agencies would be responsible for all the work involved in the transition from social property to liberal property systems. The sheer quantity of work to be done in transforming these property systems more or less at once far exceeded the capacity of any of the governments. The participants noted that it is becoming increasingly realised that if land tenure services are to be delivered to citizens, the private sector would have to play a bigger role. The first three places where this is occurring are surveying, data collection and conveyancing. In general, in Southeast European countries surveying and data collection are in public hands. To create a clear, accessible land market situation high quality-control surveying and data collection should be increasingly executed by the private sector. A basic condition for this is free market competition. This should be coordinated and supervised in the initial stages by a co-ordination body (discussed above) within the framework of a business plan. This approach should ensure a balance between public and private sector involvement. A clear legal framework and free access to information are necessary to achieve this. Quality control is another important issue. First registration can be delegated to private contractors who should have to adhere to professional standards. Professional associations should play a key role in ensuring constant and efficient quality control of private and public professionals. Furthermore, an appropriate standard for technical equipment is required in order to guarantee high quality results. Large projects might remain in public hands whereas smaller ones could be carried out by private contractors. From an economic point of view, private contractors should be more flexible when purchasing and using new software. Private and Public Sector: A short checklist should include 1. First v. subsequent registration Surveying and data development private sector Need for business plan: * Agency * Private Firm Important: Business plan (Co-ordinating Body) 2. Legal framework 3. Quality Control First registration - contractor Subsequent registrations - development of professions and professional associations Equipment/standards Data exchange standards Important: Co-operation of professions with the state and international professional bodies 4. Sale, transfer, conveyancing Information (private sector - real estate etc.) Private sector role in facilitating transactions (notaries, etc.) Final archive of transaction - state Important: Publicity, civil society 5. Finance, credit, investment capital Private sector poorly developed now. 7

11 Data exchange using international standards should help to make the land market situation in a country as clear as possible. This, in turn, should be attractive to national and foreign investors. The transfer of tasks from public to private actors should be carried out with respect to the following recommendations. Private actors (real estate agents, etc.) should process information needed for buying and selling property. Furthermore, the private sector should be involved in facilitating transactions (through notaries, etc.) but the final management of transactions should remain in public hands. This, of course, emphasises the need to operationalise new legal frameworks so that governments are able to deliver the services demanded by their public. By turning time consuming and technologically expensive tasks over to private sector contractors, governments should be better positioned to focus on their main tasks of quality assurance and guaranteeing the fair and transparent nature of land tenure procedures Technology The participants, who included those with expertise in the use of modern geomatics technology, observed that the private sector is generally able to allocate resources to new technology more efficiently than the public sector can. The school concluded that government agencies should increasingly be responsible for quality control functions and should not place high priority on acquiring rapidly developing tools. Instead, the private sector should be encouraged to invest in the use of new technologies. Technology: A short checklist should include 1. Technologies should be added in a competitive way to achieve: quick and efficient services cost reduction Better services 2. Governments should establish technical standards for new technologies to avoid private providers using different standard systems. 3. Security standards such as the digital signature should be widely introduced in order to implement the interchange of information. 4. European Quality Standards should be adopted in Southeast European countries. 5. Computerised cadastral LISes should provide information on environmental protection as well. 6. Data collected by new high-resolution satellite missions will be available at the beginning of year These satellite data should be suitable for the generation of new cadastral systems, for updating existing ones, and for land use data collection. 8

12 2.2.6 Conclusions The 1999 Cervia International Land Tenure School provided an important opportunity to promote and strengthen the relationship among experts. The participants appreciated the technical and scientific support of FAO, the Italian Ministry of Foreign Affairs and the University of Bologna as host organisation at the School. The understanding of the development of land tenure in countries around the world is essential to carrying out the analysis and evaluation of opportunities and constraints of land tenure reform within CEE countries. Achieving widespread support by citizens and private sector organisations in CEE countries will require improved co-ordination of international efforts. The participants paid particular attention to the introduction of financial programmes promoted by different international bodies such as the United Nations, the European Union, the World Bank and the Italian Government. The participants concluded by expressing their view that the International Land Tenure School should continue in the future. By being able to bring together a number of international resources, UN technical agencies such as FAO are able to play a special role in providing training opportunities. 9

13 3. The 1999 Bertinoro International Seminar 3.1 Introduction The Food and Agriculture Organization of the United Nations (FAO), in collaboration with the Italian Ministry of Foreign Affairs, organized the 1999 Bertinoro International Seminar as part of the Bertinoro Initiative during 8 to 13 November. The participants of the Seminar, which took place at the Bologna University Residential Centre in Bertinoro, Italy, came from Austria, Bulgaria, Canada, France, Germany, Greece, Hungary, Italy, the Netherlands, Romania, Russian Federation, Switzerland, Turkey, United Kingdom and Federal Republic of Yugoslavia. The Seminar received technical assistance from the following institutions: Italian Ministry of Finance Province of Bologna, Italy Region of Bologna, Italy ITALECO S.p.A. (IRI Group), Italy University of Bologna - Europe and the Balkans International Network, Italy InCEI-Iniziativa Centro-Europea, Italy Bertinoro University Residential Centre, Italy Landau Network-Centro Volta, Italy The World Bank, Hungary Centre of Legal Competence (CLC), Austria Ministry of Agriculture, Forestry & Agrarian Reform, Bulgaria Whitelaw Consulting & Research Inc., Canada FIEF, France Akademie für Bodeninformation und Liegenschaftsmanagement e.v., Germany Gesellschaft für Technische Zusammenarbeit (GTZ), Germany Ktimatologio S.A., Greece Dutch Kadaster, The Netherlands General Directorate of Rural Services, Turkey Federal Directorate of Cadastral Surveying, Switzerland Ordnance Survey International, U.K. The objectives of the Seminar were the identification of institutional innovations and developments needed to ensure the peaceful enjoyment of property in Southeast Europe and the ways of involving land tenure experts from the private sector in this process. The Seminar was designed to facilitate open discussion about the constraints and difficulties encountered as countries transform their land administration systems and how national and international organizations such as the United Nations could assist them in this regard. It is vital for countries in the region to overcome these difficulties and establish land tenure institutions with modern land use and administration practices in order to attract both national and international investment. An example for bilateral co-operation and technical knowledge transfer demonstrated at the Seminar was the official agreement between the Russian Federation State Land Committee, the Province of Bologna and the Italian cadastre company ITALECO S.p.A., IRI Group. This agreement, signed by Mr. Valerij Alakoz (Director of the Russian Federation State Land Committee), Mr. Vittorio Prodi (President of the Province of 10

14 Bologna) and Mr. Domenico Torlucci (Director, ITALECO), confirmed the strong interest of all partners to collaborate in the future. The participants in the 1999 Bertinoro International Seminar acknowledged the scientific, technical and financial support given to the Bertinoro Initiative by FAO, the Italian Ministry of Foreign Affairs, ITALECO and the Province of Bologna. 3.2 Issues Background Countries in Southeast Europe have largely completed the process of redistributing collective properties. However, land markets for freehold and leasehold properties face constraints since the registration of real estate, with its enhanced security of property rights, has met with limited success. In large measure this is due to the restrictive and complicated legal and administrative procedures in place. Urgently needed investments for the agricultural sector are lacking because access to financial services is limited. A further constraint towards more efficient farm units is land fragmentation which originated with the creation of individual rights after the fall of the communist regimes. Land fragmentation has a negative effect on agricultural development and also hampers public and private investments (e.g., infrastructure) in rural areas and the allocation of land for non-agricultural purposes (e.g., industrial and manufacturing sites). Improving land tenure arrangements would increase the chances of creating new employment opportunities and services and, in general, of bettering the livelihoods of citizens. Devising new land tenure arrangements should take into account the need to ensure sustainability of resources and should consider ecological impacts. Clear and transparent ownership rights and responsibilities are vital elements for natural resource management activities such as soil and water conservation. The protection of areas such as watersheds, river basins and national parks or smaller scaled biotopes and cultural monuments may require consolidation of fragmented parcels. Although considerable efforts have been directed towards land registration and cadastral operations in transition countries, primary emphasis has been given to technical activities. Less attention has been paid to the business side of these agencies. Better management skills and expertise are needed to improve the effectiveness of agencies and also to help foster a private sector with the capacity to carry out work under contract for the public agencies. Agencies should identify their major constraints and needs and develop strategic plans to address them. During the Bertinoro Seminar, participants identified the current situation in their countries, along with the opportunities and resources needed to improve the process in developing efficient and effective land administration systems. The sections below describe thematic approaches and country experiences drawn from the discussions at the Bertinoro Seminar. They provide brief illustrations of issues presented 11

15 and observations regarding the improvement of land administration systems in Southeast European countries Land Consolidation Turkey, which started its land consolidation programme in the 1960s, recognised that rural development was hindered by land fragmentation. Land consolidation is viewed as a multi-purpose activity with social, economic and environmental aspects. Agricultural development is closely connected with the establishment of small and medium sized industries (e.g., food and textile industries) and services (e.g., tourism) in rural areas. Given the extensive task of land consolidation, procedures must be simple, quick, and inexpensive. Farmland in Turkey is characterised by a variety of geographical, climatic, social and economic conditions. Despite the long programme of land consolidation, the process of fragmentation still continues because of: Inheritance law Property laws and laws of commerce which bias the effect of land consolidation in the rural context Land use policies Absence of agricultural infrastructure Leasing of state land and distribution of state land to farmers Land consolidation must be approved by the government in order to facilitate its implementation. There may be a need to address general legal conditions connected with consolidation that hamper the whole process. In addition, emotional aspects have to be considered. Many farmers are reluctant to accept new tenure arrangements, even if this ensures an economic improvement for the rural areas. After thirty years of experience, Turkey illustrates the positive effects of land consolidation on the social and economic development in rural areas. Particular attention should be paid to soil and water resources which play a very important role in the country and are subject to environmental protection. Land consolidation helps increase awareness among the rural populations so that they protect better their environment Development of a Land Market Land restitution in Bulgaria is nearly completed. Most former state-owned property is now in the hands of private owners who are free to hold, manage, lease and sell their land, and to purchase other lands. Land restitution and privatisation represent the first steps to be taken for accession to the European Union. 12

16 One of the major problems Bulgaria faces after restitution is the development of a land market. Most properties are fragmented and farmers do not enjoy efficient and profitoriented agriculture. A land consolidation bill is being prepared for discussion and approval by the Parliament. At present, farmers try to consolidate land by selling, buying or leasing it, thereby allowing them to achieve profitable arable plots without a governmental programme of land consolidation. This situation emphasises the need to develop a land market that guarantees legal security and stability for agricultural production and trade. It is still difficult to obtain information on different types of land, and on procedures to buy, sell and lease it, but the Ministry of Agriculture, Forestry and Agrarian Reform is taking steps to improve the situation. These include creation of a database with relevant information, and establishment of a computerised information system on the supply of land in order to make the land market clearer and more transparent. From a legal point of view, the cadastre and registration law is necessary for the improvement of land administration in the country. Major constraints are the legal controversies between the cadastre and the property register, the legal consequences of registration, and the involvement of private surveying experts. In view of the development of an efficient land administration system, the matter of legal issues should be taken into consideration Institutional Development The transition from a communist system to a market economy in Romania has required the modernisation of the cadastre and land registration system. Achieving an efficient system requires the following: Protection of real property rights Support for the real property taxation system Provision for security of credits Development and monitoring of the land market Protection of real property rights Mechanisms for resolution of controversies Facilitation of land reform for agriculture Improvement of urban planning and development of urban infrastructure Protection of the environment At present, responsibility for land registration and cadastre is in the hands of a number of ministries and agencies which require co-ordination. An inter-ministerial committee formulated a law to promote the new legal framework for a general cadastre. This law was approved by parliament in The main task of the general cadastre is to identify and register land within each territorial administration and to relate each property to a specific owner. All the necessary details should be based on a common information source. 13

17 To accomplish this task, the general cadastre was established as an agency under the authority of the Prime Minister s Office, thus being financially independent from other ministries. The three main functions (technical, legal and financial) of the general cadastre have been delegated to sub-agencies. The National Office of Cadastre, Geodesy and Cartography (NOCGC) is responsible for coordination and implementation of the technical and economic functions of the general cadastre. The Ministry of Justice is assigned responsibility for legal issues such as the identification of owners. The Ministry of Finance is charged with collecting data for land taxation in collaboration with the NOCGC. Coordination between these agencies is important in order to avoid overlapping and duplication of tasks Land Ownership and Registration Reform The Former Yugoslav Republic of Macedonia (FYR Macedonia) is confronted with an urgent need to implement land ownership and registration reforms in order to promote economic growth through the real estate market. The first step has been the creation of appropriate legal and institutional provisions for creating a land market. Title registration is being unified with cadastral mapping in order to place property information within a single registration system. De-centralised registration offices, which are guaranteed by the state, are to be established. To implement these objectives, the following constraints are being addressed: Inadequate legal basis for a land market Lack of legislation to allow sporadic registration of real estate rights Incomplete and inadequate legal rights and real estate records Long and bureaucratic procedures for mortgage foreclosure Lack of cooperation between regional cadastre offices and basic courts Slow systematic registration of real estate rights Lack of an organisation responsible for coordinating registration of property rights Lack of a clear plan of action to resolve these issues as a whole. The EU PHARE land reform project in the FYR Macedonia encountered problems that occur also elsewhere in the region. Technical and IT issues tend to be overemphasised, leading to adoption of inappropriate technology. Instead, efforts should be focused on the essentials of developing land markets. Ineffective management and inadequate training can contribute to project failures. Institutional issues must be coordinated in order to avoid overlapping responsibilities between private and public organisations as well as between public institutions (such as ministries, cadastral offices, etc.) A strong governmental support is essential for the successful implementation of land reforms. Land reform is closely connected with policy and legislation that introduce institutional changes. This should be done in concert with local experts who can articulate the needs and constraints of their institutions. In the long term, projects should focus on 14

18 key aspects of economic development such as ensuring secure land rights and improving access to credit rather than attempting to achieve too many objectives in too short a time Urban and Peri-Urban Agriculture and the Establishment of Private Property Rights Urban agriculture can be defined as a farming-related activity conducted within the purview of urban authorities. Urban agriculture may take place within urban jurisdictions but yet at some distance from urban centres, while peri-urban agriculture takes place beyond often well defined urban boundaries even though its outer boundaries may be less well defined. 2 At the beginning of the 1990s, the Russian Federation implemented a policy of free distribution of land to citizens. This policy, carried out by the local governments, was intended to create: Personal household plots Collective orchards and vegetable gardens Individual housing and family farms Dachas One form of urban or peri-urban agriculture common in Eastern European countries is the dacha. Dachas were introduced in the 1960s and 1970s when governments granted city dwellers perpetual use rights over small land parcels of an average size of 6,000 to 10,000 square meters. Dachas helped relieve societal tensions when food supply ran short in cities. At the beginning of the 1990s the land reform promoted private ownership of dachas Public and Private Sector Co-operation The development of the Greek Cadastre is taking place through the involvement of the public and private sectors. The establishment of a legislative infrastructure, the organizational structure of the cadastre, and the collection and valuation of data for initial cadastral registrations are the result of a fruitful collaboration between the private and the public sector. This collaboration has gone through a complex development process and much uncertainty has been reduced since the initiation of the Greek Cadastre Project in The executive management of the Cadastre Project has been able to overcome various obstacles, to build consensus among the interested parties involved even at political level, to keep the project on track, and to avoid major setbacks. 2 (See 15

19 4. Experiences from Southeastern Europe 4.1 Analysis of some major land property issues in the Republic of Bulgaria Evloguiev I. Mladenov The status of land reform and restitution Land reform and restitution of property in the Republic of Bulgaria have proved to be slow and complex processes because of difficulties with legislation, the change of 7 governments, and the introduction of 25 amendments to the Land Restitution and Agricultural Land Use Law. The Government has nearly completed these important processes. Statistical data for the entire country show that as of 30 September 1999 land property rights had been restored to existing or restorable original boundaries or through land division plans for 53,310,000 dca. 3 This figure represents 94.57% of the 56,370,000 dca of land specified for restitution. Restitution statistics are as follows: 14,077,000 dca (24.97%) are restored to existing or restorable original real boundaries 39,233,000 dca (69.60%) are restored through land division plans. Land property rights were restored regarding 1,004,000 dca of agricultural land during the month of September 1999 compared with 11,031,000 dca for the January - August 1999 period. 2,187,223 decisions of Land Commissions have entered into force. These are accompanied by drafts which, according to the Land Restitution and Agricultural Land Use Law, have the purpose of ascertaining notarial deeds. These decisions concern 48,065,542 dca, representing 90.16% of restored land. There are 3,183 Agricultural Cooperatives established under the Cooperatives Law and registered in Court. They cultivate 22,884,000 dca of lands. Compensation under the Land Restitution and Agricultural Land Use Law The amount of compensation due for the 3.5 million dca of agricultural lands is approximately 1.3 billion leva. The Land Restitution and Agricultural Land Use Law specifies clearly when compensation is to be provided only through nominal compensation bonds and when people can choose the way in which they wish to be compensated (with land or through nominal compensation bonds). The various possibilities are: Compensation through nominal compensation bonds and land from state or municipal land funds for settlers of Aegean Thracia whose lands were used to pay off state debts in accordance with the Agreement of 1964 between the Republic of Bulgaria and the 3 1 dca = 1000 sq. meters 16

20 Greece Royalty. This option is also available to Bulgarian citizens in Southern Dobrudja who lost land to Romania. Compensation to landowners only through nominal compensation bonds for lands over the 200 or 300 dca restored. Compensation with lands only from the municipal land fund and/or through nominal compensation bonds to landowners whose lands were destroyed and could not be restored because of reasons specified in the Land Restitution and Agricultural Land Use Law. Of the above-mentioned 3.5 million dca, citizens have requested compensation in the form of about 800,000 dca having a value of 300 million leva. Citizens will be compensated through nominal compensation bonds, equal to 1 billion leva, for the remaining 2,700,000 dca. It is anticipated that the nominal compensation bonds will be distributed as follows: About 600 million leva for purchasing lands from the State Land Fund through tenders About 200 million leva for acquiring ownership of lands and Agricultural Cooperative Farm farmyards that have been liquidated About 200 million leva for participation in privatization Free arable lands from the State Land Fund total 960,000 dca. About 500,000 dca of these lands are expected to be put up for sale by tender through nominal compensation bonds and the remaining 460,000 dca will be used for: land settlement of landless citizens (250,000 dca) carrying out structural and sector policy in agriculture (210,000 dca) The value of land secured with nominal compensation bonds from the State Land Fund is 190 million leva, i. e., the average sale price of one dca will be about 3 times higher than the initial tender price. According to the provisions of the Land Restitution and Agricultural Land Use Law, nominal compensation bonds can be used for: Purchase of agricultural land from the State Land Fund by tenders Acquisition of ownership of lands and of farmyards of the Agricultural Cooperative Farm and other similar organizations that have been already liquidated Participation in privatization Free transfers Acquisition of ownership of forests and lands of the Forest Fund The opportunity to transfer nominal compensation bonds is expected to result in a decrease in the number of bond-holders and an increase in the value of bonds held by individuals. This will enhance the target-oriented and effective use of nominal compensation bonds in four different fields of their application as regulated in the Land Restitution and Agricultural Land Use Law. 17

21 An active market is envisaged for the nominal compensation bonds and, if these expectations materialise, their selling price will be relatively high, especially when used as payment of privatised assets in the field of agriculture. Concerning compensations, the Ministry of Agriculture, Forestry and Agrarian Reform (MAFAR) has undertaken the following measures: Orders have been issued by the Minister of Agriculture, Forestry and Agrarian Reform. These orders define the compensation due to Bulgarian citizens or their heirs for the loss of lands used to pay off the State debt in accordance with the 1964 Agreement for resolving financial issues and developing economic cooperation between Bulgaria and Greece. Two million certificates for nominal compensation bonds have been issued by the Ministry of Finances. These certificates are protected from forgery. New regulations have been prepared to address recent changes in the Land Restitution and Agricultural Land Use Law and have been coordinated with the institutions concerned. The regulations include Amendments and Supplements to the Regulation concerning the Provisions, Delays and Orders to issue and receive nominal compensation bonds, and the Orders for transfer and payment through such bonds. Land commissions shall be provided with software programs for: ½ Determination of the amount and value of compensations due. The value is determined according to the Regulation concerning the provisions for establishing current market prices of agricultural land. The value is based on the average price of a dca by categories of agricultural lands in community lands. This approach excludes subjectivism in preparing valuations. ½ Preparation of certificates for nominal compensation bonds. ½ Registration and control system to be used for the certificates issued. This software as well as that for preparing certificates for nominal compensation bonds, were submitted to the Land Commissions on 11 October A Regulation concerning tenders for the sale of lands of the State Land Fund using nominal compensation bonds has been prepared and is awaiting approval by the Minister of Agriculture, Forestry and Agrarian Reform. It is envisaged that tenders will be held successively at municipal, regional and national levels. Holders of nominal compensation bonds, whose certificates are issued by a Land Commission in the framework of a same municipality and region, will be able to participate in municipal and regional tenders for estates announced by the State Land Fund. The proposed measures will allow compensation to be paid in municipalities and regions where lands are not restituted. Every holder of compensation bonds can participate in the national tender regardless of where the lands to be compensated are located. 18

