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Response from Swani

 

The comments in last week’s opinion column by the writer decrying land as a wasted economic resource had some pertinent points worth pondering over, but many of his assertions were based on incorrect information and assumptions and cannot go unchallenged from the point of view of the Native Land Trust Board (NLTB).

 

A litany of wrong assumptions and wrong conclusions

First, the writer asserts that the NLTB is lost in the political wilderness.

 

Granted, there have been weaknesses, but these have been addressed over the past years. Blaming the NLTB for successive governments’ non-compliance with their social responsibility is misdirected. Facilitating leases, maintaining them, and renewing them whenever deemed necessary are what the NLTB has been doing. That is the job it was statutorily set up to perform.

 

The writer then says the NLTB needs a vision and a mission.  No organisation worth its salt exists without these, so I will not dwell on that. He is welcome to visit the office and get a copy of the Strategic Plan 2008 – 2010.

 

He then adds that the NLTB needs a Land Use Section and a Research Section for Investment. These departments exist, spearheading the NLTB’s implementation of its development plans for the Lami/Nausori and Nadi/Lautoka corridors, and the enhancement of service delivery to landowning units and other stakeholders. The NLTB’s Landowners Affairs Department was recently set up to facilitate landowner investment and to help landowners realize the best way to utilize their land.

 

The writer says no leader has made any effort to find a resolution to the mass expiry of Agricultural Landlord and Tenant Act (ALTA) leases. The problem lies with ALTA itself since it has no renewal provision, which is why the NLTB has been proposing an umbrella legislation for native land under the Native Land Trust Act (NLTA). I will touch on that later.

 

He then touches on the once fertile fields in Saweni which he laments as now being Fiji’s largest squatter colony. The NLTB has a subdivision there known as Saweni Stage One. The proximate agricultural land has been occupied by squatters brought in by landowners. NLTB is undertaking a subdivision to formalize this and has also issued a development lease opposite this squatter settlement to address this situation.

 

The writer also proposes a head lease to the government - a noble idea but a mechanism in need of clear definition. It is not a new idea, having existed during the CSR days when the company held head leases it allotted to subtenants. Ideally it will be good for the NLTB in terms of receiving a lump cheque every year, which will ease the arrears burden, but it is a concept that needs more serious study.

 

 

A Balancing Act

The central problem for the NLTB has always been to ensure that Fijians have sufficient land for their support while not depriving potential tenants of opportunities for using native land productively.

 

Various viewpoints, along with those of the likes of the writer have labelled the role of the NLTB as intrusive control of native land, seeing this as de facto socialization and part expropriation of tribal land. However, prior to 1940 many landowners were reluctant to lease out their land. Landowners either delayed in doing so, or insisted on very onerous terms. Since 1940, though, total control by the NLTB in the management of customary land has meant little reluctance or delay in the granting of leases.

 

This has been of great advantage to the national economy, with leases being granted on uniform terms not too onerous for lessees. So, as much land as possible was made available for leasing or licensing.

 

It has to be said that although 87 per cent of land in Fiji is communally-owned by Fijians, most of this is of very poor quality, isolated and of minimum potential. Freehold land formerly held by Europeans is now held mainly by Indians, while around 90 per cent of crown leases are held by Indians.

 

As recently as December 2005, a Fijian Member of Parliament said he could foresee a time when leases would be given with perpetual renewals, subject only to the payment of an annual annuity, and determinable only under one condition - when the landowners would need it. 

 

However, he did not see that happening in the ongoing climate of distrust and suspicion. He said that if one were to look at legislation governing native land, one cannot help but see that the intention of such legislation was for native landowners to subsidize national development - rents as low as one could go, while allowing the users of native land to reap millions of dollars out of its use.

 

One would conclude, then, that these decisions were made on the assumption that landowners would continue to be ignorant, and live a subsistence life in perpetuity.   

 

ALTA v NLTA

ALTA has severely eroded the position of the landowner.

 

The provisions of ALTA compromise the NLTB’s ability to fulfill obligations under NLTA, which requires the Board to be trustee for the landowners.

 

It cannot do this when the legal power of many of the key provisions of NLTA are removed by the ALTA legislation. They have become subservient to it. Sections seven, eight, nine, 10 and 11, relating to such crucial matters as the alienation of land, leases and licenses, lease registration and Board consent are virtually emasculated.

 

Section 4 of NLTA clearly states that control of all native land is with the NLTB, but sections 59 and 4 and 5 of ALTA are in direct conflict with this.

 

As well, ALTA permits a tenancy to be declared out of an illegal occupancy without the consent of the landowner. This contradicts section 9 of NLTA which empowers the Board to issue leases only after proper determination of landowners’ needs.

 

ALTA leases offer a minimum of 30 years. Under NLTA the minimum is five years with a maximum of 99 years. The longer and legally enforceable minimum under ALTA effectively prevents the NLTB from fulfilling its duty under section 9 of NLTA.

 

As well, although rental under ALTA is fixed at six per cent of the Unimproved Capital Value (UCV), the reality is that the rental averages 1.6 percent of the UCV. A case can be made, therefore, that the returns to the Fijian landowners under ALTA are amongst the lowest anywhere in the world.

 

ALTA, then, has exploited landowners by denying them rents based on the true economic contribution of their land to agricultural production.

 

Tenants, by contrast, have done exceptionally well under ALTA, not only benefiting from low rents, but also managing to avoid paying any rent at all.

 

Indeed, in a good year, only 60% of the total rents contractually payable to the NLTB are actually paid by tenants.

 

The list goes on.

 

ALTA forbids payment of premiums, preventing landowners from negotiating additional commercial benefits.

 

NLTB is expected to pay outgoing tenants for improvements at the market value of those improvements.

 

Land degradation through bad husbandry continues unabated with ALTA.

 

ALTA even allows for assignment of leases, even though it may not be in favour of the landlord.

 

The power of ALTA is such that it is not even legally possible for legislation to be enacted which would bring ALTA leases automatically under the ambit of NLTA.

 

Thanks to this interim Government, landowners will, at least, get an extra $4 million in July.

 

Direction

At the very least, there should be a reform of ALTA. The issues faced by both lessor and lessee are too important to ignore.

 

The low rental payment and the issue of improvements to land require urgent attention, in particular.

 

They distort incentives, reduce investment and add to uncertainty.

 

Landowners want legislation which liberates them from the chains of ALTA, restores their rights, and gives them the freedom to consider different types of usage.

 

This freedom is cherished by property owners everywhere.

 

Fijians get it from NLTA, not ALTA.

 

Conclusion

It has to be remembered that the racial dimension to the land issue has become almost irrelevant. The issue of Fijian landlords pitted against Indian tenants, still being capitalized on by politicians waving the race card, is now a thing of the past as an increasing number of indigenous Fijians become tenants themselves. These Fijians have economic interests similar to their Indian counterparts, setting the tone for more rational long-term solutions to the problem.

 

The NLTB is committed to building a favourable image for the Board and to making native land appealing for prospective tenants, investors and developers.

 

Nevertheless, it remains true to Section 4(1) of the NLTA Cap 134 in administering native land for the benefit of the Fijian owners, and no amount of wringing of hands, stamping of feet or gnashing of teeth will deter the NLTB from this legal obligation.

 

True, the more native land that can leased out, the better it will be for Fiji.

 

But it cannot, and must not, be to the detriment of landowners.

 

 

A BALANCING ACT

 

  • by Alipate Doviverata Mataitini,

          Legal Officer/Public Relations, Native Land Trust Board

 

 

 

 

 
   
 
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