AIKS on the Land Acquisition (Amendment) Bill, 2007

(Land acquisition for non-agricultural development is inevitable in the course of economic growth and development. The real issues herein are about the fairness of the process, the purposes for which such acquisition is done, its democratic character,  its transparency and appropriate relief and rehabilitation measures for all affected by acquisition. The Government of India has come out with two draft bills in this regard. One is the Land Acquisition Amendment Bill (LAA Bill) and the other is the Rehabilitation and Resettlement Bill 2007 (R and R Bill). The AIKS has put forward a number of suggestions on both Bills to eliminate the anti-people provisions and strengthen pro-people aspects. Here we present the position of the AIKS on the Land Acquisition Amendment Bill. In the next post in the blog, we shall present AIKS’ position on the Rehabilitation and Resettlement Bill.)

Introduction

At the moment, the legal framework for land acquisition for public purpose is provided by the Land Acquisition Act, 1894 (LAA), last amended in 1984. The main purpose of the LAA under the British colonial administration was to acquire land in a quick, cheap and easy manner with little concern for adequate compensation and rehabilitation of landowners. Public purpose was essentially an administrative decision with opaque and authoritarian procedures with token avenues for appeal or objection. The 1984 amendments essentially did little more than bring Companies within the purview of the Act.

Over the years, judicial exposition has highlighted its numerous lacunae, as has the ground experience of its adverse impact on the livelihood of those giving up land and being displaced. The All India Kisan Sabha therefore believes that the Land Acquisition Act should be comprehensively amended to ensure that while pursuing genuine public interest, it is made more democratic, transparent and accountable, safeguarding the rights and interests of displaced persons and securing their livelihoods through improved and sustainable livelihood-generation and fair compensation. The Government’s proposed amendments to the LAA unfortunately, do not address several core deficiencies and anomalies, while introducing several amendments that are examples of the cure being worse than the disease.

While there are some positive features in the present Land Acquisition (Amendment) Bill, 2007 proposed by the Government, which needs to be further strengthened, there are some provisions, which are quite objectionable. These objectionable features include:

• Redefining public purpose to include all private companies and entities and force the privatization of public services.
• Allow un-scrutinized and un-monitored market-based land acquisition, thereby undermining the State and people’s right to interrogate public purpose
• Reduce the amount of the compensation awarded by linking it to stamp value, registrations, etc.
• In the name of fast-tracking, deny interested persons access to Courts by creating a separate Authority constituted by the Government itself with a clear merger of judicial and executive roles

The Government has also introduced the Rehabilitation and Resettlement Bill, 2007 (RRB). The RRB should essentially deal with the process and components of resettlement and rehabilitation when there is displacement while the LAA should identify persons affected adversely by the land acquisition and land use change and compensate them after due process of scrutiny, consultation and appeal.

PROBLEMS WITH THE LAA 1894 AND SUGGESTIONS ON LAA BILL 2007

1. Narrow And Restricted Definition Of ‘Persons Interested’ with a Top-Down Bureaucratic Procedure for their Identification

Problem: The definition of interested persons covers only landowning peasants and tenant farmers, excluding landless agricultural labourers, collectors/users of common property resources, artisans and others servicing the farmers’ needs – persons whose livelihoods depend on the land. Additionally, the Collector is the sole Authority to identify ‘interested persons’ and there is no procedure for filing claims verifiable by the Gram Sabha and the Collector. Furthermore, the LAA deals with the landed and tenants while the RRB deals with the compensation package for the landless and other service providers through two different definitions. Finally, ambiguity in the definition of interested parties has resulted in Courts putting those who pay compensation at par with those who receive it.

Suggestion: Definition of interested persons in the LAA Bill should include the non-landed and non-cultivating persons dependent on the land and local economy for livelihoods and common property. The Act must contain a procedure for filing of claims and application for self-identification as interested person to eliminate wrong exclusion. There should be a single inclusive definition of ‘interested persons’ (LAA) and ‘affected family’ (RRB). Moreover, the rights of Objections, Appeals, etc. should only apply to those receiving compensation, not those who are acquiring the land.