22 30 November 1999 was the deadline for the MAFAR to define, by region, what lands of the State Land Fund would be involved in the tenders. Depending on the readiness of the land commissions, initial tenders could be held at the beginning of the year 2000 in different municipalities of the Dobrich, Razgrad and Silistra regions. The compensation process stipulated in the Land Restitution and Agricultural Land Use Law will be concluded in mid The restitution of forest property and the Forest Fund land rights Property rights regarding forests and Forest Fund lands that were taken from their owners are being restituted to Bulgarian physical and legal persons or to their heirs. These rights are being restituted according to the location, surface area and boundaries current at the time of their taking only if the parcel boundaries were existing or restorable when the law entered into force. When the original boundaries cannot be determined, lands are restituted with forests of the same size and in the same community and/or in a neighbouring area using the State Forest Fund. The forest fund lands of the Republic of Bulgaria total 38,775,000 dca. Physical and legal persons have submitted claims for almost 6,000,000 dca. A similar surface area is to be restored for municipal forests. Nearly 1,500,000 dca of private forests, which were destroyed through no fault of their owners, are allowed to be restituted without being subject to ownership documentation. Claims regarding such forests are to be proved before special commissions formed by virtue of an Order of the Minister of Agriculture, Forestry and Agrarian Reform. The Law allows lands to be restituted after owners have proved their claims for property rights. Land Commissions have already received and considered all property requests supported by documentation. At present, they are receiving requests for restitution of property rights of forests and forest fund lands not subject to ownership documentation. Ten pilot projects are being prepared with a view to identifying the precise methodology, technical issues, instructions and stages of restitution of forest property. Rules for the methods of holding tenders, pricing and establishing forest divisions by territories are being developed. Contracts with licensed companies for forest division works will be entered into until the end of This is one reason why the process for final restitution of forest property is expected to last until the end of the year A part of the property restitution, accompanied by a draft and a paper for accession to an estate, will be implemented in the beginning of Private property is sacred and inviolable The first stage of the Land Reform concludes with the restitution of agricultural lands. At present, controversial issues concern matters regarding landowners who are to assume the responsibility of managing and holding lands within a market-oriented environment. 19

23 Land restitution by documents is a legal and technical act that entitles landowners or their heirs to decide how to best manage and cultivate the land in accordance with their own requirements. They are free to decide whether to cultivate the land directly; to lease it to cooperatives, associations or individual leaseholders; or to sell or exchange it. For the sake of security, landowners should enter into written contracts with leaseholders (cooperatives, associations or individuals). Such contracts should specify leasing arrangements including rental income, etc. During the past two years, a number of laws for private property protection and support for agricultural producers were passed in Parliament and implemented by the Government. The main objective of recent changes to the Land Restitution and Agricultural Land Use Law is to accelerate the restitution of property rights and to facilitate the development of an agricultural land market. A Land Commission s Decision for property restitution, accompanied by a draft of an estate, has the same validity as an ascertainment by notarial deed. Agricultural landowners who acquire land are exempted from paying state and local taxes for a period of 5 years to foster land market development. The changes and supplements to the Lease Law on Agriculture have led Bulgarian agriculture to be market-oriented. Constraints concerning the maximum size of leased land parcels as well as maximum lease-contract delays have been revoked. Contractual rights and obligations of lenders and leaseholders are clearer and more feasible. The Law on Cooperatives was passed in Parliament and Amendments and Supplements were approved. Radical changes were made in the statutes of cooperatives regarding the rights and obligations of their members, thus providing greater protection to agricultural landowners. The major change is that agricultural land cannot serve as an in-kind instalment. A landowner who leases land to a cooperative for use and cultivation must receive payment in money and/or agricultural products. Property of the cooperative should not include real rights upon agricultural land and such rights will not be set up in favour of the cooperative. Landowners who cultivate their land on their own receive fiscal facilities and mechanisms for financial support. The Agricultural Producers Law exempts them from VAT and Profit Tax. The State Agriculture Fund provides a number of preferential credit lines for financial support to foster the production of miscellaneous agricultural crops and the purchase of agricultural technology, highly productive animals, etc. At present infringements do occur on community lands where restitution has been completed. Boundary markers of fields and estates have been destroyed and rural estates are being used illegally by legal or physical persons without the agreement of landowners. In these cases the rights of landowners are not always protected. Interdepartmental Commissions were established to monitor and control the land reform in every 20

24 municipality in order to reduce and eliminate these infringements. The Commissions will inspect these cases and will prosecute those responsible for infringements. The sooner the people realise that they are the legal private owners of the restored land, with rights to hold it, to manage it, and to derive profits from it, the sooner they will establish the effective agricultural structures needed to lead the revival of agriculture in Bulgaria. The Land Consolidation Law is being prepared and its discussion and adoption by the Parliament is forthcoming. Information system for land market support With the conclusion of the land restitution process, preconditions for land markets are established. A real land market does not yet exist although some transactions have been made between Bulgarian citizens. In many cases buyers are the leaseholders who cultivate the land. They purchase the land from the owners in order to add it to the land they already have under cultivation. This is a practical way of land consolidation. Land leasing also takes place and forms part of the land market. One of the main reasons for the underdeveloped land market is the lack of financial resources of people involved with agriculture. Other reasons include the lack of security and stability in the agricultural production and trade process. There is also a lack of information about the supply and demand of agricultural land, including information about the different types of land and how to obtain them. For this purpose the Ministry of Agriculture, Forestry and Agrarian Reform is creating an information system to support land markets. The information system will contain a large database on the supply and demand of land in order to help land market agents. The information system will enable Land Commissions to exchange computer-based information and current land maps, thus making the land market clearer and more transparent. The adoption of the Cadastre and Registration Law is of great importance for Bulgaria. The major problems that have to be resolved regarding this Law are the legal controversies between the Cadastre and the Property Register, the legal consequences of registration, and the role of surveyors in the private sector. 21

25 4.2 Land reform in the Former Yugoslav Republic of Macedonia and beyond David Harris Introduction The purpose of this paper is two-fold: To describe the process of land reform in the Former Yugoslav Republic of Macedonia To define lessons and guidelines for land reform projects based on the author s experience in Central and Eastern Europe during the past 5 years Background and history The former Yugoslav Republic of Macedonia 4 is a landlocked country about 25,000 square kilometres in area with a population of about 2,000,000. It gained its independence from Yugoslavia in November It has common borders with Greece, Albania, Bulgaria and Yugoslavia. For centuries Macedonia was part of the Ottoman Empire, this rule only ending in the Balkan wars of After the 1st World War, Macedonia was part of the Kingdom of Serbs, Croats and Slovenes, which was renamed Yugoslavia in After the 2nd World War, Yugoslavia became the Socialist Federal Republic of Yugoslavia with Macedonia being one of the 6 constituent Republics in the Federation. 5 During Ottoman times, land ownership rights were recorded on documents known as Tapia. These were effectively certificates of title, and still exist today. A form of Tapia was also used from 1931, under a Yugoslav law that is still in force. In parts of the country Tapia are still created and used as essential formal evidence of ownership rights. Official records of Tapia are recorded in books in the basic courts. Also recorded in the courts are records of mortgages in Intabulation books. The weaknesses of these two sets of records are that they are difficult to search conclusively and that they are not always up to date. There also exists a cadastre (dating from the 1930s) which is essentially a record of property boundaries and possession although this record has a role today in defining de facto ownership in some parts of the country. This old cadastre is often out of date, although the textual records are computerised. The 1990s: time to reform The FYR Macedonia declared independence from Yugoslavia in November Like other countries in Eastern and Central Europe at the same time, the challenges it faced 4 Abbreviated to FYR Macedonia in this paper; this has been the official name of the country, as recognized by the United Nations since The others being Bosnia-Herzegovina, Croatia, Montenegro, Serbia and Slovenia. 22

26 were to make the transition from a centrally planned and controlled economy to a democratic market economy. However, due to geographical and political reasons, reforms in FYR Macedonia have been very slow. The European Union s Phare programme only began work in the country in 1996, with the first projects starting in 1997 (including one to help implement land reform). With regard to land ownership, FYR Macedonia differs from many other former communist countries. While all urban land is state owned, only 20% of arable land is state owned. Of this arable land, much was reclaimed land (e.g., marshland turned into arable land) rather than nationalised land. However, the formal state records of ownership are not as comprehensive or as well ordered as in those countries further north which benefited from the introduction of the Germanic-Austrian system of Grundbuch (Landbook) for recording land ownership rights. In 1986 a Law on Survey, Cadastre and Registration of Real Estate Rights was enacted. This law was designed to replace the existing Cadastre, and to create a new, unique countrywide record of ownership rights, land parcels and buildings. In effect it replaces the whole range of existing records of rights (Tapía, Cadastre, Intabulation books) described earlier. However, the Law was not implemented until the early 1990s. Since then, progress on a systematic survey and adjudication of properties and associated rights has been very slow. This is due to the large amounts of data being collected (survey data in particular) and the inherent problems associated with registering rights (e.g. lack of documentary evidence, lack of claims, the need to treat each claim individually). This is the situation that faces a country urgently needing to implement reforms to land ownership and registration, so that the development of the economy is supported through dealing and investment in real estate. The main problems can be summarised as: All urban land is still in state ownership An inadequate legal basis for a land market No legislation to allow sporadic registration of real estate rights Incomplete and inadequate records of legal rights in real estate Long and bureaucratic procedures for mortgage foreclosure Lack of cooperation between regional cadastre offices and basic courts Slow systematic registration of real estate rights No organisation with a remit to coordinate registration of real estate rights Lack of a clear plan of action to resolve these issues as a whole PHARE Land Reform Projects in FYR Macedonia PHARE Phase 1 The first EU Phare land reform project in FYR Macedonia started in December The contract was won by the Ordnance Survey of Great Britain in association with the Royal Agricultural College (UK) and Registers of Scotland (the Scottish Land Registry). The overall objective of the project as stated in the Terms of Reference was: 23

27 The creation of appropriate legal and institutional arrangements for the development of land and real estate markets which: Is property based (and not an owner s based deeds registration system) Unifies title registration with cadastral mapping Unifies all properties into a single registration system Registration by the state is guaranteed Establishes de-centralised registration offices" The contractors have carried out a full and thorough assessment of the current situation with respect to land ownership and associated issues, and made detailed recommendations and proposals for change to meet the demands of a market economy with a free market in land. The issues examined were: Legislation. Existing legislation relating to real estate was reviewed and recommendations made for change. Advice has been given on the drafting of new and revised laws, some of which have been enacted; other draft laws are awaiting allocation of Government and Parliamentary time. Land registration. The current situation was critically reviewed and detailed proposals made for reform, including changes to legislation, institutional responsibilities and detailed procedures for registering rights. A study tour of 3 west European countries (England, Austria and Netherlands) was made to compare different arrangements for registering rights. De-nationalisation of land. The fundamental importance and urgency of denationalising state-owned land was stressed and advice given about the design of procedures for implementing denationalisation. 6. IT systems. Existing systems were assessed and detailed proposals made for upgrading to support the changes proposed for registration of rights. The concept of private sector involvement was introduced, for example in carrying out the conversion of existing manual records into digital form. Mortgages. The importance of mortgages for financing investment was explained. Advice was given for improving existing legislation about mortgage foreclosure and registration of mortgages. Real estate valuation. The requirements for valuation skills in the public and private sectors were assessed. Training was done in Skopje and the United Kingdom to 6 A denationalisation law was enacted in 1998, but in March 1999 the Constitutional Court rejected a number of key articles in the law, before it was implemented. A revised law is currently being drafted. 24

28 introduce market valuation skills to the country and set them in the context of a functioning land market. Physical planning. Existing laws and the implementation of procedures for planning were examined, including the introduction of private sector companies into the planning process. PHARE Phase 2 The plan is that a pilot project to implement the proposed reforms will commence next year. This work should include a pilot registration system in a regional office of the Republic Geodetic Institute (RGU) incorporating important links to the basic court and notaries. Fundamental to the success of such a project will be the enactment of new legislation relating to denationalisation of land and improved registration procedures. In particular sporadic registration of property rights will be introduced. Common problems in the design of land reform projects The following are based on the author s experience of land reform projects in a number of central and east European countries, as a consultant or as a visitor. An over emphasis on technical and IT issues. Information technology provides important and powerful tools to record, edit, analyse, combine and distribute both textual and graphical data. However, IT is a set of tools, not the final result. The end result (in the context of land market development in Eastern Europe) must be to contribute to land market development, not to exploit the latest technology per se. Ignoring soft issues, e.g. management, publicity and training. A problem related to that preceding is the tendency to ignore the management and training issues required to successfully implement and maintain improved IT systems. These can be likened to the oil that lubricates an engine. An over-emphasis on survey and mapping. Cadastral maps are one element of a cadastral system, helping to describe properties and their associated boundaries. However, the cost of initial survey and update is usually a relatively high proportion of the total cost of registration. Attempts to reduce the cost by relaxing accuracy requirements and making more use of existing mapping are not always given the attention they deserve. A failure to focus on the overall objective of developing the land market. Projects ostensibly designed to develop the land market are often focussed on the improvement of the land registration system. This is a laudable aim, but does sometimes result in a blinkered approach in trying to develop an over specified registration system, which burdens rather than enables land market development. Failure to address or resolve institutional issues. Any system of land registration will require a clear definition of responsibilities between organisations (public and private sectors) and the cooperation and exchange of information between those 25

29 organisations. Within the context of Central and Eastern Europe, this often requires changes to existing responsibilities. The best technical system in the world will not produce useful results if the institutional issues are not resolved. Lessons to learn The following are some of the factors that will influence the success of land reform projects. Government support at the highest level. This is particularly important where the project is dealing with policy and legislative issues, or aiming to implement institutional changes. The Government support should be reflected in high level chairing of the project steering committee, and regular briefing information should be produced specifically for the Government. Good counterpart staff so that transfer of skills can take place. These counterparts should include senior officials with commitment (i.e. sufficient time to devote to the project) and vision. High level Government supports on its own is not sufficient for success. Set long term objectives with short/medium term milestones. The latter have to be ambitious yet achievable and must be prioritised. One of the major weaknesses of many projects is trying to do too much in too short a time. Implementing change is never easy; too much change will cause confusion. Provide a combination of Technical Assistance / training / equipment. All of these elements are important for successful land reform projects. Develop people s vision of the wider issues. Projects should focus on key needs of the economy. In the case of land reform this should be aimed at developing conditions for a land market to thrive. Efficient land registration systems and cadastres are not ends in themselves. There is enormous benefit to a country s economy if the economic potential of real estate is released, for example by enabling mortgages to be easily obtained. Secure land rights are a pre-requisite for this. The private sector Land reform in transition economies is, not surprisingly, managed and implemented largely by the public sector. In general the private sector has not had a major role to play (although there are exceptions). One reason for this is that a private sector with the necessary skills does not exist, but also it has not been encouraged. Areas where the private sector could potentially be used are: Cadastral surveys Real estate valuation Conversion of manual records to digital form 26

30 However, in order to introduce private sector activities successfully, a number of factors need be considered: The use of the private sector needs to be managed by the public sector, which will require resources (i.e. people and equipment). The public sector must set clear specifications for the private sector to work to; the public sector will need to work closely with contractors to develop clear and workable specifications. The public sector must carry out effective quality control of private sector work (sufficient resources must be allocated for this, probably about 10% of contract value, but initially this figure will be higher). Private sector activities should be introduced gradually; both the public and private sectors need to build up experience of this way of working. There must be fair and open competition for contracts so that the benefits of competition are gained. 27

31 4.3 Public and private sector cooperation in developing the Hellenic National Cadastre Panos Lolonis Abstract This paper describes the cooperation between the public and private sectors in Greece for the development of the Hellenic Cadastre. Specifically, the paper outlines the basic principles that guide the development and operation of the cadastre, describes the procedure that is followed to collect and validate the data, presents the major public and private sector agencies that are involved in the development process, analyses the functional interrelationships among those agencies, describes the main fields within which the cooperation takes place, and elaborates on the characteristics of the cooperation. In addition, it discusses the difficulties that are encountered in the establishment of the cooperation and presents the conclusions. Introduction The aim of this paper is to describe the interaction between private and public sector agencies involved in the development of the Hellenic Cadastre. The necessity of such cooperation is dictated by the multidisciplinary nature and scale of the task, the influences of the legislative and institutional environment, the significant number and power of affected stakeholders, and the tight time limits within which the development must take place. This cooperation started at the beginning of the Hellenic Cadastre Project and has gone through various phases and changes. The development of the Hellenic Cadastre started in 1994 when the Greek Government incorporated it into the 2 nd Community Support Framework (Delors Package II). The development of such a system was advocated by the fact that the existing deeds registration system, called The Registry and Mortgages System, has certain deficiencies that do not allow for efficient and effective land management. Indeed, the existing system does not guarantee ownership rights on land, does not facilitate establishment of owners of a particular land parcel, and does not allow for an easy and inexpensive determination of land ownership data. All these deficiencies have resulted in disputes over land ownership, 7 encroachment on public land, reduced utilisation of land, and increased transaction costs. The development of the Hellenic Cadastre relies greatly on close collaboration between public and private sector agencies: the public sector controls the procedures for registration and maintenance of land property rights while the private sector has the means and mechanisms to complete the task efficiently and effectively. In addition, the European Union, the major financial sponsor of the initial phase of the Project, strongly advocates the use of private sector resources in the development of the Hellenic Cadastre. The above legislative, organizational, institutional, and business establishment defines a system within which the Hellenic Cadastre Project must be developed and creates a 7 Many of these disputes have been taken to the courts. 28

32 complex and delicate environment within which the various involved agencies must function. In this paper, we describe this system and analyse both how these agencies operate and how they interact with each other in the development process. This paper is structured into five sections. The first section describes the Hellenic Cadastre including its goals, operational characteristics and development. The second presents the major private and public sector agencies involved in its development and operation. The third describes the domains of collaboration between the public and private sector agencies within the Hellenic Cadastre development process. The fourth discusses the difficulties encountered in the collaboration between the agencies. Finally, the last section presents the conclusions and summarises future prospects. The Hellenic Cadastre The legislative framework The Hellenic Cadastre is governed by two laws: Law 2308/95, which specifies the procedure by which the cadastral data are collected and validated (Hellenic Republic, 1995a), and Law 2664/98, which specifies the operation of the cadastre (Hellenic Republic, 1998). Both laws have been formulated and enacted following the decision of the Greek government to incorporate the development of the cadastre into the 2 nd Community Support Framework. The six principles that form the basis of the Hellenic Cadastre (Hellenic Republic, 1998, article 2) are: 1. Cadastral data shall be organized on a parcel basis. This means that each legal land parcel is characterized by a unique identifier and is depicted on the cadastral diagrams. 2. The legality of the requested transactions shall be checked. Each transaction, before being registered in the system, is checked to ensure that its legal prerequisites are met (the submitted titles and the other supporting documents are legally appropriate and sufficient). 3. The chronological order of the transactions to be processed shall be maintained. 4. Public access to the contents of the cadastral books shall be provided. 5. Public trust regarding the cadastral data shall be assured. This means that individuals who make transactions based on the cadastral data are insured against any losses due to data deficiencies or errors. 6. The Cadastre shall be expandable. This means that, in the future, the Hellenic Cadastre may incorporate additional data other than those specified in Law 2664/98. The main rights data that are registered in the cadastral system concern: ownership, usufruct, habitation, mortgage, servitude, seizure, long-term leasing, time-share leasing, leasing, and mining. These rights are created, transferred or terminated through the transactions specified in the same Law 2664/98 (Hellenic Republic, 1998, article 12). 29

33 Data collection and validation procedure Data are collected and validated through a procedure specified in Law 2308/95 (Hellenic Republic, 1995a) and in the technical specifications of the cadastral survey studies (Hellenic Republic, 1995b). The main steps of the procedure are: 1. Select the municipalities to be surveyed in a particular time-period. These municipalities are then grouped into study areas, each of which will be surveyed independently. 2. Contract the cadastral survey work of each study area to contractors who are to carry out the surveys, collect the relevant data, and build the initial database on the land property rights. 3. Make the topographic base map of each area. This map is made using primarily photogrammetric methods. The scale is 1:1000 for urban areas and 1:5000 for rural areas. 4. Make maps that depict the forest areas Delineate the areas specified by legislation as public areas (e.g. seashores and coastal zones). 6. Invite persons who have land property rights in each study area to submit the pertinent declarations. 7. Collect the declarations and the accompanying documents (photocopies of deeds, certificates of deed registrations, topographic diagrams etc) and process them to determine the nature and validity of the rights. 8. Make the preliminary cadastral diagrams depicting the land parcels and the buildings. 9. Make the preliminary cadastral tables describing the declared rights on the land parcels depicted on the preliminary cadastral diagrams. 10. Display the preliminary cadastral diagrams and tables at the cadastral offices and other appropriate locations ( 1 st Display ). In addition, notify declarers by mail about the property rights that have been recorded under their name in the cadastral records and inform them about their right to raise objections in case of disagreement about the data recorded. 11. Collect and examine the objections. The examination is made by 3-member committees, each of which consists of two (2) lawyers and one (1) engineer. 12. Update the preliminary cadastral data according to the recommendations of the Objection Committees. 13. Display the updated cadastral diagrams and tables and notify the persons concerned by mail about the new status of the recorded data ( 2 nd Display ). In addition, inform those persons about their right to submit appeals. 14. Collect and examine the appeals. The appeals are examined by a 2 nd -degree committee consisting of 2 lawyers and 1 engineer who have more experience on Property Law than the corresponding members of the Objection Committees. 8 These maps are made to determine the areas that are (or formerly were) forest areas and, therefore, by default, belong to the State. If individuals or legal persons have rights on such areas they must prove such by submitting titles or other appropriate legal documents. This requirement in the data collection procedure serves not only to discourage potential encroachers from appropriating public land but also to spot all those who have already encroached public land during the past four decades. The maps are made using photogrammetric and photointerpretation methods. The data that are used as input to the photogrammetric procedure consist of two series of aerial photographs: one taken in 1945 and the other taken recently. The latter series is the same as that used to make the topographic base maps. 30

34 15. Update the cadastral data by taking into consideration the recommendations of the Appeal Committees. 16. Record the first registrations in the cadastral books and build the initial state of the cadastral database using the data contained in the updated cadastral diagrams and tables. After recording the first registrations and building the corresponding databases for a particular area, the cadastral system starts operating and the mandates of Law 2664/98 regarding its contents and operations become effective. This system will be computerbased, although the Law specifies that the cadastral data and transactions will also be recorded in the cadastral books. It should be noted that for a period of five years after the recording of the first registrations, the correctness of the first registrations can be challenged in court. 9 After that time period, however, the unchallenged first registrations become permanent, and only in certain circumstances they may be court challenged. 10 Individuals who make transactions based on permanent registrations are assured that the rights resulting from those transactions are guaranteed by the Hellenic State. The procedure for collecting cadastral data lasts approximately 3-4 years from the date in which the data collection contracts (Step 2 above) are signed. Given that there is an additional period of 5-7 years for the first registrations to become permanent, it is deduced that the total period for finalizing the first registrations is approximately 8-11 years. This period is considered to be long enough to bring forward the actual landowners and reduce erroneous individual land allotments. Development of the Hellenic Cadastre The Hellenic Cadastre is developed through a sequence of Cadastral Survey Programs, each of which is launched at a different time point. Each program consists of a group of cadastral survey projects - cadastral studies -, and each study covers on average four municipalities and an area of approximately 100 sq. km. The 1 st Program ( Pilot A Program ) was launched in December 1995 and includes 66 municipalities covering an area of 2,235 sq. km (Table 1). Since then, one more program has been launched and two are under way (Table 1). 9 This period is seven years for out of Greece residents. 10 Article 7, par. 2 of Law 2664/98. 31

