GEO

Hampered transfer of agricultural land to the local self-governing units

29 March, 2017

Congruent to Article 162 of the “Self-Government Code of Georgia”, the Ministry of Justice, the Ministry of Regional Development and Infrastructure, the Ministry of Economy and Sustainable Development and the Ministry of Finance should have worked out and presented to the Government of Georgia for approval a respective schedule and rule for transfer of agricultural land to municipalities until 1 January 2017. However, the Ministries have not yet fulfilled the given commitment. As a result, the process of decentralization, which entails transfer of political, administrative, fiscal and economic resources, including the property to the local government, is hampered.  

With respect to the given issue, “Transparency International - Georgia” has filed a written application to the Government of Georgia; however, the response provided by individual ministries does not cover concrete details on the reasons behind the delay in the process, expected timeframe for approving rule of land transfer and completion of the process.

  • According to the letter  of the Ministry of Regional Development and Infrastructure, the Ministry “intends to work out a strategy and a respective action plan 2017-2020 for democratic governance development at the local level”.  Fulfillment of the obligation stipulated by Article 162 of the Self-Government Code of Georgia is planned within the frame of this process.  The letter provided by the Ministry of Regional Development does not clarify the reason for neglecting the obligation, neither does it define specific timeframe for its fulfillment;
  • As the Ministry of Justice reported, “within the frame of its competence, the Ministry will participate in the process of ensuring conformity of the given normative act with the legislation of Georgia after getting a draft as provided by the law”.
  • According to the  letter received from the Ministry of Finance, the ministry has already taken part in performance of the duty envisaged by Article 162 of the Self-Government Code of Georgia; however, as the Ministry believes, firstly it needs to be determined whether the obligation is in line with the “municipal property categories, rules of establishment, property rights defined by the Self-Government Code  as well as legal, economic and organizational principles and basic conditions for municipal property privatization and transfer“.
  • Regardless of the communication between the organization and the Ministry of Economy and Sustainable Development, the Ministry has not yet responded to our appeal to the Government of Georgia. The Ministry of Economy received a letter of correspondence  from “International Transparency – Georgia” on retrieval of public information on 31 January 2017.

International practice

While focusing on the given issue, it is important to look at the foreign experience as well.  Below, we present examples of Estonia and the Czech Republic:

Estonia:

According to Estonian legislation:

  • Municipal property can include any item required for social or economic development of the local self-government;
  • In order to regulate the issues of local importance, the local self-government is entitled to use the state property for free; it may get property in ownership for free or in exchange for certain fees;
  • Local self-government enjoys preferential right to acquisition of land; the given fact facilitates the use of local property for delivering different types of services to the local population;
  • The constitution of Estonia awards municipalities with wide autonomy in the field of property management; each municipality has its own rules for property disposal.
  • Municipal property may be used: 1. For public purposes 2. For implementation of municipal authorities 3. For income generation.

The Czech Republic:

  • In the Czech Republic, the state transferred the major part of the property to the local authorities in the 1990s;
  • Substantial part of the property, which the local authorities possessed until 1948, was transferred back to their ownership;
  • Along with different types of property (different land, buildings), the municipalities received 34% of shares in gas and electricity state companies, 80-90% of shares in water supply companies;
  • Transfer of shares served the purpose of involving the local self-government units in the municipal control and decision-making process;
  • The Czech legislation obliges the municipalities to take care of effective and efficient use of the municipal property, its maintenance and development; municipalities are obliged to perform stock-taking of the property on a periodic basis, protect it against damage and embezzlement.
  • The municipalities have the right to sell, exchange or rent the property, which they are not disposing of.

Recommendations

Transparency International - Georgia believes that the ministries had a reasonable time (from February 2014 to 1 January 2017) to fulfill the obligation envisaged by Article 162 of the Local Self-Government Code of Georgia. Delayed transfer of agricultural land to the municipalities puts decentralization of the government and independence of the local authorities at stake.

  • We believe that transfer of agricultural land to the local self-government will largely promote its economic sustainability; 
  • In most cases, the property owned by the municipalities only allow the local authorities to implement their exclusive powers; they are rarely given an opportunity to generate additional income using the property; In case of agricultural land transfer, through use of their own property (privatization, transfer of management, lease, etc.), local authorities will be able to mobilize additional financial to implement their competences and carry out economic activities.
  • In our opinion, the municipalities will be able to manage the property in their territory more efficiently than the central government; they will manage to more effectively dispose of agricultural land, which, in turn, will facilitate the establishment of solid property base, financial independence of the municipalities and improvement of the local investment climate.

Transparency International - Georgia calls on the relevant ministries and the Government of Georgia to draw up a timetable and relevant rules for transfer of agricultural land to municipalities in short order and start the land transfer process within the reasonable timeframe.

 
Author: „საერთაშორისო გამჭვირვალობა - საქართველო“