2.     Exclusion of Common Property Resources from Assets and Land

Problem: The present version of the Act only estimates and compensates private property. Large-scale acquisition covers entire villages and their common property resources - tanks, grazing lands and village forests. Common property resources play a major role in supporting the livelihood of the villagers, specially the poorer ones.

Suggestion:  The loss of access to these common property resources too must be listed and compensated. They should be included in the Notification, Declaration and Compensation.

3.     Definition and Scrutiny of Public Purpose provides Sole and Absolute Prerogative of Executive/Administration without Consideration of Extent of Displacement

Problem: The “public purpose” needs to be properly defined. If the definition of “public purpose” is to remain as a purely administrative/executive prerogative, which is not subject to democratic and judicial scrutiny, the basic problem arising from the present LAA will not be addressed. Furthermore, no attempt is made to scrutinize the Project as the least displacing option in order to fulfill the stated “public purpose”. Finally, land is often acquired in the guise of a more plausible purpose and then transferred to some other use. This has not been properly addressed.

Government’s Proposed Amendment Clause 3(f)(iii).:  The proposed definition of ‘public purpose’ is made limited to the requirements of land for (i) strategic purposes relating to naval, military and Air force works or other work vital to the State, (ii) Land for infrastructure projects (including mining) and (iii) to the extent of 30% for the companies where they have already procured 70 per cent for a vague and all-inclusive “any other purpose useful to the general public”.

Critique of Government’s Proposed Amendment: (1) This severely restricts the scope of the State to fulfill pro-poor public purpose since it can no longer acquire land for inter alia, the schemes for planned development of villages and towns or for providing housing for landless and poor or for carrying out any educational, housing or health or land distribution schemes, leaving these services to the private sector; (2) Denies the 70 per cent whose lands are bought in the ‘market’ their due legal rights to compensation under the LAA and relief under the RRB, since they are outside the definition of ‘interested persons’ in the former and ‘affected family’ in the latter (since it is treated as voluntary dispossession and/or displacement through ‘free’ market contract); (3)Allows a free play of market forces resulting in large scale and cheap land alienation and dispossession in a context of acute rural distress through deceitful and forced land purchases by private entities and real estate speculators; (4) Reduces the Government to a formal rubber stamp with the ‘public purpose’ becoming a fait accompli, with the Project and its purpose effectively outside government examination thus pre-empting any a priori scrutiny of the proposed project as the least displacing one or as contributing to ‘public purpose’; (5) All-inclusive and vague nature of “any purpose useful to the general public” ensures that virtually any possible economic and non-economic activity can fit in.

Suggestion: These proposals should be completely rejected. Public purpose should be clearly and unambiguously defined and limited in the law to certain types of pro-poor, redistributive, employment-intensive and public good oriented activities, which are Government-owned to the extent of at least 50 per cent. The decision of what constitutes public purpose should be democratized and the legislature involved along with the PRIs. This should not remain in the hands of the executive alone. All project proposals should be scrutinized based on three yardsticks: (i) public purpose, (ii) least displacing and (iii) in accordance with land-use policy and plan. The mechanisms for this are: 

• Social Impact Assessment by an Expert Committee with official, non-official and elected representatives.

• State-level Project Approval Committee comprising elected representatives of all levels, experts and bureaucrats.

• Public consultation with affected Gram Sabhas or Assemblies of interested persons in case an entire village is not affected

• All transfer from one public purpose to another to require scrutiny of the new public purpose by Social Impact Assessment, Project Approval Committee and under Sec 5 to eliminate proxy acquisition.

4.     Land Acquisition through Surrogate Land Use Changes

Problem: Private companies and land speculators attempt backdoor land acquisition through benaami and other instruments and subsequently change land use, with or without post facto clearances, leaving landowners at the mercy of the market and speculators. These are usually in violation of the land use plans and laws of the relevant state, UT, Central or State governments.