35 Table 1: Cadastral Survey Programs. A/A Program No of studies Start year Municipalities 11 Area (sq. Km) 12 Budget (US$ mil) (Nov 1999) Status (November 1999) 1 1 st (Pilot) , Examination of objections (Step 10) 2 2 nd , Preparation of cadastral diagrams and tables (Steps 7 and 8) 3 3 rd , Evaluation of tender offers. Contracts will be signed in th , Preparation for tender Total , Development of the Hellenic Cadastre Project takes place in a geographically dispersed fashion (Figure 1). Specifically, the areas included in the 1 st Program have been strategically selected to provide a representative picture of the size and difficulty of the cadastral survey work involved. The programs that followed included areas that were adjacent to the previously selected core areas and contained major urban centres that experienced increased pressure for development. The selection of areas was conducted in such way that the ratio of allocating funds to urban, rural, and environmentally sensitive areas was preserved 13 and each prefecture 14 had at least one cadastral survey study in progress (a geographically balanced distribution of funds). 11 As of January 1997, Greece had 5,575 municipalities. 12 Greece has an area of approximately 132,000 sq. km. 13 There was a requirement specified by the funding agencies that the allocation of funds be made according to a proportion of to the urban, rural, and environmentally sensitive areas respectively. 14 Prefectures comprise the second-level of the administrative hierarchy in Greece. They rank above the municipality level and below the regional level. Currently, Greece has 51 prefectures, each of which has an average area of approximately 2,500 sq. km and a median population of approximately 105,000 people (Hellenic Statistical Service, 1991). 32

36 Figure 1: Cadastral Survey Areas. 33

37 The time horizon for completing the development of the Hellenic Cadastre is approximately years. However, in the areas that have been included in the program in the early stages, the cadastre would be operational much earlier. The total cost for developing the Hellenic Cadastre is estimated to be in the order of US$ 1 billion. Currently, the funds for the cadastral surveys are drawn from the 2 nd Support Framework of the European Union (75%) and from the Program of Public Investment of the Greek State (25%). In the future, funds for cadastral projects would come from the 3 rd Community Support Framework, the Greek State, the cadastral transaction fees, and the sale of products. It is envisioned that, at later stages of the development, the cadastral system would be able to self-finance its operation. Major private and public sector bodies involved in developing the Hellenic Cadastre The development of the Hellenic Cadastre causes a major disturbance in the way that land administration functions in Greece. In addition, it affects a large number of individuals residing in Greece or abroad and influences a significant number of institutions and associations that have land interests (Table 2). Each step in the development requires caution, alertness, and insight in order to avoid the obstacles raised by the conflicting interests of the affected parties. So far, the Project has progressed without any major setbacks because the most powerful bodies that could affect it (the European Union, the Greek Government, the political parties, and the professional associations) strongly support its development. Table 2: Public and Private Sector Agencies and Organizations Related to the Development of the Hellenic Cadastre. Agency or Organization 15 Role 16 European Union Regional Policy DG (DG XVI) Supervises the Community Support Program Environment which partially funds (75%) the Hellenic Cadastre Project. Greek Government Ministry of Environment Physical Supervises the development of the Hellenic Cadastre. Planning and Public Works Ministry of Justice Supervises the Registry Offices. Ministry of Economics Responsible for the public land. Ministry of Agriculture Responsible for the delineation and protection of forest areas. Ministry of Interior, Public Administration, and Decentralization Responsible for the Public Administration. Ministry of Foreign Affairs Serves the Greek and non-greek owners who live abroad. Ministry of Culture Responsible for the archaeological sites. Public organizations and services 15 In this table, only the main agencies and organizations that are involved directly or indirectly in the development of the Hellenic Cadastre are listed. 16 Most agencies and organizations listed on this table have additional duties and responsibilities that are not mentioned here. 34

38 Hellenic Mapping and Cadastral Organization (HEMCO) Hellenic Cadastral and Mapping Service (HECMS) Organization responsible for the cadastral and mapping activities in Greece (civil branch). Plays primarily a strategic planning and coordinating role. It has the legislative mandate to develop and operate the Hellenic Cadastre. A service under the supervision of the Ministry of Environment Physical Planning and Public Works that provides support (personnel, equipment, know-how) to the Hellenic Mapping and Cadastral Organization in order for the latter to accomplish its mission. Hellenic Military Geographical Service Responsible for the military mapping activities in Greece. Also, responsible for providing permissions for aerial photography. Hydrographic Service of the Hellenic Responsible for mapping, among others, the seashores. Navy Registry offices Responsible for registering the deeds about land rights. Universities (National Technical U. of Athens, Aristotle s U. of Thessalonica) Private sector firms Provide expertise on scientific issues. Ktimatologio S.A. (Hellenic Cadastre) Private sector company, established and supervised by the Ministry of Environment, Physical Planning, and Public Works, which has undertaken the task to develop the Hellenic Cadastre. The Hellenic Cadastre Consult (HCC) A private sector consulting consortium, comprised by an Australian, a Danish, and a Greek firm, that has undertaken the task of assisting in the establishment of Ktimatologio S.A. Design offices Engineering firms (mostly surveying) which, with the cooperation of foresters, lawyers and IT specialists, undertake the task of collecting the cadastral data, maintaining those data during the collection and validation period, and developing the initial state of the cadastral database (Steps 3-15 above). Aerial photography firms Firms carrying out aerial photography tasks on behalf of HEMCO or Ktimatologio S.A. Marketing communications firms Firms supporting Ktimatologio S.A. in designing, developing, and carrying-out public awareness programs about the Hellenic Cadastre. Telephone support firms Firms contracted to assist Ktimatologio S.A. in dealing with questions made by the public. Professional Associations Technical Chamber of Greece (Engineering association) Developed the Proposal about the Hellenic Cadastre. Provided input for the development of the technical specifications and the determination of the initial price list of the cadastral works. Geotechnical Chamber of Greece It includes forestry experts. Contributed to the incorporation of the development of forest maps as part of the cadastral survey works. Lawyers Association Contributed to the development of Law 2664/98. Panhellenic Association of Rural and Surveying Engineers Association of Rural and Surveying Engineers of N. Greece Association of Registrars Contributed primarily to the development of Law 2664/98. Land owners Association The most complex and delicate issues to be resolved included the rivalry between the public and private sector agencies concerning the role that each would play in the development and operation of the cadastre. The public sector, on the one hand, had the constitutional and legislative mandate to deal with land administration issues but, according to some parties involved in the decision-making process, lacked the means and mechanisms to carry-out the Project timely, efficiently, and effectively. The private sector, on the other hand, and particularly the surveying engineering industry, was pressing hard for a fast move forward, particularly in view of the availability of funds 35

39 which had been allocated to the Hellenic Cadastre Project by the European Union and the Greek Government, and which remained unutilized. However, the Greek legislation mandates that the protection of land property rights is the responsibility of the State and cannot be delegated to the private sector. The strategy adopted for proceeding with the relevant responsibilities involved the following major decisions/actions: 1. The Hellenic Mapping and Cadastral Organization (HEMCO), which is a public sector organization under the supervision of the Minister of Environment, Physical Planning and Public Works and which is supported by the Hellenic Cadastral and Mapping Service (HECMS) (Table 2), 17 was given the jurisdiction to develop and operate the cadastre The cadastral offices would be supervised by HEMCO. 19 Once such a cadastral office is established in an area, there will be a transfer of functions from the corresponding registry office to the cadastral office. 20 At present, the registry offices are under the supervision of the Ministry of Justice while the cadastral offices are under the supervision of the Ministry of Environment, Physical Planning and Public Works. The establishment of a new cadastral office in an area would thus result, among other things, in a transfer of functions and jurisdictions from one ministry to another. 3. The Ministry of Environment, Physical Planning and Public Works established a new company, called Ktimatologio S.A. 21 in order to plan and carry out, in close cooperation with HEMCO, the development of the Hellenic Cadastre. 22 This company is solely owned by the Greek State, is supervised by the Minister of Environment, Physical Planning and Public Works, and operates according to the rules and regulations that apply to private sector companies. In this manner it was considered that the effectiveness and flexibility that characterize private sector companies would be realized in the development of the Hellenic Cadastre without violation of the existing legislation. To ensure that there would be an open channel of communication between HEMCO and Ktimatologio, certain members of the Board of Directors of Ktimatologio also serve on the Board of Directors of HEMCO. 4. Ktimatologio has hired the Hellenic Cadastre Consult S.A. (HCC) to get managerial assistance in planning and carrying out the Hellenic Cadastre Project (Table 2). HCC is a joint venture between an Australian company that specializes in land administration, a Danish company that specializes in project management, and a 17 HEMCO has a small staff (approximately 17 persons including the 7-member Board of Directors). Mainly, it relies on the Hellenic Cadastral and Mapping Service (approximately 100 employees) and the private sector to carry out its mission. 18 Laws 2308/95 and 2664/ Law 2664/98, Article 3, p Law 2664/98, Article 23, p In Greek, Ktimatologio means cadastre. 22 Decision no 81706/6085/ of the Ministers of Economics, Finance, and Environment, Physical Planning and Public Works, published in the issue 872B/ of the Government Gazette. 36

40 Greek company that specializes in project management consulting. So far, HCC has assisted in: developing the organizational chart of Ktimatologio; preparing the plan for incorporating new areas in the cadastral program; estimating the total cost of the project; refining the technical specifications; specifying the strategy for developing the Information Technology (IT) system of the Hellenic Cadastre; supervising the ongoing cadastral survey studies; developing a plan for establishing cadastral offices; and establishing quality control and quality assurance procedures in Ktimatologio. The above tasks are carried out by HCC personnel, employed in certain key positions in the Ktimatologio organizational chart (Figure 2). Such positions include the Project Director, who reports to the General Manager, and the directors of the Departments of Planning and Programming, Contract Supervision, and Information Technology. 5. Ktimatologio carries out tasks that are related to planning, designing, and project supervision and outsources tasks that require work at a production rate (e.g., collection of cadastral data, aerial photography, and public promotion). The outsourcing of projects to private sector companies is made in accordance to EU directives. 23 So far, 93 cadastral survey contracts, covering a total area of 8,439 sq. km and with a total budget of approximately US$100 million (Table 1), have been contracted to private sector companies. The supervision of these contracts constitutes the dominant activity of Ktimatologio. Other programs are still at a planning and tendering stage (Table 1). Interrelationships between private and public sector agencies The major public and private sector agencies that are involved in the development of the Hellenic Cadastre (Table 2) are interrelated in a complex, multi-facet, and often bidirectional manner (Figure 2). Generally, EU and the Greek government specify the policies, the framework, and the budgets necessary for development of the Project. Ktimatologio, in cooperation with HEMCO and HECMS, provides the planning and supervision of the tasks to be carried out. The private sector companies (engineering, aerial photography, information technology, and marketing communications) perform the tasks contracted to them by Ktimatologio or HEMCO 24. Finally, the associations provide input on technical matters or endeavour to promote the interests of their members. All these roles are discussed in greater detail in the following sections. 23 Mainly, we refer to Directive 92/50/EU, as modified by Directive 97/52/EU. These two directives deal with the procedures to be followed by public sector agencies in entering into contracts for services. 24 HEMCO has outsourced and is supervising the cadastral survey studies of the 1 st Program. 37

41 Figure 2 - Functional Relationships between Public and Private Sector Agencies involved in the Development of the Hellenic Cadastre. Development of the legislative infrastructure One of the first challenges faced by the Hellenic Cadastre Project after its incorporation into the 2 nd Support Framework was the lack of a legislative framework to enable its development and operation. Given that the time constraints imposed by the EU for rapid 38

42 progress were tight, it was decided that the development of the legislative infrastructure should take place in two stages. In the first stage, the procedure for collecting and establishing the validity of the initial cadastral data (up to the first registrations ) would be determined (Law 2308/95). The second stage would specify the operation of the cadastre (Law 2664/98). The agency that played the leading role in carrying out this task was HEMCO, supported by law experts specializing in Civil Law and Constitutional Law. In this process, the public sector (HEMCO, Registry Offices, Universities) carried out most of the work required for development of the legislative framework while the private sector provided input mainly through its professional associations (Technical Chamber, Geotechnical Chamber, Lawyers Association, Association of Registrars). (See Table 2 and Figure 2.) The draft laws, after their preparation, were forwarded to the Parliament for refinement and approval. Eventually, they were passed in 1995 and 1998 respectively. The latter, in particular, won overwhelming support by almost all political parties in Greece, something unusual for political events in the country. Collaboration in developing technical specifications and setting prices for cadastral surveys This domain of collaboration between public and private sectors involves the development of technical specifications, the solution of technical problems, and the establishment of prices for the cadastral survey works. As far as technical specifications are concerned, the initiative and responsibility for their development belonged to HEMCO. Indeed, in the early stages of the Hellenic Cadastre Project, HEMCO formed a committee consisting of cadastral experts to develop the specifications. These specifications were forwarded to the Minister of Environment, Physical Planning and Public Works for approval. 25 Approximately 70% of the committee members came from the private sector (mainly surveying engineering) and 30% from HEMCO. Three senior university professors specialized in Surveying Engineering served as consultants to the committee which also received input from a number of public agencies and associations interested in the subject (HEMCO, 1994). Since then, the specifications have been refined to incorporate technical details and have been expanded to cover other topics which had not formed part of the initial version (e.g., aerial photography). Most input, however, came through the involvement of the new personnel employed by Ktimatologio, including HCC personnel, and through feedback from the contractors who had been involved in the cadastral surveys of the 1 st Program. This procedure of continuous upgrading and improvement of the technical specifications through the collaboration of the involved agencies (public and private) is most likely to continue in the future. The prices for performing cadastral survey works for the 1 st Program and for certain studies of the 2 nd Program were established through negotiations between HEMCO/Ktimatologio and the correspondent professional associations. For these studies, the decision about prices (as approved by the Minister of Environment, Physical Planning and Public Works) accompanied the technical specifications given to the contractors of 25 Ministerial Decision No 71154/4228/ published in the Government Gazette No 639B/

43 cadastral survey works. For the remaining studies, however, the prices were determined through the bidding process of the open international tenders used to contract out the works. Development of Ktimatologio organizational infrastructure To develop its organizational infrastructure Ktimatologio used expertise and resources from both the private and public sectors. It hired the HCC to get assistance in developing its organizational structure, setting-up its operations as a private sector company, and defining the tasks that should be performed within the scope of its obligations. The intention was that HCC would provide the initial personnel until the company hired and trained its own staff. In addition, HCC would provide know-how about how such a company is managed efficiently and how a modern cadastral system is built and maintained. In this manner, international experience and well-established management practices would be transferred and incorporated into the newly established company. The agreement between the two agencies was signed in February 1997 and will expire in March Ktimatologio received support in establishing its infrastructure and in implementing its operations also from the public sector. HEMCO and HECMS personnel have been cooperating closely with Ktimatologio staff in the supervision of the cadastral survey studies of the 2 nd Program. Additional personnel from HEMCO and HECMS were transferred to Ktimatologio for the same purpose. It must be noted that the HEMCO and HECMS personnel have had more experience than the newly recruited Ktimatologio personnel in supervising cadastral survey studies, because the former had been involved in the supervision of the 1 st Program. Data collection process Currently the greater part of the collaboration between Ktimatologio/HEMCO and the private sector companies lies in the area of data collection. Indeed, the magnitude of the Hellenic Cadastral Project is such as to cause a major change in the Greek surveying engineering industry and have an impact also on other related disciplines (e.g. legal profession and forestry industry). Initially (1994), surveying engineers represented the major professional group that strived for the commencement of cadastral survey studies and were keen to undertake the majority of the involved work. The related professions seemed unprepared, hesitant or even reluctant to get involved in these studies. The multidisciplinary nature of the cadastre, however, involved the necessity of collaboration among various professions which in the past had been segregated. Gradually, however, this attitude has changed. A significant role in this respect was played by the Ktimatologio policy of continuous encouragement for its collaborators to use legal, forestry, IT, and quality control expertise. In its last call for bids (3 rd Program), in particular, Ktimatologio required the candidates to form joint ventures between surveying engineering companies and forestry companies and, in addition, to secure cooperation with law and IT experts (Figure 2). All these efforts are made to ensure cohesion within 26 It is noted that the agreement between Ktimatologio S.A. and HCC has an option for a two-year renewal after expiration of the first term. 40

44 the joint ventures undertaking cadastral survey works and synergistic use of the expertise of the members of each venture. Also noticeable is the interest of non-greek companies applying for participation in the program (Table 3). So far, a significant number of foreign applicants, mainly from EU countries, has succeeded in winning contracts either individually or in collaboration with Greek companies. This, despite the adversities faced by these companies due to differences in language and the idiosyncratic nature of the projects. Table 3: Number of Applicant Companies in the 3 rd Program by Specialty & Ethnicity. 27 Specialty Ethnicity Total Greek Foreign Engineering (Surveying) Lawyers or law companies Forestry Information technology Other (mostly quality control) Total Another type of collaboration between the public and private sector agencies is represented by the support that private sector contractors provide to HEMCO in carrying out certain tasks, prescribed by Law, during the data collection and validation period, that is, during the period between the signing of the contracts and the recording of the first registrations. Specifically, Law 2308/95 mandates that, after collection of the declarations, 28 any change in land parcel legal rights be registered in the cadastre before its being registered in the registry system. This is implemented by requesting people who make land transactions to attach to the documents submitted for registration to the registry office a certificate issued by the pertinent cadastral office. If cadastral offices have not yet been established in the areas being surveyed and the private sector contractors are still in possession of the collected data, HEMCO has arranged that the contractors check the data and determine whether the pertinent property has been properly declared. HEMCO then issues the required certificate. In this manner, the cadastral system is kept updated and matches the registrations of the Registry System. A third area of collaboration between the private and public sectors concerns the accumulation and conformity of know-how about cadastral issues. Specifically, private sector contractors who are involved in the data collection process are encouraged to record the problems faced during the process and report them to Ktimatologio along with recommendations. The Ktimatologio staff collects this information, combines it with information obtained from other sources, prepares the answers that best suit each case, 27 There were 37 candidates for the 12 cadastral survey studies of this program. 28 Step 7 of the section: The data collection and validation procedure above. 41

45 and issues guidelines on how each problem should be handled by Ktimatologio collaborators. This allows expertise from a large number of professionals to be centrally pooled, synthesized, and used for the benefit of the entire Project. Such procedure is beneficial particularly in the initial stages of the Project because of the large variety of problems encountered in the field and the still unclear responses. A last area of collaboration between the public and private sector agencies is to be found in the support provided by Ktimatologio to the registry offices in order that they can handle the increased demand for services in the areas where the cadastral survey studies take place. Indeed, in these areas it often occurs that people request certificates to document their declared property rights but the registry offices do not have sufficient personnel to cope with the amount of demand. In such cases, Ktimatologio provides funds to the registry offices so that these hire additional temporary personnel (mostly junior lawyers) to carry out their mission. Public awareness programs The success of cadastral survey projects depends heavily on the responsiveness and participation of the public (e.g., submission of declarations, objections, appeals etc). 29 Since the time periods for collecting declarations, objections and appeals are not known in advance, and since these periods differ from program to program, Ktimatologio must engage in a continuous, lengthy and comprehensive public awareness program to inform all people who have rights on land about the progress of the Project and the action they should take. To accomplish this mission, Ktimatologio has cooperated with private sector companies specializing in marketing communications campaigns. So far, Ktimatologio has launched two campaigns that involved the use of a wide variety of media (TV, radio, and press) and covered a wide range of geographical scales (local, national, and international). It is anticipated that this effort will continue in the future and additional campaigns will be launched. Research programs For certain highly specialized issues for which there are no pre-established answers, Ktimatologio and HEMCO have resorted to academic institutions for assistance. For example, they have outsourced a research project to the National Technical University of Athens to determine an appropriate spatial data transfer standard that may be used for the exchange of spatial data among agencies in the country. The development of such a standard would greatly facilitate not only the exchange of data between Ktimatologio and its collaborators but also the diffusion of spatial data within the government and business sectors. Difficulties encountered in the collaboration between the private and public sectors Notwithstanding the fact that the collaboration between the public and private sector agencies in the development of the Hellenic Cadastre has been very strong and synergistic, difficulties exist that hinder closer collaboration and the progress of the Project. 29 Steps 6, 10, and 13 of The data collection and validation procedure section, above. 42

46 Legislative and institutional issues The development of the necessary legislative infrastructure of the Hellenic Cadastre has been a lengthy and burdensome procedure. Specifically, it took approximately two years for the approval of the first cadastral law (Law 2308/95) and three more years for the approval of the second law (Law 2664/98). During this time the various involved parties (political parties, governmental organizations, professional associations, and social interest groups) had to go through extensive debates to overcome the major objections and reach an agreement at least at a general level. The authorities that were responsible for developing the legislation used extreme caution to maintain the delicate balance of power among the various competing stakeholders and gain the necessary support for passing the laws in the Parliament. Another difficulty in the collaboration between the public and private sectors is to be found in the inability of HEMCO and Ktimatologio to perform certain tasks efficiently because the supervising authorities (EU, Greek Government) require them to follow long and multi-staged procedures to ensure that the public funds are properly used. These procedures cause delays in the progress of the program and friction among the involved private and public sector agencies. An indicative example of this kind of problem is the long time that elapsed before Ktimatologio could hire its first scientific personnel. Indeed, in this case, the management of Ktimatologio and its supervising authorities had agreed to hire such personnel following completion of the organizational study of the company. This task, which involved the specification of the organizational chart, the job descriptions, and the hiring procedure, was to be done by HCC, which, according to the EU directives, had to be selected through an open international tender. This selection process took almost a year. It took HCC a further period of several months to get acquainted with the status and situation of the Hellenic Cadastre and to carry out the study. Thus, it comes as no surprise that it took Ktimatologio almost three years since its establishment to hire its first professional staff. During all this time the company was operating using HCC personnel and a small staff it was obliged to hire to cover the most urgent needs. The lack of sufficient personnel forced Ktimatologio to slow down the pace of the program and delay certain tasks planned for completion by year Conflicting interests between the involved private and public sector agencies The public and private sector agencies involved in the development of the Hellenic Cadastre have conflicting interests and, therefore, it is expected that contentions and rivalries among them would, in certain circumstances, inhibit collaboration. Most indicative in this regard is the case concerning the selection of contractors. The selection is conducted through open international tenders in accordance with EU directives. Indeed, right from the beginning, tender participants have been very competitive and aggressive in their effort to establish themselves as major players in the Hellenic Cadastre Project. This hunger for better placement has led them to strive, through appeals, lawsuits, and complaints, to gain every potential advantage possible over their competitors during the course of the multi-staged tender evaluation procedures. HEMCO and Ktimatologio on the other hand, focus their efforts on minimizing the risk of possible Project setbacks due to potential court or EU mandates that would freeze the progress of certain programs until 43

47 the raised complaints are investigated and resolved. The consequence of this situation is that there is a mutual mistrust among the involved parties regarding tender evaluations and a situation of continuous alertness. In addition, these parties devote a significant amount of resources (personnel, time, and effort) to combat their opponents and protect their interests. These facts contribute to weaken the collaboration between public and private sectors and cause delays in implementation of the Hellenic Cadastre Project. Inexperience of the private sector to deal with large scale cadastral survey projects Before the initiation of the Hellenic Cadastre Project, the Greek surveying engineering and forestry industries had been involved in relatively small-scale projects and consequently had adapted their structure and operations to handle the needs of such projects. Most of these companies had a relatively simple corporate structure and employed a limited number of scientific personnel. However, cadastral survey studies are at least an order of magnitude greater than the projects such companies normally undertook and, therefore, there was a need for them to restructure rapidly and adapt to the new situation. This industrial change, combined with the novelty of the task 30 and the lack of well-established procedures for interaction between the contractors and the supervising authorities during the course of a project, has created difficulties in the collaboration between the involved public and private sector agencies. Cultural difficulties Cultural difficulties are faced primarily by foreign companies which participate (or wish to participate) in the Hellenic Cadastre Project. These difficulties are mainly due to differences in language, lack of knowledge about local land administration matters, and differences in the way companies operate in Greece. The result of such differences is that foreign firms frequently fail to satisfy tender requirements or, when they are awarded contracts, go through extensive adjustments and learning phases in order to fulfil their contractual obligations. Conclusions Development of the Hellenic Cadastre is achieved relying on close collaboration between the private and public sectors. Examples of this collaboration include: (1) development of the Hellenic Cadastre regulatory legislative infrastructure; (2) establishment of the necessary organizational infrastructure of the system, and collection and validation of the initial cadastral registrations. Obviously, the form of collaboration, as existent today, has required a great deal of effort to be built and has gone through various stages of development. The uncertainty that existed at the beginning of the Project, when there was no clear vision about how the cadastre should be built and how it should operate, has been reduced considerably. An important contribution to this development has come from the executive management of the Hellenic Cadastral Project which, through a sequence of cautious steps, has been able to overcome the obstacles encountered, build consensus among the major interested parties (political and others), secure a strong support for the Project at various policy-making forums, keep the Project on track, and avoid major setbacks. The future will show whether this momentum that has been built during the past 30 No cadastral studies with the given specifications had been carried out in Greece before. 44

48 five years will be maintained. Indeed, the experiences acquired in the past would provide a useful background for future decisions and actions. Acknowledgements I would like to thank Dr. D.K. Rokos for his comments on this paper and Ms. Maria Maragkou of the IT Department of Ktimatologio S.A. for her assistance in making the maps included in this paper. Disclaimer The views expressed in this paper are personal and do not necessarily represent the official views of Ktimatologio S.A. or any other associated organization. References Hellenic Republic, 1995a, Law Cadastral surveys for the development of the National Cadastre. Procedure up to the first registrations in the cadastral books and other regulations Government Gazette, Issue 114A/, pp (in Greek). Hellenic Republic, 1995b, Approval of the technical specifications, the content of cadastral diagrams and tables, and the pricing of cadastral survey works up to the first registrations in the cadastral books (Decision of the Minister of Environment, Physical Planning and Public Works No 71154/4228/ ) Government Gazette, Issue 639B/ , pp (in Greek). Hellenic Republic, 1998, Law The National Cadastre and other regulations Government Gazette, Issue 275A/ , pp (in Greek). HEMCO, 1994, National Cadastre: Technical Specifications (Version approved by the Board on May 1994), Hellenic Mapping and Cadastral Organization, Tim. Vassou 11-13, Athens, Greece. 45

49 4.4 Cadastre and land administration in Romania Catalina Nicolae Cadastral activities in Romania comprise the following stages: : Introduction of the general cadastre in: Transilvania, Banat and Bucovina (1794); Muntenia (1831); Moldova (1832) : foundation of the Ministry of Agriculture Cadastral Department (1919); agrarian land reform (post-first World War); establishment of the General Cadastre and the Land Books (Law no. 23 of 1933) : activation of modern Cadastre; activity interrupted during and after the the Second World War period due to the opposition of the communist regime : use of different types of land registration (land records, cadastre) especially regarding the assets of the old agricultural associations and agricultural state enterprises : mobilization of the cadastral units personnel in the implementation of the Land Law. 1996: entering into force of Law no. 7/1996 on cadastre and real estate publicity. The law provided the legal framework for organizing and operating a modern general cadastre. According to the definition given by the law: The general cadastre is the unitary and compulsory system of technical, economic and legal records by which are achieved the identification, registration and representation on cadastral maps and plans of all lands as well as of other immovables in the whole territory of the country, regardless of purpose and owner. The basic entities of this system are the plot (parcel), the construction and the owner. By "real estate in the sense of the law, is meant the plot of land, with or without buildings. The law on Cadastre and Real Estate Publicity has established the organisation of the land registration system and the NOCGC, IGPCC and COCGC funding. According to the law, the activities in the field of geodesy, cartography and cadastre are organised, led, guided and controlled by the National Office of Cadastre, Geodesy and Cartography (NOCGC). This agency was founded in November 1996 as a public institution, with legal personality, subordinated to the Government of Romania. The NOCGC is under the general direction of the Prime Minister s Office. Under the subordination of the NOCGC is the Institute of Geodesy, Photogrammetry, Cartography & Cadastre (IGPCC) and the County Offices of Cadastre, Geodesy & Cartography (COCGQ) which are public institutions, also with legal personality. At present, in Romania, there are 42 county offices. The ministries, other central State institutions, self-managed public companies and other legal persons organise specialised cadastres in the domains of agriculture, forestry, waters, industry, extraction industry, real estate and urban areas, road, railway, naval, air tourism, built-up and natural protection zones (subject to high risk of natural calamities or pollution and degradation.) 46

50 From the technical and economic point of view the specialised cadastres are systematic inventory and record subsystems of real property, with observance of the technical norms elaborated by NOCGC, and of the basic general cadastral data regarding area, utilisation class, and owner. Depending on the specific field of activity, the cadastral authority shall carry out the relevant required geodetic, topographic, photogrammetric, cartographic, and other works. At the State level, the three functions (technical, juridical and economic) of the cadastral system are performed by the NOCGC, the Ministry of Justice and the Ministry of Finance; at the regional level they are performed by the COCGC, the Land Book Offices (LBO) and the Public Finance Boards. The technical functions of the general cadastre are the responsibility of the NOCGC and consist in determining, through surveys, the position, form and size of every parcel, the categories of use, and the owners. In the framework of the application of the Cadastre and Real Estate Publicity Law, the NOCGC has separate responsibilities concerning cadastral land registration. It sends to the territorial LBO (Land Book Offices) the following information: (a) parcel number, (b) name, address and identification code of the owner or holder, (c) attributes by parcel (surface area, category of use, etc.). The Ministry of Justice organises, coordinates, and controls the publicity activity of the land book offices of the courts by a specialised department. The activity of the National Office of Cadastre, Geodesy and Cartography, of the institutions in its subordination, and of the specialised cadastre of ministries and other central State institutions shall be funded from the State budget and through outsourcing. The specialised cadastres of self-managed public companies, trading companies, and other legal persons shall be self-financed. During the period topographic base plans were prepared for over 90% of the area of Romania. To meet the present-day requirements of the General Cadastre it is necessary to carry out the following activities: execution and updating of cadastral plans at large scales (1:500; 1:1000; 1:2000) relative to the local inner zones (approximately 10,000 sq. km); execution and updating of cadastral plans at 1:2,000 and 1:5,000 scale relative to local outer zones and the zones covered by the current land reform (approximately 100,000 sq. km); scanning and vectoring of the existent topographic plans and maps, over an area of approximately 150,000 sq. km.; use of GIS technology for General Cadastre application and establishment of cadastral data banks, with suitable equipment; experimentation and introduction of modem technological processes. 47

51 Modernisation of the cadastre and land registration system aims to achieve the following objectives: Protect real property and secure its possession Support the real property taxation system Insure security of credits Develop and monitor the land market Protect the state real property Reduce disputes on land matters Facilitate the land reform on agriculture Improve urban planning and development of urban infrastructures Protect the environment Provide statistical data The principal technical documents of the General Cadastre to be drawn up at commune, town and municipality level shall include: cadastral land plot register alphabetic index of owners and their domicile cadastral register of owners property bodies register centralised record cards of cadastral parcels by owner and by category of use cadastral plan The database may also be drafted and filed in the form of records on supports accessible to automatic data processing equipment, with an equivalent juridical effect. After finalising the works on the spot, the data obtained for each territorial/administrative unit shall be processed, recorded in the technical documents of the cadastre and introduced into the cadastral database. The contents of the cadastral maps shall include: geodetic base boundaries communications network (electric, telephone lines, roads, railways, etc.) hydrography and hydrotechnical buildings technical installations postal numbers inscriptions localities, etc. Until 1 July 1999 two land registration systems existed regarding the legal situation of all owners, lots and buildings: for the central and eastern parts of the country, the old system of Land Books (in operation for nearly 2 centuries), based on property records; each lot and building was provided with a cadastral number and a Land Book number. In the rest 48

52 of the country land registration came under the Civil Code system, which is based on people (owner records) and thus is less efficient compared with the Land Book system. The new system established by the Cadastre and Real Estate Publicity Law was implemented after 1 July This system is quite similar to the Land Book system under Decree no. 115/1938, but with certain differences and improvements. The new system will be introduced progressively throughout the country. Law no.7 of 1996 on Cadastre and Real Property Registers establishes a unique system at the national level based on the Land Book registration. The system should cover the following three parts: (I) registration of all land parcels and buildings, (II) registration of owners of land and buildings, (III) registration of limitations on land parcels and buildings. The registration is contained in the Land Book registers which are maintained by the Land Book Offices of the Local Courts. In each district there are about 5 Land Book Offices, each responsible for the Land Book registers of a well-defined administrative area, covering a number of administrative territories (communes, towns and municipalities). The activity in the Land Book Offices comes under the overall coordination of the Ministry of Justice. According to the Notary Law all deeds concerning the conveyance of land property rights are to be legalised by a notary public. All notarial deeds on conveyance of property rights and all court decisions concerning land and owners are thus registered by the Land Book Office. The Land Book Office will extract requested information from the registers in order to inform clients and notaries. The District Cadastre Office registers all changes on parcel boundaries. According to Art. 44 of the Regulations on the organisation and operation of the Land Book Offices, registration in the Land Books can be of three types: a) tabulation of real estate ownership rights, other principal real estate rights and real estate accessory rights; b) temporary registration of said rights, subject to subsequent justification; c) registration of other legal relationships, personal rights, legal actions, and measures on inalienability related to Land Book real estate items. The registration process consists of the following steps: 1. The application for registration is addressed to the Land Book Office by the interested party or by a notary public having a power of attorney; 2. The Land Book Judge checks the deeds, the effected payment of the judicial taxes, and issues a decision; 3. If the application is accepted, the Land Book officer identifies the real property topographic number, checks if the content of the deed corresponds to the content of the Land Book, makes the respective Land Book registration, and files the Land Book; 4. The applicant is informed by mail of the conclusion. 49

53 According to art. 52 of Law no. 7/1996, "the deadline to complete a registration is stated to be 20 days from the date of application and cannot exceed 60 days from the application date. Notwithstanding this provision longer waiting periods for registration may occur. Other registries include agricultural registers; after 1991, new regulations were passed for their restructuring although agricultural registries were functional even previously. These documents are kept by the town hall of each administrative district and are a medium for depicting the unitary situation of individual family assets (land lots, crops, livestock, buildings and appurtenances, means of transport, agricultural machines etc.). The situation is updated annually by the town hall in conjunction with the Ministry of Agriculture and Food and with institutions in charge of statistical matters and also with the Ministry of Environment and the Ministry of Finance. These registries are official records and an important source of information for state bodies. No IT system is available for data collection and processing, and this creates a number of difficulties. Some private companies developed a LIS for small areas, especially in the cities. But at the national level LIS activities are still at a preliminary stage. The newly established agency - the National Office of Cadastre, Geodesy and Cartography - will have the following duties and powers: a) organise, manage, direct and control the execution of geodetic, topographic, photogrammetric, remote sensing, cadastral and cartographic works at national level. b) develop norms, promote specialised techniques, procedures and methodology in line with the technical and scientific developments in the cadastral domain. c) issue licenses to natural and juridical persons capable of carrying out technical cadastral works. d) organise the national geodetic and cartographic fund as well as the data bank of the unitary cadastral system. e) ensure the execution, completion, modernisation and maintenance in usable conditions of the national geodetic network, under the terms of law and in cooperation with the Ministry of National Defence. f) advise concerning the topographic content of maps, plans, atlases, guidelines and the other cartographic documents necessary for public use. g) make available to public authorities and other interested institutions, as per law, synthetic statistical statements concerning land and constructions. h) carry out the pertinent activities resulting from international commitments. Restitution and privatization After 1989, as part of the process of transition to a market economy, Romania has established a new legal framework for land administration. New laws were adopted to regulate the property rights on land and buildings and to support the land market, namely: Land Law no.18 of 1991, the so-called Restitution Law, disciplines the creation of property rights on the land of former co-operative farms 50

54 Law no. 112 of 1996 deals with the restitution of privately owned dwellings taken over by the state during the communist period Law no. 54 of 1998 focuses on the legal land market Law no. 213 of 1998 addresses public property and its legal status. Land restitution status in April 1999 The total area involved in the land restitution process is about 9.4 million ha. This is 39% of the total area of Romania (23.8 million ha). By April 1999 about 7.7 million ha had been restituted to eligible persons. There are about 4.3 million claimants regarding land, (i.e., 41% of the total rural population). About 3.3 million claimants have already received their Property Title, i.e. the certificates that confirm the transfer of land into private ownership. The rights created by this process are real property rights. The owner enjoys all the rights under the provisions of the public security legislation. Under Law no. 18 of 1991 a maximum of 10 ha of arable land and 1 ha of forest land per family are restituted to the former owners or to their heirs. Law no. 169 of 1997 complements Law no. 18 of 1991, concerning restitution of up to 50 ha of arable land and up to 30 ha of forest land per family. In the first phase, requests of the owners were centralised. In the second phase the land reserve to comply with the requests was established. Subsequently, restitution was initiated for those areas. The above laws were enacted to organise an effective system of restitution and development of a land market. However, the application of these laws turned out to be long and difficult because of different problems such as: The applicants for reconstitution of property rights could not present documentary evidence of such rights because the required documents had disappeared. According to the law such persons could appeal to the competent County Commission. If the appeal was rejected the applicants could make a court appeal. The owners failed to apply for reconstitution of their property rights within the prescribed deadline. In many cases original plots could not be returned because in the meantime they had been converted into non-agricultural use. The resulting allocation has led to thousands of court cases. After the land restitution process, properties of the large state cooperatives disappeared. The large agricultural holdings were divided into small land lots ( ha). Such land lots are too small for efficient land utilisation. Implementation of the Land Law requires the following: establishment of local commissions in the municipalities; 51

55 establishment of district commissions to validate the decisions of the local commissions and to solve the appeals made by the owners; completion of parcelisation by the cadastral specialists of the Agriculture Cadastre Offices or by the contracted surveyors; delivery of the acquired possession minutes, followed by the issue of Property Titles. These processes are confronted with the following constraints: in about 20% of the administrative territorial units there is a lack of cadastral specialists to carry out the surveying; reconstitution and creation of property rights are not performed according to a unified national methodology; difficulty to reconstitute property rights in hill-side areas due to the owners requests to retain former locations; often basic cadastral standards are not applied; when the surface area is not sufficient to cover all the applications for reconstitution of the property rights according to the deeds submitted by the owners, the areas of the plot are reduced according to the land deficit; when owners choose to establish an association, possession is acquired on an association, and not on an individual basis; field measurements for parcelisation are carried out using approximate methods and only exceptionally employing efficient survey equipment. Proposal for improvement of the land restitution process Decentralisation of the processing activities through privatisation of the present Agriculture Cadastre Offices which have teams of surveyors and technicians; Processing of the cadastral works first, followed by the issue of the remainder Property Titles according to Law no. 18. The adoption of these measures will result in a better spending of the budgetary fund and in the avoidance of work duplication by the Agriculture Cadastre Offices and Cadastre, Geodesy and Cartography County Offices. In fact the cadastral activity would be under a unique agency and better related to the Cadastre and Land Registration Project jointly funded by the World Bank and the Romanian Government. The effects of land restitution on ownership The new situation has found the Romanian society unprepared to sustain the impact from the financial and social aspects. A large number of those who received the land are unable to cultivate it. A study conducted by the Institute for Rural Economy and Sociology on 500 communes shows that: 57% of owners are over 65 years of age 43% of these live in the cities 39% are former salaried persons or pensioners of the non-agricultural sector. The land fragmentation has resulted in several social and psychological implications: 52

56 a number of parcels are not cultivated individually; a few owners have agricultural machines and equipment to work the land and most of them request the services of state enterprises; litigations concerning parcel location and soil quality; owners interests, which are multiple and sometimes divergent. The motivation of a young owner whose only income source is farming differs from that of an old owner; migration of the population from urban to rural areas, though the phenomenon is not of the anticipated dimensions; after difficult experiences in individual and independent farming most owners opt for some forms of association. Generally association agreements are fragile, having numerous difficulties: they provide weak security because the agreement can be cancelled at any moment by the land owner; everything is based on mutual trust, but the conditions for rearrangements of social relations are not conducive to such. An alternative type of agreement could be the leasing agreement introduced by leasing law no. 36/1997. This type of agreement has the advantage of providing better guarantees to the farmers, thereby encouraging investments. Land and property taxation In Romania the land and property taxation system is characterised by a large variety of forms and methods aimed at collecting the necessary resources for public budget functions and financing. The traditional forms are mainly taxes and duties, which can be both direct and indirect. Taxes are compulsory and non-reimbursable payments, legally imposed on the income and assets of natural or legal persons. Duties are imposed on persons for different services they have requested and received. Taxes can refer to land, industrial or commercial assets, can be on free professions, property, inheritance and donations, luxury goods, turnover, output and sale, import/export and transit, value added, stamps, registration, etc. The Ministry of Finance is responsible for the general taxation system and for regulating and enforcing taxation conditions and forms of individual public obligations and exemptions. Regarding taxes and duties on property, a distinction is made between taxes on buildings and land lots (Law no. 27/1994 on local taxes and duties) and taxes on agricultural income (Law no. 34/1994 on agricultural income). Agricultural income taxes are to be paid by all those who own arable land and those who have had real estates reconstituted according to Law no. 18/1991 and who have been allotted the land under a provisional certificate or a land possession report, even though they have not been provided with a Property Title. This agricultural income tax has been suspended from 1996 to Land transfers require to be performed through authenticated notarial deeds. The taxes levied by notaries are adjusted according to the value declared by the parties which, however, cannot be inferior to the floating value ascertained through the examination requested by the Public Notaries Chamber. For registration of transactions in case of 53

57 deeds under private signature (i.e. not certified by a public notary), the fees are similarly calculated, but deeds that have been authenticated by a notary are not taxable for registration. As concerns tradesmen, they have to also pay value added tax for their property transactions (land or buildings). According to an Emergency Ordinance issued in 1997, personal income tax is imposed annually on the basis of a statement from the taxpayer or of different elements from fiscal bodies. Usually, taxes on income concerning salaries, pensions, interests, revenues and other similar earnings are withheld at source and those concerning other types of revenues and income are collected through instalments. Succession taxes are imposed on the value of the whole inheritance, including movable and immovable property and excluding proven debts. Assessment and taxation of immovables is a function of the value declared by the parties which, however, cannot be inferior to the examination value. The property market Prior to 1990 no land transactions took place in Romania. Occasionally, land transactions were conducted in non-collective zones. This explains the reason for the present land prices instability. A great difference in prices exists for lands located in a same area. Specialists consider that these differences should not exceed 15-20%, yet today peaks of 100% occur. Land transfer is governed by Law 54/1998 and is characterized by the following elements: a) All privately owned lands are within the civil circuit; b) Conveyance of the land rights through juridical deeds between natural persons is to be in an authenticated form but administrative authentication is no longer necessary; c) Foreign citizens cannot obtain or hold property rights on any type of land; d) Pre-emption rights can be established regarding conveyance of land for agricultural use outside the city but only if the conveyance is made by sale. According to article 2 of the law on juridical movement of land, in case of transfer of land between natural persons, agricultural land use property per family cannot exceed 200 ha.. Private sector entities The private sector capacity in the mapping, cadastral surveying, data collection and information system development program is limited, but the sector has the capacity to grow and maintain itself if a secure source of contracts can be ensured for a few years. The public sector capacity to implement the whole program does not exist and would be difficult to create given the working conditions of the public sector. Thus, the private sector will be utilised on a steadily expanding basis to provide the services necessary for the bulk of the program. 54