Suggestion: The Act should define “major land use alteration” as a change in the purpose for which land is utilized and classified, including but not restricted to changes from agriculture (including fallows and wasteland) to non-agriculture, government-owned public land to privately leased or owned land, and forest to non-forest use, that exceeds the relevant agricultural land ceiling in the case of land use change from agriculture (including fallows, wastelands, etc.) to non-agriculture; or exceeds an area of fifty hectares in all other cases of change in land use, or violates the Land Use Plan of the relevant State or UT government or the concerned local government’s plans under 243 G. All such alterations in land use should require (1) Social Impact Study (2) prior prima facie approval subject to Sec 5 of the Act from the Project Approval Committee after SIAs and (3) MoUs to be signed with the Government. Subsequently, they should be treated as land acquisition to be brought under the provisions of the LAA, with the Government undertaking the land acquisition. Violations and un-scrutinized “major land use alterations” should invite penalties.

5.     Regulation of Private Companies to avoid Unscrupulous Land Acquisition

Problem: Part VII of the LAA Bill deals with private companies in a very limited set of cases. While the Government can, after 1984, acquire land for a Company as defined in the Act, the Companies are only required to state their ability and willingness to meet the cost of acquisition. There is a marked absence of the requirements and its due process in the case of such Projects. 

Government’s Proposed Amendment: The Government proposes to leave Companies entirely out of the purview of the Act and delete Part VII entirely except in cases specified under proposed Clause 3(f)(iii).

Critique of Government’s Proposed Amendment: The Government has basically allowed a free run to Companies and market-based land acquisition by bringing them under the definition of public purpose itself provided that at least 70 per cent of the land is acquired by them. Having done that, the Government too becomes free from its obligations to protect the interests of the peasantry and other land-dependents and common property users on the one hand and regulate land use and public purpose, on the other.

Suggestion: Acquisition by Companies and individuals should be brought strictly under the purview of the Act. Companies should first approach the Government with their proposals, and only after the public purpose and displacement is examined through Social Impact Assessment and the Project Approval Committee and given prima facie approval subject to Sec 5 of the Act, and a MoU signed, should the Government acquire the land for Companies through the provisions of the LAA.

6.  Compensation : Basis, Scope and Profit Sharing

Problem: The Act keeps acquisition costs low by an unfair and arbitrary method of evaluating the price of land and restrictive coverage of persons and assets resulting in very low compensation. This is achieved through five devices: (1) basing the valuation on past sale deeds that are officially recorded; the land prices in these deeds are often under-reported in order to escape taxes and duties and therefore do not reflect the operative market rates. (2) refusal to transfer any part of the gains of the higher values accruing from the proposed change in land use to the affected persons. (3) Payment of depreciated value for assets making it impossible to replace them. (4) The procurer (the Government) deciding the price, a system antithetical to a fair and democratic valuation. (5) Land-dependence through labour and services and common property resources as well as unrecorded occupancy is not compensated.

Government’s Proposed Amendment: The proposed Amendment 11B links compensation to ‘market’ value based on recorded transactions and officially determined stamp value which invariably undervalue real market rates. This results in the acquirer of land continuing to have an upper hand. The government also proposes an increase in solatium.

Critique of Government’s Proposed Amendment: This will make acquisition even cheaper and result in systematic undervaluation to underestimate project costs. It will override the entire Case Law that provides for calculation of the value on the basis of the highest exemplar amongst proximate land, where proximity is defined in terms of time, space, quality and area of the sale (and not averages). The increase in solatium is miserly and inadequate.

Suggestion: The Act must shift to a methodology in which compensation ensures livelihood security and improves living standards. The present proposal is one of market-based valuations, of which shares may be a part to a ‘fair’ valuation that is computed as the highest amongst the following:  the basis of market prices, replacement cost, augmented value and output value. This paradigm of calculating the compensation needs to change. The land prices must be determined on the basis of a Survey by an Evaluation Team which should include elected respresentatives and representatives of the ‘interested persons’ whose lands are being acquired besides the Collector and Government representatives. In addition, there must be higher solatium given the compulsory nature of the acquisition.