58 Activities take place in the public and private sectors. Surveying can be carried out by both the public sector and by licensed private firms and individuals. Public sector services are provided through Land Book offices. NOCGC is in charge of licensing private entities for certain activities: Participation in tenders Assigning contracts and co-operation acts Providing advisory services Execution of field works and surveying Drawing up technical documentation Cadastre, geodetic and mapping work validation Many private companies carry out services for public institutions especially for boundary settlements, the Land Law implementation, soil quality assessment, etc. Public notaries are governed by Law 36/1995 on public notaries and their activity. The Ministry of Justice is responsible for authorising technical experts, who are asked to provide their services in case of property litigation in courts. In 1998, the NOCGC began to organise the execution of the general cadastral works for a few territorial-administrative units in every county, with funding coming from the State budget. Because limited funds allocated from the State budget restricted activities, cadastral work started with the delimitation and marking of the administrative boundaries of communes, towns, and municipalities, as well as the limits of the urban area. The intention is to create a network of administrative boundary points which will be given in absolute coordinates in the EUREF/WGS 84 coordinate system, using transformed existing data or, if not available, the data obtained by GPS. An estimated 1.5 million boundary points, which will be stored in a new database, are concerned. Besides financing from the budget, COCGC obtains 70% of the amount received from fees paid by customers. These fees can be used for material expenditures including new investments. In the first three-month period of 1999 the COCGC obtained almost 1.05 billion ROL (about US$ 70,000). Cost recovery for cadastral implementation could be made through privatising services that are self-financed. This will constitute another income source at state budget level. At present the NOCGC is working on the General Cadastre and Real Estate Publicity project together with the World Bank and in collaboration with the Ministry of Justice. This project is for US$25 million and extends over a period of 6 years ( ). The funds are intended for the systematic introduction of the General Cadastre in 8 counties and sporadically in other 18 counties. It also involves procurement of equipment, carrying out of works and preparation of the methodology and procedures necessary to extend the work throughout the country. There is also a project for the Urban Real Estate Cadastre", prepared by the Ministry of Public Works and promoted by the Department for European Integration since This project concerns two pilot towns (Síghisoara in Mures county and Odorheiul Secuiesc in Harghita county) and started in the spring of this year, after 55

59 approval by the German Government. It is important to emphasise the fact that these two projects do not overlap. They have in view the establishment of certain types of approach and the execution of works to support the creation of the record system of the General Cadastre and Urban Real Estate Speciality Cadastre to facilitate the modernisation of the cadastral system in Romania. Agricultural policy and good governance Agriculture has an important role in Romania. Farmers produce about 20% of the Gross Domestic Product this is about double the average of other central and east European countries. Table 1: The agricultural land situation after privatisation (in ha) Agricultural Total Public domain Commercial society Individual Area Commune Others S.C.ASC* Others Owners Arable land 9,338, , ,355 1,071,892 63,433 7,825,497 Total 14,791,333 2,282, ,031 1,393,135 78,574 10,709,433 S.C.ASC - The old agricultural enterprises turned into commercial companies with shareholders. Implementation of the land law was initiated for some 9.3 million ha of the 10,709,433 ha under individual ownership. The remainder, generally situated in mountain areas, had not been collectivised. A situation common of all private farms in transition is that the new farmers have a great need for information and advice. An efficient support system to provide information and counselling must take into consideration the specific problems and needs of the different groups of farmers. This year the Ministry of Agriculture and Food founded the National Agency for Agricultural Consultancy. The scope of this agency is to support private farm businesses by providing practical information, counselling and professional training to the farmers. The main elements of the strategy of the National Agency for Agricultural Consultancy are: Focus on services; Participation of the farmers in conceiving the services and consultancy program; Improved trust relationship between farmer and counsellor; Decentralisation of the consultancy activities at the municipal and county level; The recommendations provided to the farms must take into consideration the regional characteristics; Efficiency of the consultancy activity. 56

60 4.5 Land consolidation practices in Turkey Hasan Dursun Introduction According to studies, the arable land in the world accounts for only 10% of the total land surface. Mismanaged land results in deserts and other environmental problems, affecting millions of hectares yearly. Land conservation and land reclamation schemes are considered. essential in land use programs. Land consolidation can play an important role for improving rural situations as well as food production. Consolidated fields allow practical management to be undertaken to prevent soil erosion, sustain soil fertility and circulation of irrigation water. Due to the rapid population growth and land mismanagement, land consolidation is necessary to address not only economic and social but also environmental requirements. Positive effects of land consolidation are: Increase in net land utilisation area; Decrease in the number of total land plots, with increase of plot sizes and uniformity of plot shapes; Decrease in the distance between farmhouse and land; Improvement in agricultural practices and decrease in labour requirements; Resultant increased net farmer.income. Agriculture has been developed in relation with other sectors of the economy such as industry and services. Land consolidation has also been developed taking into consideration social and economic conditions. For example, the size of agricultural field lots is determined by the technical level of the machines or tools used and the manpower available. The land consolidation process is a very long and sophisticated interdisciplinary process. Legal gaps in land fragmentation In Turkey the large variety of climatic zones contributes to the diversity in agricultural production. Due to the geographic, climatic, social and economic differences the size of farm holdings varies from region to region. According to surveys 28 million ha of total area are under cultivation. There are more than 4 million farm holdings, which have 22 million field plots. Economic success of farm holdings is very low because of the small size and uneven geometrical shapes of the lots. Agricultural land fragmentation still occurs. The main reasons are: inheritance law; property and commerce laws; land use policies and the construction of agricultural infrastructures; hiring and distribution of state land to farmers. 57

61 According to Article 678 of the civil law, land consolidation is essential to increase productivity of agricultural land. Land consolidation assistance is provided by two official organisations. The Land Reform Law of 1984 provides for both voluntary and compulsory land consolidation under the supervision of the General Directorate of Agricultural Reform. Until now, the General Directorate of Rural Services has performed voluntary land consolidation works. Compulsory land consolidation practices have been applied only in state land areas. Land consolidation process Prior to the consolidation decision, two main aspects have to be taken into consideration: one is the economic, technical and social needs and the other concerns the desires of the land owners. Preliminary studies The first step in land consolidation consists in a preliminary meeting with the land owners. All the advantages of consolidation are explained to the farmers. If approved by two thirds of the owners of at least half of the involved area, the land consolidation project can be carried out. Cadastre, one of the most important components of the studies, is the second step in the land consolidation process. If no appropriate cadastral maps are available for areas which are to be consolidated, such maps, complete with topographic data, parcel shape, coordinates and the other existent land conditions are to be prepared. After obtaining the cadastral information the boundaries of the area planned for consolidation are determined in the field. The consolidation area should comprise all parcels of the owners. The list of owners and title deeds are prepared from the data obtained from the land office. Land consolidation is approved according to the list of owners and title deeds. The approving persons must hold at least half of the area and comprise two thirds of the owners. The preliminary study report is prepared. This addresses: (1) the location and the amount of the total area planned for consolidation; (2) cadastral information on the land parcels and present owners; (3) soil, topography and other natural features of the area; (4) type of land use; (5) agricultural production potential; (6) number of farmers and agricultural enterprises; (7) land fragmentation data, including number and shape of parcels; (8) requirements concerning irrigation, drainage, soil reclamation and conservation, transportation structures etc.; (9) recommendations and conclusions. Cabinet approval After being examined and approved by the General Directorate of Rural Services the report is sent to the cabinet. After cabinet approval, the land consolidation decision is published in the official gazette. The main planning process is started. Planning 58

62 The consolidation decision and consolidation area are publicised using common facilities in the area. A declaration that This parcel is in the consolidation project area is included in title deeds. The existing situation of the project area is determined with regard to irrigation, drainage, land levelling, soil reclamation and conservation requirements. All detailed works are planned. Maps of the project area are prepared using the topographic and cadastral structures with land ownership figures. For land evaluation purposes, soil surveys and land grading are other essential and important components of the planning. The land grading method at present applied by the General Directorate of Rural Services uses interdisciplinary studies performed by the grading commission comprising technicians, farmers and other experts. The first step in land grading is the determination of the soil index (IS). This is done through soil surveys. Soil depth and profile group, topsoil texture, land slope, and other factors (drainage, salinity, degree of erosion, etc.) affect the soil index. The soil index ranges from 0 to100 points. Another grading criterion is the land productivity index (LPr) which is determined by the soil characteristics and the experiences of the farmers. The productivity index ranges from 0 to 10 points. The last land grading criterion is the land position index" (LPo) which is determined by the distance to the inhabited centres, the plot shape, the road condition, etc. The land position index ranges from 0 to 20 points. The land parcel index (PI) is then computed using 70% of the soil index value, and adding the land productivity index and the land position index values. PI= 70% SI + LPr +LPo The value of parcels (VP) is calculated as a function of the parcel area and the parcel index. After grading of the existent land parcels, all other physical requirements for successful farming, including irrigation, drainage, conservation etc. are planned for implementation. Six months before project application, all land owners are to be informed, to protect their interests. Implementation As far as possible land is reallocated to a farmer as a single plot with appropriate characteristics; account is taken of: farm size, topographic conditions, type of soil, type of land use and irrigation method in each block; each block is bordered by field roads, and includes irrigation and drainage systems. 59

63 The Parcel Index is recalculated for the new land allocations after completion of the physical works in the planned area, including irrigation, drainage, land reclamation, field road facilities, etc. The new plot allocated to a farmer must have a grade equivalent to the original land parcels held by the farmer before consolidation. Grades Parcel index Parcels from grades 1 to 7 can be consolidated together, as can be parcels of grades 8 to 10. The success and effectiveness of the land consolidation project depend on the Consolidation Ratio (CR). This is the ratio of parcel numbers after land consolidation (n) to parcel numbers before land consolidation (N). When the land consolidation ratio increases, parcel size also increases, farm management becomes easier and the effectiveness of land consolidation extends for a long period of time. Conclusions A number of measures have been taken in Turkey to improve the livelihood of farmers by increasing crop productions and providing infrastructure facilities in rural areas. Land consolidation has a direct or indirect effect on rural development. The application of these rural development activities requires large-scale legal arrangements and organisation. Land consolidation works have been carried out as of 1966 within village borders and irrigation project areas, but the desired level of development has not yet been reached. After more than 30 years of experience a new draft of law concerning the use of land resources including land consolidation has been dealt with in conformity with the State Development Plans. The need for soil and water resources has been increasing every year all over the world, and in Turkey as well. The rapid growth of the world population may lead to starvation in the 21st century unless urgent measures are taken. It must not be forgotten that as human beings our future rests on the land. 60

64 5. Comparative experiences from other Countries 5.1 Policies for local (municipal) government: Land and assets (Australia) John Fisher Foreword This presentation draws on the experience gained by developing and implementing policies and systems, mainly in Australia. It also outlines the major attributes of key systems and describes the main factors that influence the Local Government land and asset policies in Australia. General literature reviews indicate that the guiding principles for a sound land and asset management policy at the community or local government level are universally applicable. However, while the principles are universal each community has specific requirements that dictate the priorities accorded certain policies and the implementation strategies adopted to achieve the best results for the particular community. Australia : An Overview Australia is both a continent and a nation. As a nation, Australia is a federation of States and Territories with 3 levels of Government: 1. Commonwealth. 2. States (6 states and 2 territories). 3. Local Government, or Municipal Councils. The split of functions between the Commonwealth and the States is similar to the USA or Canada. However there is an important difference in relation to land management. In constitutional monarchies, such as Australia, the Crown is said to be the residual owner of all land. In Australia the States are sovereign entities in their own rights, they represent the Crown and thus are the residual owners of all land in their part of the continent. The Crown is Queen Elizabeth II of Great Britain and the Commonwealth who is represented in each State by a Governor. The laws of the State are made by a parliament of elected representatives who request the Governor to promulgate laws the parliament has voted for. Accordingly, in Australia the States, and not the Commonwealth, (or federal government), legislate for and control all granting of land to private and public entities, land titling and the processes for effecting changes of ownership. The States also own any land that has not been ceded by grant to another entity; this is called Crown land. The sovereignty of the States also means that law relating to land is not uniform throughout Australia, although the differences are minor and the States generally aim for alignment. 61

65 The Roles of the levels of Government In broad terms the roles of each level of Government in relation to land management are: 1. Commonwealth The Commonwealth s primary power in relation to land derives from its power to manage external relations and resultant obligations. Many international treaties signed by Australia involve obligations that directly or indirectly affect land management. The Commonwealth is Australia s signatory to these treaties and therefore it must negotiate with the States to effect the provisions of each treaty. Mainly as a consequence of the treaty obligations the Commonwealth has broad control of resources and environmental management and through this affects policy on mining, fisheries, forests, heritage issues etc. Generally the power the Commonwealth seeks to exert over land is not explicit (because the States are the ultimate land managers), so it usually must achieve its objectives by negotiation and or persuasion. This leads to interesting political debates and lengthy negotiations. A recent example is what is termed Native Title Legislation, or recognition of the aboriginal owners claims to land. 2. States. As a consequence of their sovereignty the States are the main controllers of land and its use and development. States: - determine the processes for: (a) alienation and subdivision of land and relevant subdivided land rights; (b) creation, issue and transfer of land titles; (c) management of land title creation and transfer processes. - control land use and development through Planning and Building Control legislation, and (a) after consultation with Municipalities, promulgate Planning Schemes which define specific allowable land uses and development criteria; (b) promulgate Building Control regulations that prescribe allowable materials, occupancy conditions (room sizes, etc.) and safety requirements. - control the management of Crown Land. This land consists mainly of National Parks and reserves, i.e. alpine areas, forests, town water catchment areas, foreshore reserves, etc. Because of the number of pieces and area of Crown land and the resultant magnitude of the task States have largely devolved management to the Local Government through Management Committees and similar structures. - In addition, States: (a) establish Local Government entities which, in Australia, are usually Municipal Councils; (b) enact legislation on public health and safety measures and also legislate to enhance community benefits and protect private property and personal safety. 3. Local Government or Municipal Councils. Australian Municipalities vary widely in area and population. Usually inner urban municipalities have lower populations and smaller areas than the outer urban 62

66 municipalities, while country municipalities have very large areas and very small populations; however, significant variations are to be found. Examples of Municipal areas and populations of the State of Victoria, the second smallest and second most populous State, are given in the following table: Locality Area Population (sq. km.) Inner Metropolitan A 20 70,750 Inner Metropolitan B ,000 Mid-Outer Metropolitan - A ,400 Mid-Outer Metropolitan - B 1,283 38,000 Country A 1,420 73,200 Country B 9,029 5,270 Municipal Councils usually comprise about 10 councilors elected in accordance with a State Local Government Act which establishes the powers and functions of the Council and of its officers and employees. Main powers conferred are powers to: (a) promulgate laws on local matters (e.g. car parking and traffic management); (b) raise revenue from taxes and charges, mainly from the tax on land ownership and occupancy ( Rates ). Rates are Councils main source of revenue. Main functions delegated to Councils concern: (a) management of regulation of land use and development; (b) control of certain public health and safety issues pursuant to State promulgated acts and regulations; (c) provision and maintenance of roads and drains, parks and reserves; litter collection and disposal; (d) provision of other facilities and services for community wellbeing and enhancement. In relation to land and assets, Municipal Councils have 4 main functions, namely: - regulation of land use and development, controlling: (a) permits for the intended type of land use; (b) size and scope of any possible land development; (c) scope and nature of buildings and relevant materials and constructions; - collection of revenue from Rates levied on land and its occupancy; - strategic planning to enhance future livelihood prospects for the community; - owner and controller of a significant land and assets portfolio. Aims of Local Government (Municipal Council) Policy In general terms, the overriding aims of Municipal Council policies are: 63

67 - to improve financial and operational performance and the quality of the services delivered to the community; - to minimise risks: (a) arising from and associated with delivery of their various services and regulatory functions, ownership and management of land and assets; (b) that may adversely affect the finances of the Municipality including the capacity to generate the revenue required to continue operations; - to optimise future livelihood prospects by enhancing social and economic opportunities and environmental management. Council strategic planners aim to design policies and strategies consistent with the above so that communities may have easier access to services and facilities that better meet their present and future needs, and at lower costs. Preconditions for effective policy As in any organisational context, in order that a Council can develop and implement effective policies and achieve the targetted objectives, a number of preconditions are necessary. The key preconditions comprise: i) Formalised principles of sound governance Sound governance requires that organizations develop and implement effective processes that can enhance the security and long term viability of the organization and ensure accountability and transparency of actions. Governance arrangements will include: - identified and documented processes and required outputs; - effective resourcing, i.e. qualified and properly trained personnel, and identified responsibilities; - quality assured performance reporting; - appropriate risk assessment and management measures; - formalised planning, evaluation and budgeting arrangements, - financial management procedures and processes that bring to account the current cost of use of a physical item and its future potential. Governance and reporting are becoming increasingly important for organizations, particularly since society demands better performance with respect to social and environmental matters. Organisations are increasingly required to report to regulators on a variety of matters requiring implementation of processes for collecting and evaluating information and performance reporting and managing communication with the regulators. ii) Information and information systems These are basic for monitoring the health of an organisation and for developing policy. Good policy development requires an understanding of the operational environment: information systems can provide such by enabling situations that require corrective action to be identified, analysed or evaluated. To produce information useful for policy development and management the systems should: 64

68 - incorporate procedures for collection of relevant, timely and reliable data; - have the capability to record and manipulate data in many ways; - be integrated with other systems in order that data collected for one function can be used by others; - enable identification and analysis of: (a) individual transactions or items, amd classes or groups of transactions or items; (b) type, frequency and distribution of transactions or items; (c) tracking of processes and events preferably against predetermined process parameters and event criteria. As noted in the requirements for sound governance, reliable information and smart information processing capabilities are rapidly becoming the keys to good, high quality, municipal government. In fact modern information processing systems yield enormous gains in efficiency, effectiveness and quality of services delivered. They also offer the possibility of producing reports and analyses from differential media and formats. Main features of present modern systems are that: - they enable integration of data from a large variety of sources and in a large variety of forms (texts, numerical and spatial data are able to be accessed from any point in the system); these systems are open systems which are OLE (enable object linking and embedding) and OBDC (open database compliant) and rely on 4 th generation computer language relational database management systems, client-server architecture; - they can provide both text and graphic display and spatial data processing and analysis (Geospatial Information Systems technology); - they are workflow enabled, i.e. programmed to map and automatically record workflow processes, prepare performance reports for management and workflow priority reports to assist individual staff to better manage their own workload; - they can produce statutory reports required by regulators virtually immediately and with little or no additional ( non-productive) effort. While modern information systems are essential for good governance, to some extent they are a product of it. Even the best systems cannot produce the required results unless their capabilities are fully exploited and adapted to different circumstances and organizations. These should ensure that: - the data are entered only once, to ensure integrity (though they can later be used by different organisational units), - the full data, and not summarized data are collected, and that the collected data are for a specific use; - the data are entered as and when they arise, and only by the original operator; this ensures timeliness and reduces data entry error. This entity wide data management approach implies that the installation of a new system usually involves not only the installation of new hardware and software but also: - transfer of the data from the old to the new system and identification of the new data to be collected and of those that are obsolete; 65

69 - review and mapping of the whole involved business process, from application receipt to final approval. Proprietary, ready to run systems are pre-programmed with much of this material but there is always a need to review and adjust to suit local circumstances and organizations. iii) Management structures and resources The final preconditions for effective development and implementation policy are: - management structures for approval and quality management services, and delegations; - resources (human, physical and financial); - provision for training, development of personnel skills and workplace safety. Municipal Council land and asset related policy targets As detailed earlier ( Local Government or Municipal Councils ) Municipal Councils have 4 main functions in relation to land and assets. Each of these functions requires policies that reflect the particular needs of the function and the key objectives of the Council regarding said function. For each of the land and asset functions indicated below (points (i), (ii) and (iii)) the main targets of Councils policies are: (i) Regulation of Land Use and Development and Collection of Rates - Provide high standard services to customers. The customers are the persons who apply for permits and make enquiries concerning their land or land they intend purchasing or on which they intend to build. Generally Municipal Councils recognize the need to focus attention on serving community residents and on people who need to conduct business there. In particular State Governments have enacted legislation aimed at assuring the provision of high standard services establishing, for example: (a) the time a Council should employ to consider a permit application; (b) that the provision of Council s services be open to competitive offers, whether from other Councils or private firms. Also States have opened to the private sector various functions which were once limited to Municipal Councils. In the State of Victoria, for example, a person can choose to obtain a building permit either from the Council or from a registered private building surveyor. Such initiatives demonstrate how much emphasis Municipal Councils now place on high standards for customer services. High standard customer services mean: (a) ensuring that permits or requests are processed rapidly and enquiries answered exhaustively and promptly; (b) provision of readily accessible services. 66

70 Councils are increasingly providing electronic services, thereby speeding up service delivery and improving information accessibility, as customers do not need to go to the Council s offices to get the information; this is particularly appreciated by those who may be hundreds of kilometers distant. At the same time the Councils recognize that providing high-standard services can be costly unless done efficiently and that improving efficiency means improving accessibility, availability and quality of information. - Minimise risks in processing permits and in administering and enforcing regulations. The main way Councils can minimise these risks is by ensuring that related processes are strictly adhered to and that permits are in accordance with the provisions of the enabling law. Risk minimisation by ensuring strict adherence to correct procedures in Land Development and Building permit approvals is particularly important. Errors by Councils can be extremely costly. In two recently publicised cases Councils had to reimburse millions of dollars to land developers as penalty for permits issued and later invalidated. Risk can be minimised through: (a) strict application of quality assured procedures; (b) complete and timely information accessibility; (c) careful analysis of the information in the context of the laws and regulations. Councils are increasingly acquiring and using information technology (IT) solutions for monitoring and managing the granting of permits and other regulatory processes. They are also making greater use of quality assurance and management techniques. - Maximise Rate collection revenues, optimise collection efficiency and minimise associated risks. As for any tax related function, the main objective is to ensure identification of tax payers and taxed transactions. Thus, this is essentially an information collection and management exercise and modern electronic data processes have enhanced the integrity of the processes and also dramatically improved efficiency. Recent enhancements in processing spatial data have further improved performance by improving the quality and efficiency of land valuation processes; further efficiency improvements have arisen from access to a range of electronic payment methods. As a rule electronic data processing has also reduced risks in view of the fact that: (a) the data are original and not copied from records; (b) all processes are automated and therefore human and/or communication errors are minimised; (c) transactions are fully recorded including time, operator, etc.; (d) records are readily duplicated and easily stored for future reference. (ii) Strategic planning to enhance future livelihood prospects for the community The key target of the strategic planning policy is to provide better access to better information about the Municipality. In this manner planners are better able to: (a) identify the future needs of the community, and (b) design strategies that will improve the effectiveness of the policy and the services delivered. 67

71 Generally the policies developed to enhance services and facilities will not address land and assets but the availability of suitable land and assets. All services need a place (land) from which to deliver the service, and tools (assets) to deliver them. Consequently, analysis of needs for services invariably requires analysis of the likely customer base, its size, demographic and spatial distribution, etc. to be able to determine the best way to deliver services and the location to optimise access. Accordingly the main policy target is the delivery of reliable, timely and relevant information through systems that have good numerical and spatial analytical capabilities. Strategic planners use such systems, for example, to optimise the value of land and its uses. Examples of commonly applied strategies are: - targeting types of business that can benefit from the particular strengths of the community. The assumption is that this will improve business performance and profitability and in turn have a positive effect on land values and ultimately Rate revenue; - improving property values by improving the character of streets by, for example, planting street trees or introducing better traffic management measures. Improved property values also lead to increased Rate revenue. (iii) Owner and controller of a significant land and assets portfolio Municipal Councils own and control very large land and assets portfolios. Many Councils have asset portfolios valued at A$1 billion (US$650M) or more. The majority of the value (up to 80% of the total) is usually in roads and drains. Due to the magnitude of the land and asset holdings, good performance is essential because owning and controlling land and assets is not a free exercise. Actual costs of capital and direct costs relating to owning, maintaining, operating, insuring and financing assets, either through lease or purchase are very high and can make what appears to be an asset a liability. In addition to actual costs Councils also have a number of implicit and opportunity costs arising from ownership and control of land and assets. The primary targets of policy for land and assets owned and controlled by Councils are: (a) to improve physical and financial performance and reduce costs and risks of owning, controlling, operating and maintaining land and assets and, (b) to improve the efficiency and effectiveness of processes for planning, acquiring, redeploying and disposing of land and assets. In essence, the above ensures that: (a) proper assets are acquired; (b) assets are used and maintained to deliver their originally planned service potential, and (c) assets are disposed of when they can be no longer used effectively or have reached the end of their service life. Tools and Practices to Assist Achievement of Policy Targets Tools and Practices exist that can aid Municipal Councils to achieve their policy targets; Municipalities already on the road to improved performance will almost certainly 68

72 make use of them However, these Tools and Practices are only aids to improved performance and can only be fully effective if the Preconditions to Effective Policies exist. In fact their application requires well qualified and fully trained personnel, clearly defined functions and responsibilities. Below are discussed appropriate tools and practices for Council functions. (i) Regulation of Land Development and Building Approval Information systems Regarding the Regulation of Land Development and Building Approval function the tools that will best assist in risk minimisation and improve customer service efficiency are information systems that: (a) can call on a central data base of owners names and addresses and property addresses and of property-related information; (b) can identify specific regulations or constraints on land and owner; (c) are workflow enabled to monitor processes, record transactions, etc, and identify when a corrective action is required, and (d) can identify adjacent properties and related owners, and identify similar applications elsewhere through a land parcel based Geospatial Information System (GIS). The capability to display graphically all the land of a Municipality with a land parcel based GIS is very valuable as it confirms that the parcels have been totally identified; a missing parcel would in fact appear as a gap on the map. The values of this capability are that: - the risk of oversight in levying Municipal tax rates is eliminated; - in the cases requiring adjoining property owners to be identified the processes are simplified and accuracy improved. This is especially important for minimising the risk of erratic issue of land permits; - it permits identification of all land under a single ownership, (e.g. the Council itself : see further on under asset management); - underutilised land can be identified. Underutilised land owned by the Council can be sold to generate revenue and increase the productive land; - customer service is improved. GIS enables adjoining locations to be easily identified and customer enquiries to be readily satisfied. The fact that these systems are workflow enabled is very important for enhancing quality management. It allows the key steps in any process to be monitored in terms of required time and pre-actions magnitude. (ii) Management of Land and Assets Owned and/or Controlled by Council. Regarding this function the two fundamental prerequisites for sound asset management are: - a corporate planning process that incorporates: (a) integrated services and financial planning, with (b) long-term (3-5 year) plans; - financial management arrangements that bring to account the current cost of use of items and their future service potential. 69

73 The importance of these two Practices is that: - corporate planning processes that integrate services and financial planning permit situations and new initiatives (Strategic Planning studies) to be analysed in relation to their impact on future budgets. The implications are assessed for the recurrent budget (ongoing cost of operations) and the capital budget (cost of any associated assets). The aim is to avoid commitments in the acquisition of assets without considering related on-going costs of ownership, maintenance and - most important of operation. - financial management provisions that bring to account the current cost of use of capital items are the basis for a sound asset management. They require assets to be detailedly recorded, and their conditions and value to be assessed in order that their full potential is exploited; this is indispensable for the development of performance measures and to improve performance. For Councils, as for any entity, managing the costs and risks of owning and controlling physical items is a very complex exercise, but in principle the overriding aims of Councils are to: - enhance the physical and financial performance and reduce costs and risks of owning, controlling, operating and maintaining land and assets; - improve the efficiency and effectiveness of processes for planning, acquiring, redeploying and disposing of land and assets. Focal Points for Asset Management Management implies the monitoring of situations and consequent action to ensure specific results when information so indicates. This requires access to timely and reliable information and therefore, the establishment of specialized information systems. In general these systems will focus on the following main issues, i.e. to ensure that assets (or land): (a) are secure from loss or theft, are available for their intended use and are under appropriate custody; (b) are managed to optimise related risk and obligation situations and to achieve planned value or service potential; (c) are used and operated efficiently for their intended purposes, and that (d) processes relating to assets acquisition, maintenance and disposal are efficient and effective and take account of the Council s business and resource allocation priorities. Establishment of effective asset management arrangements To address the above issues it is necessary to establish a co-ordinated set of arrangements that can report on asset performance. On the basis of said reports proper action can be taken to ensure achievement of the expected performance. Basic steps for the establishment of said arrangements are: 1. Recording of assets (Step 1) 70

74 The first step is to establish the working definitions of assets ; the types, or classes, of assets, and the reason why each type of asset needs recording. At the same time the Land and Asset Recording arrangements and relevant key requirements of the recording system must be established. The following definitions and descriptions are based on experience and may be a useful guide. Definition of assets The definition most commonly understood is that used by Accountants but, in this context, this definition needs to be broadened to encompass all the physical items a Council has to manage. Accordingly, Assets are herein defined as physical items that: (a) Councils use to deliver services; (b) are retained for a specific future use, and (c) Councils manage on behalf of the community. This definition includes: - Non-current physical assets (Accounting definition): (a) land and buildings; (b) permanent improvement works (roads, buildings, dams, etc.); (c) furniture, plant and equipment, IT equipment, motor vehicles, etc.; (d) natural resources, forests and water for agriculture and mining; (e) cultural property, books, artworks, etc. - Other physical items owned or controlled by Councils, such as trees in streets and parks. While these are not Assets in a strict accounting sense, nevertheless they are physical resources that Councils must manage and maintain. Classification of assets The above two classes of items are generally classified as Core Assets. Excluded are the items not used by the Council or which are managed by it for the community, and the items considered as surplus. These latter items are generally defined as Non-Core Assets. A separate class of assets is Heritage Assets. These are a sub-class of Core Assets and have a particular social, historical or environmental importance or value for the community. They include: old buildings, places or physical features, artworks, etc. These items are to be retained and husbanded for their intrinsic special value for the community or Council. This distinction is important in relation to: Non-Core Assets : an issue that Councils need to address is the establishment of criteria on asset retention to ensure that Core Assets are retained and Non-Core Assets are readily disposed of. Disposal of Non-Core Assets is an important portfolio management function. Ownership of physical items, including land, involves significant costs and risks. Retaining assets, especially land, beyond their efficient use potential (a) reduces Council s access to capital; (b) reduces Rate Revenue income and income from potential increase in economic activity; (c) increases maintenance costs, and (d) increases the number of involved disadvantaged or injured claimants. 71

75 Recognition of assets Decisions on asset recording are dependent on the following 5 main reasons: (i) Financial reporting : Financial reports show the residual usefulness of the assets and their rate of depreciation. (ii) Risk Management : This identifies and records for future management attention: a) All assets, regardless of size, that have a bearing on safety, particularly of personnel, or are critical to the continuity of Council s delivery of key services; b) All leased or borrowed assets. (iii) Insurance : Councils need to insure against injuries to persons or losses to property arising from assets they own or control. Insurers require all assets covered by a policy to be identified, described and located. (iv) Resource Management : In this case there are two reasons for recording assets: (a) To identify items requiring maintenance action. Separate asset management and information systems are to be established for various types of assets (e.g. pavement management systems for road maintenance management, etc.) and the summarized information introduced into a corporate Asset Information system. (b) To achieve efficient use of resources. This implies that the assets portfolio is reviewed from time to time to ensure optimisation of the invested capital return. Review should be conducted annually in the framework of the monitoring of functions and services. In the event that planned levels of performance are not achieved, portfolio adjustments can be made through acquisition, redeployment or disposal. (v) Security and accountability : Good governance requires that assets are protected and kept safe. This means that the following items should be recorded: (a) assets that are small, portable and attractive; (b) assets that are essential for delivery of services. 2. Information to be recorded and recording priority (Step 2) Here decisions concern: - asset recording priority; - key information required about assets. Asset recording priority : The factors that determine priorities vary, but my experience, which is based mainly on the need to manage assets-related risks, suggests the following: 1) Land must have a high priority: identifying all the land owned by a Council minimises risks and is also a good method for identifying surplus assets that can be sold to generate revenue. Accordingly, a land parcel based GIS should be an important priority, particularly when other benefits, as discussed earlier are involved. 2) Assets that are critical to Council services provision or which, according to risk assessments, might be harmful to persons or damage other property clearly need monitoring and, thus, should be recorded. 3) High-value assets which, if lost or damaged, involve high replacement costs. 72

76 Key information: With respect to point (2), details to be recorded will vary according to the type or class of asset. Below are listed commonly maintained information items which may serve as a useful guide to the scope and nature of the information needed for effective asset management. The list is not exhaustive and, for example, does not include items related to taxation since at present in Australia taxes do not affect Council-owned assets. - Location and Description: The information to be recorded needs to be sufficiently exhaustive for asset location and identification. This will include: full description (e.g. title or serial number etc.); sufficient details for identification of item location; details on ownership and control, including rights and obligations; this is particularly important in the case of leased assets as lease terms and conditions vary. - Original Cost and Purchase Details: The original cost and purchase details (e.g. supplier, delivery date, etc.) should be recorded at the time an asset is acquired to allow eventual warranties to be exercised. - Valuations: Assets should be revalued on a periodical basis, (at least every 5 years). Valuations should be conducted by independent professionals, not necessarily true valuers, but persons skilled in one particular type of asset (e.g. Engineers for road valuation). Valuers need to be fully informed of the valuation purposes so that they can determine the most appropriate valuation method and the value to ascribe to each purpose. Valuation methods will vary dependent on whether they concern a single, probably highvalue item, or a bulk valuation of common and less valuable items. Below are three issues that need to be considered before deciding on an appropriate value for a particular need or circumstance: (i) Financial Reporting: As said, the aim of Financial Reports is to show the residual service potential of an asset. In principle this is represented by the amount needed to buy what the asset provides. This can be the market value of an equivalent asset or the net present value of cash flows derivable from the asset. However, for most Core Assets in the public sector, which generally are not readily available second hand (e.g. a road or a drain, etc.) the accepted value is the Written Down Replacement Cost, i.e. the cost of a new equivalent asset reduced by the amount that reflects its age, condition and obsolescence. (ii) Insurance: The value generally requested by insurers is what is termed Insurance Value which is the cost of a new replacement plus the costs associated with installation. Generally the Insurance Value is 20% greater than the Replacement Value. (iii) Resource Management: Valuing an asset in a resource management context is primarily to ascertain whether the same functions can be performed by another asset at lower cost. This applies in particular 73

77 to cases where the general use of the land surrounding the asset has a much greater value than the public sector use. Through the sale of the asset and relocation to a less valuable land, Councils realize an increase in revenue. 3. Reporting Requirements (Step 3) Once assets have been recorded it is necessary to define the information required for efficient asset management. To this end Councils must: - perform regular stocktakes, that is, visually inspect each and every asset on a defined basis. As the purpose of the inspection and the nature of the assets vary, the inspection intervals shall also vary; - establish and perform regular asset condition assessments. Mostly this implies identification of maintenance requirements; - establish performance and reporting requirements. In principle three issues are to be considered: (i) Financial performance The performance of an asset in a financial sense is reflected by its depreciated value, due to age, use or obsolescence. When an asset is acquired, its anticipated life determined and its value pro-rataed, in years, over that life period, the annual amount is deducted from the previous value to give the value shown in the current year s financial report. When the asset is re-valued, say in 5 years, the valuation is adjusted to take account of the re-valued amount. This enables two things: a) The adjustment reveals the asset performance. A positive adjustment indicates a good performance, and vice versa. b) Re-valuation takes account of the condition of the asset. An asset that has undergone recent maintenance should be subjected to a lower depreciation rate because maintenance should have extended its life. Thus re-valuation enables reconciliating depreciation and maintenance requirements. (ii) Physical performance Just as revaluation enables financial reporting to reveal actual as against planned performance, likewise asset condition assessment and reporting arrangements must incorporate elements that indicate the anticipated life of components or particular or critical maintenance needs and incorporate these in maintenance budget plans (see Step 5). (iii) Service or operational performance Organisations need the means to establish if an asset is being fully utilized or is limiting operations, that is, if the asset is performing the functions that are needed. These are factors that relate to the service that assets deliver and when services are reviewed so their use of capital will reveal how effectively assets are performing. 4. Risk Management and Management Arrangements (Step 4) 74

78 All physical items involve risks, whether they are injuries and damages to users and/or third parties and property, or loss of assets and consequent loss of income. It is necessary that a Council establishes proper procedures for determining which risks, and what level of risks, it will manage itself and how it will deal with risks it does not want to manage (e.g. by insuring). To do this a Council needs: (a) to be aware of the obligations inherent in ownership and control; (b) to assess the risks that are associated with the assets it owns and controls. Councils should have risk assessments carried out by independent assessors and should have them reviewed regularly (e.g. every 5 years). Furthermore, risk management arrangements should be defined as each asset is acquired. Once the risks and relevant management strategies are determined, detailed management plans for various types of risks and assets can then be developed. These shall incorporate anticipated performance targets and reporting arrangements and these will be captured by the asset information system. At this point it is worth recounting some experiences indicative of the type of information to be recorded and the benefits accruing from detailed recording. - A main asset-related issue leading to claims concerns the injuries to people due to poorly maintained sidewalks. The frequency of such claims has led Councils to focus attention on this as a key maintenance item. - In a certain case the insurance premium regarding renewal of a major Industrial Special Risks policy was reduced from the initial $25M to $14M when a detailed register of assets to be covered was provided. This amount was further reduced to $8M when we provided: (a) an electronic map of the assets that enabled asset identification; (b) historical incidence of claimable events (e.g. floods, earthquakes, etc.) which demonstrated that Australia, and in particular Victoria, is a very safe place, and (c) evidence that the legal and regulatory framework in which the insurance was to operate is well established and ensuring certainty of results. 5. Maintenance and Operational Planning, Evaluation and Budgeting (Step 5) All land and assets require regular inspection and maintenance, and this requires planning to ensure: (a) safe and efficient operation; (b) minimum risk of injury to operators and third parties and property; (c) retention of the asset s value and service life (assets need to be maintained to achieve related service planned life). The main issues to address to ensure efficient and effective maintenance of assets are: - clear understanding (and definition) of the types of work that consume maintenance funding and those that constitute capital expenditure, so that funds are not wasted through maintaining assets beyond their planned or useful life; - separation of the various types of maintenance to enable using different management approaches; for example, emergency maintenance requires quick and expeditious action, while major maintenance needs to be thoroughly planned. Because of these different needs, different procedural rules and different funding authorities are required; 75

79 - provision of information systems that can portray the actual physical conditions of the assets, thereby permitting effective maintenance prioritisation and programming to be performed. - maintenance plans and programs that are forward looking (say 3-5 years) and prepared in the context of the Council s overall resource allocation processes (budgeting). Forward plans enable Councils to have a better understanding of the likely future funds requirements. 6. Definition of Asset acquisition, redeployment and disposal operations (Step 6) Asset acquisitions, redeployments and disposals will arise from changes in service delivery patterns. For example, population growth may lead to the need for a new child care centre, while technological evolution will produce the need to dispose of a particular computer and acquire a more powerful one. In operational terms all such changes must be planned in the context of plans for services the Council delivers and these plans in turn must also take account of the financial objectives of the Council. Accordingly, the Council s action should address the development of advanced asset plans that relate to advanced plans for services and the medium-term objectives. As with maintenance, Councils also need to establish arrangements for efficient and effective project planning and implementation; this, in turn, requires sound project definition and management arrangements, that include: (a) clearly defined objectives and scopes for each project; (b) planned time, cost and quality outcomes; (c) defined management and resourcing arrangements. 7. Setting up and staffing of operating structures (Step 7) From Step 6 above it follows that asset acquisition, redeployment, disposal and maintenance activities are similar to projects in that they have clearly defined objectives and specific commencement and completion points. These types of activities require management structures different from the structures that manage continuous types of operations. Councils that are good at asset management recognise this and have different arrangements to ensures that: (a) projects are identified and properly managed as to time, cost and quality objectives; (b) managers have clearly defined responsibilities. 8. Nominated and delegated responsibilities (Step 8) In general the laws establishing Municipal Councils provide that Chief Executive Officers be responsible for the safekeeping and performance of all assets owned and controlled by the Councils. Specific performance responsibilities may be delegated by Chief Executive Officers to key managers who, also, may delegate responsibilities further. Delegated responsibilities must be clear and unambiguous. Below are 3 relatively typical delegations of responsibility: 76

80 - responsibility for the performance, condition and retention of value of an asset rests with the manager of the service using the asset. These managers may delegate safekeeping responsibilities to sole user employees. - responsibility for financial performance of the overall assets portfolio lies with the Chief Financial Officer of the Council who shall organise stocktakes and overall valuations from time to time. - Councils require: (a) Asset Managers to prepare the asset maintenance plans, in conjunction with the service providers, and consolidate them into on-going 3-year plans; (b) Risk Managers to monitor claims and ensure that regulatory inspections are carried out. Risk Managers also provide for periodical risk assessments and insurances. 9. Establishment of performance appraisal programs (Step 9) The purpose of asset management is to achieve better performance and outcomes; accordingly, it is necessary to establish means for measuring and comparing present and future situations. To be effective performance appraisal programs must be: - simple to operate, (easy data collection and reporting); - reliable (accurate results); - relevant (provision of useful information); - timely (reflection of current situations). Performance appraisal programs are designed to address many aspects of performance related to individual assets, groups of assets or a whole assets portfolio. For example: - financial managers are concerned with the amount of capital employed in the various business areas of the Council and in its depreciation so that they can better determine the true cost of each Council service; - valuers are interested in land value fluctuations and in GIS technology for its appraisal capabilities; - engineers are interested in roadwork performance information to facilitate road maintenance planning; - park managers are interested in the health and well-being of trees etc. They have developed GIS based programs that better assist them in planning and management at lower costs and less accident risk. Conclusions Municipal Councils aim to: - improve financial and operational performance and the quality of the services delivered to the community; 77

81 - minimise possibilities of risks: (a) arising from and associated with: delivery of their services; performance of regulatory functions; land and assets ownership and management responsibilities; (b) that may adversely affect the finances of the Municipality, including the capacity to generate the revenue required to continue operations; - optimise future outcomes by enhancing social and economic opportunities and environmental management. In relation to their Regulatory and Revenue Collection functions, Councils adopt policies aimed at: - providing high-standard customer services, seeking to ensure: (a) rapid processing of permits or requests and exhaustive and expeditious replies to enquiries; (b) readily accessible services. - maximising Rate collection revenues, optimising collection efficiency; - minimising the associated risks through the implementation of a quality management policy. In relation to Land and Assets owned and controlled on behalf of the community, Councils aim to improve performance by: - adopting financial management procedures and processes that enable them to identify and report on the current cost of using physical items and the remainder asset service potential Councils implement these policies as part of improved corporate governance arrangements that demand stricter performance accountability and greater transparency in reporting, and which necessitate implementation of information systems that enable a range of analytical tools including Geospatial Information systems. Good governance also demands greater accountability for, and from, staff for the resources they use in the delivery of Council services.. Some of the most important Tools and Practices employed by Councils are systems that: - Regarding regulatory and Revenue Collection functions: a) use a central data base containing owners names and addresses, property addresses, and land and property related information; b) identify regulations and/or constraints relative to the specific land or owner; c) are workflow enabled to monitor processes, record the time and the operator of each transaction, etc, and identify when corrective action is required. - Regarding management of own assets Councils use asset information systems that: a) identify the items that are relevant for resource and risk management, financial reporting and security purposes, including values, condition and performance, and which support: (a) risk assessment and management activities; (b) maintenance and operational planning, evaluation and budgeting arrangements; (c) asset acquisition, redeployment and disposal responsibilities that aim at efficiency and effectiveness, address long-term objectives (3-year plans), and are formed in the context of an integrated services and financial planning framework or budgeting process. 78