The affected persons should also get a share in the increased income arising from the change in land use, which is expressly prohibited in Section 24. Shares and Debentures should be given over and above the compensation, as a part of ‘profit-sharing’ and not as a portion of the compensation. For this, the State Governments should create a Corpus Fund/Depository which can manage the Shares and Debentures of the affected persons and provide them with a future stream of monthly/annual income. The award of shares and debentures should be made by the Expert Group undertaking the Social Impact. The arrangement should be such that the affected persons do not have to bear any risk of loss from the project, while they gain in case profits are being made.

Furthermore, there must be compensation for loss of livelihood and income of land-dependent workers, service providers, artisans, as well as loss of access to CPRs at four years minimum wages. All interested persons who loose their livelihood and/or land must be provided 200 days annual guaranteed employment at minimum wages as a part of their compensation and rehabilitation.

There should be reversion of unused land to original owners without recompense to the State.

7.     Timely and Comprehensive Information on Acquisition Details

Problem: Section 4 of the LAA provides for preliminary notification for proposed or likely acquisition, without the requirement of individual notice to the person concerned. However, the notices are published in the Gazette in newspapers to which people do not have access. The notices are vague and imprecise in terms of the exact land parcel involved, its categorization and description, the purpose of acquisition and the interested persons. It is therefore incapable of conveying a clear description of the land to be acquired, the very foundation on which objections can be submitted under Sec 5A of the Act. Since the Section does not require individual notices to all interested persons, there is no opportunity for the wrongly excluded to either know of their exclusion or object under section 5A.

Suggestion: The affected persons must be individually served the notification at the very beginning with complete description of land parcels and the conspicuous places in the locality too must be specified, to prevent it from becoming a mere formality. Furthermore, no notification should be made prior to the complete recognition and vesting of rights under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition Of Forest Rights) Act, 2007 if their rights are to be protected during land acquisition proceedings.

8. Objection, Appeal and Grievance Redressal

Problem: There are broadly seven deficiencies in the Act in relation to the appeals process: (1) information about the procedure and sequence, (2) locus standi or who can appeal, (3) the grounds on which appeals are permissible, (4) the time limitation within which appeals must be made (5) slow pace of dispute resolution and (6) the agency/body to which appeals can be made and (7) absence of democratic process for grievance redressal.

Government’s Proposed Amendment: The amendment proposes an Authority for the State and Centre comprising handpicked appointees of the relevant Government and brings all these matters outside the purview of Civil Courts.

Critique of Government’s Proposed Amendment: None of the existing problems except of slow pace of dispute resolution has been addressed by the proposed amendment. There are several problems with this. Firstly, the Constitution is based on a separation of functions between the legislature, executive and judiciary and it seems patently unfair and undemocratic that a body appointed by the executive will scrutinize its own decisions. It violates the basic premise of independent functioning of the judiciary. Secondly, denying access to Courts in this manner is not in keeping with the Constitution. Finally, if the Courts take too long, it is better to address that issue directly by increasing the size of the judiciary or simplifying procedures rather than bypassing the judiciary completely.

Suggestion: In the interest of justice and independence, a far better approach would be to increase the strength of the judiciary by creating a separate judicial bench for fast-tracking disputes on the Land Acquisition Act. The better option is a Designated Court presided over by a Judge appointed by the State. The Supreme Court must certainly have the authority to hear cases.

There should be procedural simplicity and fairness in the appeals and objections process and removal of unjust barriers to appeal. Time limitation should become less rigid for interested persons while requiring a time bound response from the Appellate Authority.

The Gram Sabhas should have more consultative and deliberative powers where entire villages are involved as shall assemblies of those affected where entire villages are not affected.

9. Emergency Powers

Problem: Under the ‘Emergency’ clause, land can be acquired without Enquiry and Objections or giving the interested persons an opportunity of being heard. In recent times, a lot of land has been acquired for corporate mining and infrastructure projects using this extraordinary power.

Suggestion: The Act must contain adequate safeguards against its misuse. Section 17(1) must be deleted.

10. Resettlement to Precede Displacement

Problem: Possession of land is often taken prior to rehabilitation and payment of due compensation.

Solution: The Government correctly proposes that people should not be dispossessed from their land until compensation has been paid. However, it is important to ensure that in all cases of displacement, rehabilitation and resettlement must precede the physical possession of the land by the acquirer.