82 The attached diagram shows the various system elements and associated interrelations. Modern Council Systems Diagram Information systems provide data and analytical capability capability to enable rational policy development. Financial Management *Receipts &Expenditure *Assets & Liabilities *Valuation & Depreciation Asset Information *Land, Fixed Improvements,Furniture Plant & Equiment, Natural Resources, Cultural Property. *Identity, Location, Controller. *Value, Life *Condition, Performance. *Associated Risks & Obligations Interfaces Land Information Text Information *Rates & Voters roll *Planning & Building *Animals & Health Licenses *Local Laws Permits Geospatial Information *Cadstre,Land Use & Electoral Zones *Topography & Physical data *Demographic data *Asset information (roads,drains, etc.) *Land Information 79

83 5.2 Land information systems and good governance (Canada) Ian R. Methven Abstract A general discussion of policy, governance and organizational development leads into an examination of the experience of the Province of New Brunswick, Canada in developing one of the first commercially available, on-line registry and land information systems in the world. This development, based on private/public sector cooperation, has been a positive experience with benefits for all participants. The public sector consolidated all land-related units into one lead organization with a clear mandate and policy, including the necessity to function in a business-like manner and become self-sufficient. Relations with the private sector evolved over time to provide an opportunity to develop trust and an understanding of respective cultures and objectives. It was found that agreements needed to be spelled out clearly, and that work needed to be chunked into achievable pieces or modules, with an incremental approach to development. A successful private/public sector partnership can result in self-sufficiency for the public sector, enhanced skills and capabilities for the private sector, and easy access to land-related information for citizens. Introduction Good land administration, which is fundamental to the economic and social development of any society, must take full cognisance of the cultural and ecological context in which it is to be developed and applied, and must engage all sectors of society. Underlying any land administration system is the cadastre or land information system. Dowson and Shepherd (1952) have remarked on the difficulty of defining a cadastre, but emphasise that it is essentially a technical and authoritative documentary record of parcellation embodied in a register. If the full benefits of a cadastre or land information system are to be realised, it must be developed and function within an integrated policy framework that addresses the social, cultural, economic and environmental issues of the particular jurisdiction. Thus the guidelines on land administration of the United Nations Economic Commission for Europe (UNECE) state the following: The modern cadastre is not primarily concerned with generalized data but rather with detailed information at the individual land parcel level. As such it should service the needs both of the individual and of the community at large. Benefits arise through its application to: asset management; conveyancing; credit security; demographic analysis; development control; emergency planning and management; environmental impact assessment; housing transactions and land market analysis; land and property ownership; land and property taxation; land reform; monitoring statistical data, physical planning; property portfolio management; public communication; site location; site management and protection (UNECE 1996). 80

84 Realising these benefits requires a broad policy framework that would include a commitment to economically and environmentally sustainable development (the subject of ecological economics), and social justice and equity. More specifically, within the context of land administration, it might be expressed as: to provide easy public access to integrated, land related information in support of informed decision-making (Finley et al 1998). This is a deceptively simple policy statement with deep implications for governance. The World Bank (1989) identified a number of issues associated with good governance including institutional arrangements and decision-making processes, policy formulation itself and the ability to implement policy, the nature of information flows and exchanges, and most fundamentally, the relationship between the government and its citizens. The latter implies an effective and responsive public administration system with a strong focus on citizen clients. This ultimately means providing land information as an easily accessible commodity through electronic commerce, and providing citizens with an interactive forum for participation in development of land policy. In most jurisdictions this will require a commitment to organizational change and development. Organizational development The issues or strategies that need to be addressed in the organizational development of an efficient, effective and service-oriented land information system include: integration or consolidation of land administration functions under a single agency; outsourcing and building strong partnerships between the public and private sectors; the choice of an appropriate mix of centralisation and decentralisation; and taking a business approach with respect to revenue generation and capitalisation. Integration Traditionally, land administration services have been fragmented across a number of government departments, all with their own jurisdictional imperatives of power, influence and resource access. Disparate data structures, quality standards and priorities, resulting in serious obstacles to sharing, coordination and integration, have accompanied these. Thus, for example, registry might fall under Justice, property valuation under Finance and mapping under Natural Resources or Planning (Dale and McLaughlin 1999). Overcoming these constraints requires a number of conditions including (Finley et al 1998; Nichols et al 1999): strong visionary leadership; designation of a single lead agency; recognition that land information is a common corporate resource; commitment to a common goal by source agencies; retention of ownership by contributing sources; commitment to quality assurance by all cooperators development of common standards; use of compatible computer technology; and allocation of sufficient resources to maintain currency of data and systems. 81

85 Outsourcing and Partnerships The delivery of land information services covers a wide spectrum from the national, government controlled models found in such countries as Austria, the Netherlands and Sweden to the largely private model existing in the United States (Dale and McLaughlin 1999). There has been a strong movement to privatisation of government services in recent years as governments strive to become more efficient in delivering service while coping with deficits and debts in the face of rising opposition to increased taxes. Delivery of land information services has been no exception. The fundamental assumptions behind this trend to privatisation are that: competition between private sector firms can lead to efficiencies in cost and timeliness; the private sector has greater access to financing for capital investment; and the private sector is better able to respond to rapid change in technologies and customer demands. However, privatisation is not without risks associated with quality assurance, cultural conflict between the public and private sector personnel, stability of the private sector firms, accountability, and security (Nichols et al 1998). To achieve the efficiencies and manage the risks associated with privatisation, outsourcing to the private sector has led to partnerships where responsibilities are clearly delineated. However, the balance between the public sector and the private sector is very much a function of: political history and culture; existence of relevant agencies, institutions and professional bodies; availability of appropriate technologies; the existence of a healthy land market; and the strength and capabilities of the private sector Business Approach Along with the move to privatisation and increasing public/private partnerships is the move by government to create more self-sufficient units with revenue generating capabilities. To address this pressure, land administration units have moved, or been moved, towards one of three broad models (Dale and McLaughlin 1999). Reformed State Agencies. These are agencies or departments that remain within government structures but are assigned accountability and responsibility for meeting revenue and expenditure targets. Government Corporations. While these remain as government entities they have considerable independence and operate with their own Board of Directors and must be self-sufficient. They answer to government as the principal shareholder. Private Utilities. These operate as a private business, but often as a monopoly under government regulatory control in the sense of setting fee schedules. This structure is becoming less common with increasing deregulation and privatisation. A fundamental prerequisite for success is an active land market to create the climate for successful private sector activity. In addition, there needs to be a strong customer relations and marketing program to justify fees within a public service environment, and 82

86 an internal government relations program to generate support from both the political and bureaucratic levels. The New Brunswick example Background New Brunswick is a relatively small province of Canada that is largely dependent on natural resources for its economy. It is located on the Atlantic coast, encompasses about 73,000 km 2 divided into 500,000 parcels, and has a population of 760,000. Under the Canadian constitution, the provinces have control over natural resources. This gives the province authority over mapping and land registration. Since there is no municipal authority or funding in this area either, it has been relatively easy to develop provincial programs relating to land administration such as land registration, assessment and mapping. Historical Development Europeans settled the Province of New Brunswick in the early 1700s. Early settlers were granted large blocks of land along the rivers, since these were the main transportation routes. This resulted in a crazy quilt of settlement, and the registry system that developed was a grantor/grantee deeds registry system. By the 1960s it was extremely difficult to determine who owned what and where. This made land transfers extremely complex and difficult and hindered economic development. During the 1950s and 60s a number of initiatives were undertaken to improve the management of land information. These included coordinated surveys programs, land registration reform, and the introduction of automated property valuation systems (Finley et al 1998). In 1966 it was proposed to initiate a Land Information System in four phases: develop a provincial survey control network; initiate large-scale province-wide mapping; replace the deed registry system with a parcel-based land title system; and create a comprehensive data bank of land related information. While the first two phases went ahead successfully, a number of constraints derailed the last two phases. These constraints included the lack of reward systems in government, lack of clear policy and focus, inadequate computing systems, differing standards and differing hardware and software systems among related departments, and insufficient funding (Coleman 1988, Finley et al 1998). In 1989 a Land Information Policy was instituted that provided clear direction and guidelines for the collection, storage retrieval, dissemination and use of land information (Finley et al 1998). As part of the policy implementation the New Brunswick Geographic Information Corporation (NBGIC) was created to consolidate and amalgamate the functions of land registration, property assessment, and mapping. The responsibilities of NBGIC included: operation of the real and personal property system; assessment of all real property for tax purposes; 83

87 maintenance of the surveying and mapping systems; and provision of land and geographic information services to the public. By 1996 this had evolved into the Real Property Information Internet Service (RPIIS), one of the first commercially available, on-line land registry systems in the world. The RPIIS supports viewing and browsing parcel-based information. The components of this system include: a Property Assessment and Taxation Database; a Parcel Index Database, which provides ownership information on 500,000 parcels; and a Property Map Database containing digital maps of the parcels. Finally, by January 1997, the Land Gazette, an integrated database of additional landbased information, had augmented the RPIIS. Currently this database contains three datasets provided by the Department of Environment: location of underground petroleum storage tanks; location of current and former dump or landfill sites; and setbacks from municipal water systems (Ogilvie nd). It is planned to expand this database with other datasets as they become available such as areas of archaeological significance, municipal watersheds and coastal zone protection. Organizational development The organizational development of the New Brunswick Land Administration system has taken account of the main issues described above: integration, outsourcing and partnerships, and a business approach. Integration This was achieved under the Land Information Policy of 1989 when the New Brunswick Geographic Information Corporation was created as a Crown Corporation with responsibility for the functions of land registration, property assessment, and mapping. As a Crown Corporation, NBGIC was structured as private business with a Board of Directors, President, Vice-Presidents and Divisions, and expected to generate sufficient revenue to be self-sufficient. Revenues remained at the disposal of the corporation rather than being returned to general revenue. In one stroke, therefore, all the functions of land administration that had been distributed among a number of government departments were consolidated and integrated within a single entity. However, individual Departments are still responsible for maintaining their datasets and databases. An important issue here is building and maintaining positive relations with the contributing Departments. This requires continual exchange and dialogue amongst interdepartmental committees, Deputy Minister ratification of annual mapping plans, task groups for special mapping projects such as coastal zone mapping and geo-referencing, and maintenance of the digital topographic files from Transportation, Natural Resources and Municipalities. Property assessment and taxation, the parcel index database, and the property map database flow from SNB, while the other datasets in the Land Gazette component flow from other responsible departments. In this system there is a single entry approval process to ensure security and quality (Figure 1). 84

88 Figure 1: Structure of the RPIIS and Land Gazette showing information flows. Business Approach and Financing As pointed out above, NBGIC or Service New Brunswick (SNB) as it is now known, was structured as a self-sufficient Crown Corporation responsible for its own financing. Thus over the period from the 1960s to the 1990s, funding moved from a tax-based departmental budget to an independent fee-for-service budget (Figure 2). The corporation, therefore, had to decide how much to charge for each service in order to generate enough revenue to sustain its operations, including research and development. Fees had to cover cost of development, use of server and networks, lost revenues from browser available information, and maintenance and expansion of operations. Other questions involved how much to charge for different products in different formats, and how to set up appropriate accounting and billing systems. 85

89 Mapping Departmental Budget Fee for Service Geodetic Survey Departmental Budget Agency Budget Fee for Service Cadastre Unfunded Land Register Departmental Budget Selfsufficient Valuation Departmental Budget Fee for Service Figure 2. Evolution of revenue generation and funding 86

90 The difficulty of pricing government products and services led to the development of a pricing policy with a number of principles that assigned different formulas to different types of products (Table 1). Table 1. A summary of the pricing approach Products and services Pricing approach 1. Statutory products and services Legislated prices 2. Existing infrastructure Incremental cost recovery 3. Future infrastructure Partial cost recovery 4. Standard cadastral products Market value pricing 5. Retail products Market value pricing The summarised income statement shows that revenues and expenditures are closely in balance (Table 2). This demonstrates that where there is a strong land market, a vibrant private sector, and the necessary organizational infrastructure, it is possible to operate an advanced and self-sufficient land information system. Table 2: Current revenues and expenditures ($ million) Revenues Expenses Provincial 24.8 Assessment 12.4 Municipal 5.8 Real property 8.0 Other clients 8.7 Personal property 1.8 Other 0.5 Land infrastructure 2.4 Service delivery 15.7 Total Revenues 39.8 Total Expenses 40.3 Outsourcing and Partnerships Throughout the 1970s and 80s the government and the University of New Brunswick (in the form of members of the Department of Geodesy and Geomatics Engineering) had 87

91 been developing the concept and components of the evolving land administration system. At the same time, the private sector in the form of Universal Systems Limited (USL) had been developing the Geographic Information Systems software known as CARIS. In 1994 USL and the Geodesy and Geomatics Group at UNB, with input from NBGIC, cooperated in developing a wide-area, network-based enhancements to the CARIS GIS software, which led to the CARIS Internet Server. The decision was then made to integrate this product with Web technology and standards for use with multi-platform browsers such as Netscape and Microsoft Internet Explorer. (Hurley nd; Ogilvie nd). In 1996 the partnership between NBGIC and USL was formalised in a contract to develop an internet-based, on-line access to the land information system, which resulted in the Real Property Information Internet Service (RPIIS). This Web service is managed by USL on behalf of NBGIC. In 1997 NBGIC was folded into a newly created Crown Corporation with wider responsibilities called Service New Brunswick (SNB). At the same time, but independently, the interdisciplinary Centre for Property Studies (CPS) was established at UNB. While the core partnership involves SNB and USL, the CPS and a number of private and professional organizations contribute to the partnership. Experience has shown that developing relationships with the private sector in public/private partnerships involves reciprocal benefits. The public sector can concentrate on developing policy and direction while the private sector can handle all aspects of land information including project management, quality control, specification development, and testing. The net result is that the public sector develops a self-sufficient public service, and the private sector develops marketable skills and capabilities. A number of lessons for ensuring productive and manageable outcomes have been learned from the partnership experience. These include: adhere to a project structure with a system owner and a project director; contain the scope of the project and break it up into manageable modules; ensure that contracts do not exceed one year; keep communication open with all suppliers; and keep communications open between in-house units Current and future developments SNB, in close cooperation with USL, other private sector organizations and academia, including the Centre for Property Studies is embarked on development of an advancement of the current system called PLANET. This is a comprehensive, integrated, on-line source of land registration, assessment, mapping, and information services, allowing citizens to conduct land-based transactions more quickly, cheaply, efficiently, and with better information than any other jurisdiction in the world. It is planned for PLANET to have six releases: 1) electronic registration index completed; 2) registration index on-line completed; 3) upgrade of property mapping tools; 4) integration of RPIIS and Parcel Identification (PID) databank; 88

92 5) electronic land titles system; and 6) imaging and integration of corporate financial system. With the PID-based registry in land titles the size of documentation will be drastically reduced, and the opportunity is created for the introduction of electronic registrations. The new electronic process will permit lawyers to access the title information on-line and effect a parcel transfer through an electronic interface that will automatically index and register the submission. The application will contain a certificate of title from the lawyer, and the SNB back office activity will be reduced. Under an agreement with the Law Society, the applying lawyer retains liability for a set period of time and SNB retains its role of front line liability. At the end of a set time period, full liability will again reside with SNB. In summary, the new process has multiple triggers for application to accelerate the process. It is front office driven with the cooperation of the Law Society, back office activity will be minimised, and titling will have shared liability between SNB and the Law Society. The major issues to be dealt with include privacy, improved access to the system, and integration with electronic commerce. Conclusions A number of conclusions can be drawn from the New Brunswick experience to date; keeping in mind that these may not be applicable to other jurisdictions with different histories, cultures or political systems. The development of the system must be focused on serving the citizen customer, not simply on developing a government program. It is important to consolidate all primary land-related units into one organization, and this organization should function in as business-like a manner as possible. The more work that is allocated to the private sector the better, but the relationship with the private sector needs to evolve in terms of trust and cultural understanding, and be tightly controlled. There is money to be made in land information sufficient to cover the costs of operation and development of a land information system, but the real value-added work should be left to the private sector. Finally, it has been demonstrated that an efficient and cost effective land information system can be developed in which information can serve as both an electronically traded commodity, and as the foundation for citizen involvement in development of land policies. References Coleman, D.A Implementing a land information network in New Brunswick. Unpublished MSc.E thesis. Department of Surveying Engineering, University of New Brunswick, Fredericton, N.B., Canada. Dale, Peter and John McLaughlin Land Administration. Oxford University Press, Oxford. (Accepted for publication) 89

93 Dowson, Sir E., and V.L.O. Sheppard Land Registration. Her Majesty s Stationary Office, Publication No. 13, London. Finley, David. B., Bernard Arseneau, J.D. McLaughlin, and D. J. Coleman The provincial land information infrastructure for New Brunswick: from early visions to design to reality. Geomatica 52(2): Hurley, Mavis. nd. Providing Internet access to real property information: results, issues, and opportunities. Service New Brunswick, Fredericton, N.B., Canada. McLaughlin, John, and David Palmer Land registration and development. ITC Journal, October Nichols, Sue Public/private partnerships in New Brunswick, Canada: slowly getting it right. Proc. Bertinoro II Workshop on Private and Public Sector Partnerships. Bertinoro, Italy. Nichols, Sue, Jim Riddell, and Paolo Toselli Land reform and administration with public/private partnerships: lessons learned from the Black Sea region. Proc. Bertinoro II Workshop on Private and Public Sector Partnerships. Bertinoro, Italy. Ogilvie, Mary. nd. Keeping topographic data current. Service New Brunswick, Fredericton, N.B., Canada. Ogilvie, Mary. nd. Automated systems as a tool in providing security of tenure. Service New Brunswick, Fredericton, N.B., Canada. United Nations Economic Commission for Europe (UNECE) Government Direct A Prospectus for the Economic Delivery of Government Services. The Stationary Office, London. World Bank From crisis to sustainable growth. Report on Sub-Saharan Africa. World Bank, Washington, DC. 90

94 5.3 Development of information models to evaluate, measure, and manage risk impacts of Government policies on agriculture (Canada) Bob Whitelaw Abstract The study considered public policy impacts on agriculture, and provided an analysis of the risks created through multiple layers of legislative and regulatory decisions. Evaluation work was at four levels of government: international, federal, provincial, and municipal, as well as community interests. Research showed an absence of analysis, measurements, documentation, studies and findings about how government decisions influence farming, and the associated costs inside the farm gate. Preliminary analysis of four Canadian provinces, and survey work in the other provinces and territories, showed Canadian farmers are working with an increasing number of government acts, regulations, and administrative rules from both domestic and international governments, and trade and commodity stakeholders. The results are conflicting, overlapping, and duplicated public policy. The analysis showed there are added costs of food production in a society that expects food to be safe, of high quality, readily available, and inexpensive. Costs due to legislation are largely absorbed by the producers with limited opportunity to pass on those costs to the consumer. Introduction This paper provides findings about how to identify, measure, and manage risks associated with government policy impacts on agriculture and related land use and environmental issues. Although our recent risk management study considered national and international agricultural issues from a Canadian viewpoint, many themes were identified that have universal impacts and represent the opportunity to share information among agricultural interests. Key to the work is the absence of information management models to determine the direct and indirect cost impacts of government legislation, and regulations, on agriculture in general, food production specifically, and the environment globally. This study reported on the outcomes of public policy research conducted on a risk management assessment of government impacts on agriculture. From all current research and available information, this study is seen as the first comprehensive review of the relevant impacts of government inside the farm gate in Canada. Included in the examination were influences of communities and local, provincial/state, federal and international governments through agreements, legislation, regulations, bylaws and common agricultural practices. The purpose of the study was: To examine public policy impacts related to agriculture To analyze the risks on the farm created through multi layers of decision making To make recommendations and provide action plans 91

95 The absence of public policy risk management information prompted this study, as no previous benchmarks or measurements were available to serve as positive or negative indicators of change. The goal of the project was to encourage discussions, provide findings, make recommendations, and prepare forward-looking policies on a continuum of near (local) and far-reaching (global) issues. Background The catalyst for this project was our 1998 study for the British Columbia (Canada) Ministry of Agriculture and Food. For this we examined the direct and indirect local government costs of operating or starting a farm, including taxation, regulations, bylaws, fees and permit charges. Six rural/urban municipalities (local government districts) and six commodities were examined. This study concluded that local government costs were only a small part of the overall influence of governments on day-to-day farming. Canada has a diversity of federal, provincial, territorial and local governments, each with a broad spectrum of domestic and international policy issues. The national study that followed the 1998 micro investigation provided a number of challenges, both in size and scope, to examine the complexities of governments and their impacts on agriculture. A context model was developed to show the wide-range of government influences on farming. The first layers are the domestic levels within national borders, the second layers are the international influences, and the final layer is seen as the emergence of the right to farm or standard farm practices. These layers were combined to show the overall impact of governments and provide a common reference point. (See Figure 1.) 92

96 NAFTA International Federal International Trade Agreements Asia Province or State Local European Union Agencies, Boards & Commissions Community Oceans, Lakes & Streams Mexico WTO Health & Safety Farm Taxation USA ³5LJKWÃWRÃ)DUP Environment Employment South America Washington, D.C. GATT MAI ISO 9000/14000 Source: Whitelaw Consulting and Research Inc., Victoria, BC Canada Note: right to farm refers to standard farm practices legislation Figure 1: Risk Impacts Context Chart Approach The study provided a qualitative public policy analysis rather than a quantitative economic analysis. An economic analysis would be another step. The study team asked the following questions: 1. What domestic and international agreements, laws, regulations, policies, administrative and communication practices associated with Canadian farm operations ARE WORKING WELL? 2. What are the WEAK LINKS and unclear practices in the different levels of government? 3. What are the EMERGING issues that present risks to farmers and farm operations? Use of these three leading questions helped to identify concerns and issues without embarking on dozens of time-consuming questions that could point the respondent in a particular direction. Moreover, these questions set a positive tone and put people at ease. This approach, from our experience, generated an open discussion and resulted in more constructive responses. However, as researchers we needed to have clear points of reference and constantly remain on track. Specific questions that we needed to raise as part of our research were: 93

97 How do environmental regulations impact on land designated as productive agricultural land? How do environmental regulations and associated costs impact on farm businesses? What and how much is the risk element factor to the farmer when dealing with environmental regulations and multiple levels of government? Where are the points of overlap and/or conflict in the various levels of environmental regulations and at what cost? To what extent is agriculture facing increased environmental regulatory costs and risk today, and how different are the findings from five years ago? Emerging Issues Samples of the emerging issues, identified from the early work on this study: Global standards and information-based measurement approaches Standard farm practices legislation ( Right to Farm ) Preservation versus production on the land Subsidies versus self-reliance Training, education and awareness Change, diversity and innovation Fragmentation of farm associations, councils and interest groups National and regional agriculture policies A shift from reactive to pro-active thinking Food safety and quality Human resources and occupational health and safety standards Effective communication and information sharing Legislation, regulations, and administrative red-tape International trade issues Combined with global and national policies are farm operational issues. Examples are: access to water, management of wetlands, wildlife habitats urban nuisance factors of odour, noise, dust and light nutrient management programs (manure) Measurements The study team developed a quadrant to categorise the risk impact of anticipated government changes in agriculture, through legislation, regulations, and trade agreements. Use of the quadrant model helps to identify the resources required to manage the risk. The model received strong support by both producers and government staff as a way to classify issues for further analysis and to indicate the relevant risks and their importance. (See Figure 2.) 94

98 Economic & Sustainable Mature & Consistent FARMING Dominant & Emerging Competition & Uncertainty Source: Whitelaw Consulting and Research Inc., Victoria, BC Canada. Figure 2: Quadrant Chart Additional measurement models were developed or are in design stages. One involves the idea of measuring the cumulative or incremental impact of public policy land use decisions on farms. We identified the need for a simple visual image to display the many ways in which productive land is removed from agricultural use. This chart was designed to encourage discussion. The next stage would be to apply quantitative measurements. The demonstration model has received favourable comment, particularly with the suggested ratios between agricultural land and the suggested impacts (identified as segments on this chart). (See Figure 3.) 95

99 Figure 3: Controls on Productive Land Another model is being developed for testing to assess four critical segments of public policy impacts on farm management for the 21 st century. The idea is to provide comparative measurements of change to include numbers of farms, available agricultural land in acres, productivity, and return on equity/investment. The model shows the actual number of farm units by province in Canada for the years 1956, 1976, and Statistics Canada provided the data source. Additional lines are for discussion purposes only, and represent the available land, productivity and return on investment. (See Figure 4.) 96

100 Figure 4: Trend lines We are also working on the design of a three-dimensional measurement model to consider direct and indirect dollar costs, sustainability and governance issues involving the costs of environmental legislation and regulations on agriculture. The context or framework of the model will be scientifically based. Environmental Measurement Project Approach and Methodology An identified weakness is the absence of a model to test the economic impacts of environmental regulations on agriculture. There is a need to develop, test and apply models to evaluate and measure the economic impact of regulations on agriculture in ways that are: easy to understand without interpretation directed toward public and private sector goals and objectives cost effective designed for ease of compliance A practical first step is to test existing regulations that involve a number of economic influences, both quantitative and qualitative, and where both scientific and community approaches require study. Among the leading issues for evaluation of the initial test models are regulations involving air quality, watercourse management, soil conditions and wildlife habitats. The following four areas are recommended as a test base. 97

101 (1) Existing Regulation Test #1 - AIR Aerial spraying (a suggested theme) Pesticide Control Act/Health Act (2) Existing Regulation Test #2 - WATER Drainage of excess water (a suggested theme) Fish Protection Act/Water Act/Drainage, Ditch and Dyke Act (3) Existing Regulation Test # 3 - SOIL Nutrient Management- (a suggested theme) Waste Management Act/Health Act (4) Existing Regulation Test # 4 - WILDLIFE Wildlife and wetland protection (a suggested theme) Wildlife Act/Migratory Birds Convention The objective is to examine emerging areas beyond the traditional direct cost impacts of a two-dimensional or flat matrix model. Models must be multi-dimensional and have many facets to provide both comprehensive understanding and practical application. For example, we developed a number of innovative approaches as frameworks for policy and regulatory evaluations along with cost-impacts. These bench-marking approaches have direct application to establishing a framework and then developing working models. Included are a series of multi-dimensional models to assist with qualitative and quantitative measurements and analysis. A model that we would propose using is the octagon, which provides an assessment of governance impacts and influences. Another suggestion is a framework of concentric circles, which can be modified to test changes in impacts of environmental regulations on the agriculture chain from what is often termed gate to plate. The models are designed to consider a variety of measurements within and outside the traditional economic areas. There are a number of additional areas of impact including: public policy and administrative law requirements global standards of ISO 9000 (quality measurements), ISO (environmental controls and compliance requirements), and HACCP (hazard analysis of critical control points) awareness of domestic and international cross-boundary ecozones strategic, regional, and operational requirements direct and indirect costs multi-layers of government in terms of international, federal, provincial, municipal, and community measurements that incorporate both scientific analysis of the cost impact of the regulation and the emotional/human reactions international and domestic trade agreements and growing use of Technical Barriers to Trade (TBT s) 98

102 Findings and Conclusions The study made 31 recommendations that were put into 10 categories. These categories reflect consistent, and I would suggest universal, themes found through the personal meetings and survey work conducted as part of the research. They are: Awareness of agriculture as a business and industry Training and education Government regulations, bylaws and red tape Financial support programs Multi-year agricultural program funding Boundary and jurisdictional concerns Trade agreements and international standards Communication initiatives Pro-active policy development 21 st century farming The study found that farmers are working with an increasing number of legislative acts, regulations, and administrative rules from both domestic and international governments, and trade and commodity stakeholders. The results are increased costs of food production in a society that expects food to be safe, of high quality, readily available, and inexpensive. Today, due to government policy decisions, legislation and administrative regulations these additional costs are largely absorbed by the producer with limited opportunity to pass on those costs to the consumer. The analysis showed that agriculture and food production on the farm is a fragile industry, certainly in Canada, and based on our international review work, I would suggest also throughout Europe. We started the project with the Context Chart of Risk Impacts on Farming to show the areas of government influence. The results of the study showed the need to rearrange the rings into a series of concentric circles with overlapping and encroaching impacts on a farm operation. The model was developed to highlight the principal finding that local and international impacts have a significant influence inside the farm gate. The chart shows the importance of national responses to international needs, and the requirements of state/provincial governments to deal with the increasing number of local government issues that impact on farm operations. (See Figure 5.) 99

103 Federal State/ Provincial International )DUP Community Local Source: Whitelaw Consulting and Research Inc., Victoria, BC Canada Figure 5: Government Influences 100

104 5.4 System management in land tenure: Experiences in land registration and property management in Eastern Germany after reunification (Germany) Gernold Schindler Introduction One has to consider the land tenure situation that existed in the autumn of 1989 and summer of 1990 to fully understand the complexity of achieving a radical change in the real estate cadastre and the registration of property in the former GDR. Aspects of the existing situation are the following: 60% of the land was privately owned. This was especially true for agricultural areas and for land with single or two-family houses. Therefore the proportion of private property, especially in the rural areas, was considerably high. A high proportion of the land was under state ownership. However, often this land was handed over to firms, community housings or private persons etc. for particular uses. Quite often parcels were with buildings. This situation meant that, whereas the land was under state ownership, the buildings on it were instead owned by state companies and real property agencies or were under private ownership. This resulted in many situations where land and buildings on it had different owners, although both should represent an inseparable unit. Such situations resulted in many disputes. The existing land cadastre served to prove the location and size of land parcels, but between 1945 and 1989 it was applied somewhat carelessly. It was often inexact, full of contradictions and, particularly with respect to buildings, incomplete. Subsequently the planning bases, especially important for the development of infrastructures, were non-existent or very deficient in respect to precise and comprehensive information. The land parcels were registered for evidence of land ownership and the use of the land for financial security. As only a very limited real estate market existed, people gave little consideration to the registration of new ownership, e.g. through inheritance or gifts. Even today, 10 years after the reunification, we have situations where the registered owners are deceased and a large number of heirs appear. In case of land conflicts, the rightful owners have to be identified. This often requires an extensive investigation work. Since 1990, in Eastern Germany there has been a great and urgent need for new transport routes (motorways, railway lines), modern flats, private single family houses and modern shops (supermarkets, shopping centres). Related problem issues include: With these great demands a vast building boom developed, beginning with the 90 s and continuing to 1997, creating many construction works. The consequent demand for general surveying and cadastral surveying services could not be satisfied. Surveys were delayed for up to 2 years. A great demand for training of specialists in the field of cadastral surveying and property register arose. 101

105 Many old owners made ownership claims (restitution claims) for state owned land parcels. East Germans who had moved to the West either legally or illegally lost their rights to their parcels, which were automatically taken over by the state. Since one of the decisions resulting from the reunification was that the original owners should get back their rights to their former lands, the authorities were overwhelmed with claims, claims which had to be resolved on a legal basis. No functioning land market existed. Private owners did not sell since they did not know the value of their land and also because they were waiting for an increase in land value. Municipal lands could not yet be disposed of since it was not clear who had legal title rights. Subsequently an over-priced land market developed where parcels were sold at excessive prices. No precedent existed in all the world from which to draw useful information for transformation from a planned to a free market economy. There was no practical example of this in the whole world. This situation had to be addressed for the first time. Although in general laws and regulations of West Germany could be applied to East Germany, however they could not be completely valid because of the different starting conditions in the East. It was thus necessary to develop laws to accompany the transition from a planned economy and related social circumstances to a market economy. The special starting situation in the former GDR necessitated requirements for transformation of the property rights system. Requirements for the safeguarding of land ownership consequent to reunification In the Federal Republic of Germany some laws are formulated and agreed at the federal level and others at the state level. Legal regulations had to be created concerning the following points: to whom should municipal land be given; how could investments for the creation of employment be accelerated; how could building and land ownership be merged; reorganisation of the land cadastre as well as the land registers. Pertinent laws were prepared and passed at federal level, meaning that the regulations are also valid for all of the former GDR. The capacity of the existing land ownership cadastre structures had to be greatly strengthened through: training of new personnel; introduction of automatic (computer) technology; development of modern ownership regulations. 102

106 These requirements were however solved at the state level. Indeed, partnerships were established between the old (West German) states and the new (East German) states. As a result we find today in the individual states many legal regulations which do not or only remotely differ from the respective regulations existing in the partner countries. The land ownership departments had to be modernised and made efficient. Many restitution claims remained to be dealt with. Because of the general fact that the former owners and current owners do not voluntarily agree, many court proceedings were required to clarify these claims. Measures for land management reorganization Basic land management transition laws and regulations Five fundamental transition laws have been enacted. In addition there are several other laws and regulations as well as improvements of these laws. However, regulatory gaps and deficiencies were still detected during the transition process. most of which could be remedied through completion and adjustment actions. The 5 major laws are: Treuhandgesetz - Trusts' law (1990). This law was passed by the former GDR government on 17 June 1990, two weeks before the re-unification of Germany. The crucial content of this law is that all the GDR state property will be transferred to a company which is 100% state owned. This company should then privatise individual parts of the state property to reduce the enterprising activities of the current government. At the same time state owned land would be transferred to private ownership for investment and agricultural use. Landwirtschaftsanpassungsgesetz Agricultural adjustment law (1991). This law was designed for transformation of the former Cooperative farms. It regulated the process on how the Cooperative farms were to be transferred to private companies. The main problem was always the ascertainment of the property and the passing of parts of the property to the owners. This includes the inventory, buildings, machinery, livestock as well as the land. There are cases where the land and the buildings erected thereon belonged to different owners. Legal proceedings were developed within the provisions of the agricultural adjustment law in which the parties must agree on a voluntary basis through the exchange of lots or through financial balancing. As a result in some instances the land property and building property could be reunited. Investitionsvorranggesetz Investment priority law (1992). Especially during the first months following reunification, many necessary investment activities could not be carried out because of the lack of land. Important investments were blocked through the disagreement about property claims. Thus this Investment Priority Law (1992) was passed. The main idea of this law was that an investor could develop the land even if claims should arise. Further investments were also permitted even if at future court proceedings the land should be adjudged to the former owner. The former landowner should receive financial compensation. 103

107 Bodensonderungsgesetz - Special land law (1993). Another problem at the beginning of the 90's was the insufficient operational potential of surveying, especially short-term cadastral surveying. This concerned especially those areas where buildings had been erected with no consideration for the actual land boundaries. Enactment of this 1993 law was intended to correct this situation. It made it possible to build on land parcels on the basis of maps without local surveying. This led to an acceleration of the building process and to the solution of many conflicts. In addition it was mandated that in further changes of the land parcels, for instance parcel subdivision, heritage or sale, local surveying was obligatory. Sachenrechtsbereinigungsgesetz Property rights settlement law (1994). Another problem emerged in the beginning of the 90 s. It was necessary to decide who should take over the former state owned land. With the enactment of this law, the stateowned land could be transferred to private ownership, cooperatives, companies or communes or other public municipal institutions, respectively. The land ownership cadastre Regarding land ownership cadastre there is no federal-wide standardised approach. Surveying is done under the jurisdiction of the different states. Thus, the land cadastre differs in body and structure across Germany. But in general the land cadastres in the different states follow the same principles: Creation of state (land) surveying departments and subordinate government surveying departments. For the setting-up of the federal land registry it was possible to use the structures from the former GDR real estate offices. Admittance of private small and medium-sized surveying firms to work on the land cadastre. During the setting-up of small and medium-sized surveying offices there was considerable help from surveying offices from the old countries in former West Germany. The professional organizations arranged know-how transfer and financial support. Provide measures for the specific training of new specialists (surveying technicians and engineers) in order to meet the high demands. Especially the training of additional surveyors was organized by private companies through the retraining of unemployed engineers and technicians from other technical sectors. These measures were financially supported by the government as measures against unemployment. Extensive investment for the general introduction of automated surveying and property valuation technology. The investments for automated surveying and property evaluation systems were made for the private sector offices as well as for the federal government cadastral offices. A high degree of technology was achieved in a very short time. 104

108 Creation of a comprehensive framework for a standardised state-wide realisation of cadastral work. The partnership of the old and new federal states could facilitate undelayed development of the necessary laws and regulations. This partnership between the new and the old federal countries was very essential for the creation of a legal framework in such a short period of time. Updating of the land register In the 40 years of existence of the GDR, land registers existed and were constantly updated and fulfilled their functions. However, there was lack of respect for the property register because the value of land was only symbolic (very low). Consequently, owner changes due to heritage or donation were sometimes not registered. Projects were carried out to inform the population about the role of the land register so that the owners could help bring the register up to date. In this matter the media offered a strong support. Many programs and articles of the daily press contained notices on the necessity of property registration so that in most of the cases the overdue registrations were readily carried out. When building and land ownership were not identical, the matters were dealt with step by step. Such land conflicts were solved using different methods: possibility of voluntary unification of building and land, ( Landwirtschaftsanpassungsgesetz (Agricultural adjustment law), and other methods as well in which the merging of land and buildings was compulsory. Often these methods are very complex and difficult and may take many years: both sides often protest and judicial action is required for a final solution. Automated processes have been developed and put in place to legally secure the archiving of land register documents as well as to speed up the processing of registration applications or enquiries. Besides improving the contents of the ownership data, the technology for processing the ownership registration has also advanced. The states choose different paths; different methods are tried within the individual German states and an extensive potential wealth of experience for different solutions is acquired. In Germany land register and land ownership cadastre are separate. Because the same details about the landowners are found in both registers, using an on-line link any changes made to the land register can also be made automatically to the cadastre in a few seconds. This has already been used for several years in Saxony. Redistribution of land ownership The three principal reasons for land ownership redistribution are: Farmers starting up their own businesses were to receive, in exchange for their own land parcels, land parcels of equal value and size. In this respect, it was particularly important to evaluate soil quality. When only lower quality land could be offered, the value gap had to be bridged with the supply of larger parcels. 105

109 Land was redistributed as necessary to increase the effectiveness of agricultural production. This redistribution was effected through a land redistribution process ( Flurbereinigungsverfahren ) which often requires several years. In many cases through the exchange process it was possible to achieve merged ownership of the land and the agricultural buildings sited on it. The ideal case of voluntary land exchange often does not materialize. This occurs when the owner of the building has no land to offer in exchange. In this case the land value is determined (through a standardized procedure) and the owner of the building must pay to the landowner the amount of money corresponding to the determined value. Results after almost 10 years of unity in the new German States After almost 10 years of unity a positive situation exists in Germany. The land and real estate market is flourishing. The extensive supply means that land prices have fallen to realistic values. Private licensed surveying companies are capable of carrying out the required cadastral surveys in short periods of time. However, in the state surveying departments the time required for transfer of data to land ownership cadastral documents is still too long. The greater part of separate building and land ownership cases has been solved. This allows owners of buildings to obtain mortgages and thus undertake essential investments. The quality of the land ownership cadastre has improved with every cadastral survey carried out under current standards. The land ownership cadastre thus forms the basis for several information systems. The land ownership cadastre, complete with land parcel boundaries, land parcel numbers and the buildings as its most important components, also forms the basis for many specialist information systems. Our society is increasingly developing into an information society: many specialist information systems are being developed, i.e. regarding electricity, sewage, drinking water distribution, telephone cables etc. It is always important to know the ownership of the land on which such infrastructures are located. Thus it is obvious that the land ownership cadastre is always a vitally important source of information for many specialist information systems. Conclusions Some conclusions can be drawn regarding the land ownership cadastre and land register reorganization in East Germany in the last ten years following the conclusion of the transition from a centrally planned economy to a free market economy. The basic statements of these conclusions are of great value for the eastern and southern European countries which are also undergoing a similar transformation process. 106

110 Laws to solve possession and property problems must be created rapidly. Transitional laws, which are in place only for a short time, can be acceptable. The step by step improvement of laws is also possible. Many new specialists will have to be trained for the land ownership cadastre and land registration departments. The personnel should receive further training and qualification. The need for these specialists is greater in a market economy than in a planned economy. This is because there is increased demand for surveying work for the continuous land dealings. Small and medium-sized private surveying companies, licensed for cadastral surveying, are very well suited for cadastral work in their local area. It can be clearly proven that private surveying companies can carry out the increased surveying work with flexibility and effectiveness. These small businesses can also adapt rapidly to changing market conditions. In general, for work such as the administration of cadastral documents, people consider the state cadastral authorities more appropriate than privately licensed surveying engineers. The private surveying engineers need a strong professional organisation that can protect their area of work from others lacking appropriate land tenure experience (e.g. architects, building engineers or information specialists). Indeed, such a strong organization is also needed to pursue their political interests regarding the state cadastral authorities and the evolving development of their profession. Clear regulations are necessary to form a basis for the cooperation between private companies and public authorities in cadastral work. Only with regulations which clarify respective responsibilities will private offices and federal cadastral offices be able to cooperate effectively. Surveying offices can acquire work from different regions. This ensures that fair competition exists between the various private offices, with resultant benefits for surveying offices customers as well as for contractors. It provides an incentive for private companies to continuously improve their services and prices. Automated systems should be employed in the administration of land registration documents: this allows the use of remote data searching systems only by authorized persons; furthermore, this should speed up the process. In Europe there are different opinions and regulations concerning data protection of entries in the registry, that is, whether the registers should be open to the public or not. At any rate, only authorised users can retrieve data from the registers and such data-related interest is to be proved. Notaries, licensed surveying offices, local authorities as well as potential buyers should belong to the group of authorised persons. 107

111 Land market transparency should be secured. It is very important that the land market is transparent. Only in this manner can a false development concerning land prices be prevented. In Germany the law prescribes that every change of land from one owner to another be accredited by a notary. The notaries are then obliged to transmit copy of the deed to a land valuation board. This land valuation board inspects all deeds and analyses the land prices and other statistics. Annually a price contour map is developed and published. This helps, through comparisons, to inform owners and potential buyers about the current land value. This value is not binding because the price can be negotiated by seller and buyer. Nevertheless it gives a representation of land values in the region. Another important rule in Germany is that the notaries must furnish a copy of the estate deed to the local community. The communes have priority in land transactions. This assures that the deed shows the correct price. If for instance the seller and buyer agree for an official low price in order to save on the real estate transfer tax, it would be possible for the communes to buy the property at that low price. This would be disastrous for the seller. It is also possible to fix a priority for the neighbour. Only such measures can ensure that correct prices are entered in the deeds. This guarantees correct taxation and balanced property prices. The transition from a planned to a market economy offered many learning experiences. In the land cadastre and land register field many experts were involved in finding solutions to these problems in Germany. These experiences and the laws and regulations developed in Germany for the transition process would be very valuable for the transition process in East European countries and in the countries of the former Soviet Union. Because of the full time needed to address problems within Germany during the transition, German experts have not been strongly represented in projects of international consultancy for other transition countries. However, there are a number of German experts and consulting offices in the field of land cadastre and land registration who are able to share their experience with partners of countries undergoing transition. The new German states have acquired valuable experience concerning the reorganization of the system for securing ownership and the settling of post-transition ownership issues. There are various new laws and regulations which could be of interest for the effective solution of problems in East European countries. We are interested and ready to work together through various forms of cooperation. It is definitely necessary that all western advisors work together in the interests of respective lands which are in the process of transformation and that they follow a standardised concept. 108

112 5.5 I.M.I.S.-The Integrated Municipal Information System (Italy) Pierluigi Potenza Background Municipalities (known as Communes in certain countries) are in general the smallest administrative units. Nevertheless, their role in public services is growing increasingly and extending far beyond their traditional duties such as service supply (i.e., sanitation, water supply, public lighting, sewer, road maintenance etc.) Nowadays municipalities are being charged with responsibilities which to some extent previously belonged to the central state administration. This is the case of the tax system: local taxes are growing increasingly while state taxes are decreasing as responsibilities are progressively transferred from the central state to the local administrations. This basic concept, which is of great importance in the policy of the European Union, is part of the so-called Federalism and will be increasingly developed in coming years in line with the political unity process. National states will give up a large part of their sovereignty in favour of the EU administration while local governments will assume greater importance. Figure 1: Decentralised taxation and administration In this framework, some administration tools that are typically state-owned will be transferred to local governments: one of the most important items of this process is the cadastre. The cadastre is, by common definition, the means by which public administrations can collect taxes over real estate and land. Now, since most of this tax 109