BRIEFLY
- Land reform is still in its final stage, more than 30 years on.
- The paradox: the longer the funding for land surveying is not provided at the required level from the state budget, the more it will cost from the state budget.
- By continuing the current approach, the land reform will be completed in 20 years or more; its administration will be more expensive than implementation - tentatively about 3.46 million euros. In its turn, the land survey requires about 2.8 million euros from the state budget.
- The aim of the land reform is: (1) to restore justice and return the property to former landowners and their heirs which belonged to them in the territory of Latvia as of 21 July 1940 and was nationalised; (2) to reorganise land ownership relations in accordance with the principles of a market economy.
Are the legal framework and the actions of the responsible institutions sufficient to complete the land reform in the next 5 years? Unfortunately, the results of the completed audit clearly show that no.
It is a mistake to think that reform is coming to an end
The decisions taken by the Cabinet of Ministers to complete the land reform throughout the country, with the exception of Tukums and Riga, give the impression that it is almost complete. However, this is not the case, as the cadastral land survey continues, decisions on the restoration of land ownership, conclusion of land pre-emption (purchase) agreements and arrangement of property rights continue.
“Although the state has undertaken to carry out cadastral land survey at the expense of the state budget for those landowners who had owned land in Latvia as of 21 July 1940, and their surviving spouses, children and grandchildren, politically repressed and people with group 1 disabilities, cadastral land surveying is extremely slow. For example, in 2021, land plots that were included in the queue before 2008 are still being surveyed. Often people do not reach their line during their lifetime and the restoration of ownership applies to the heirs of the heirs for several generations. Therefore, people mostly survey the land at their own expense without waiting for state support,” explains the unfair situation Ms Kristīne Jaunzeme, Member of the Council of State Audit Office, Director of the Second Audit Department.
On 1 June 2021, the list of land units to be surveyed at the expense of the state budget included 3,884 units. Until 2022, the State Land Service (SLS) planned funding of 70,000 euros for the cadastral land survey from the state budget per year, which allowed surveying an average of 80 land units per year. From 2022, one plans to channel 140,000 euros per year, which will allow surveying between 160 and 170 land units. However, continuing to survey the land from the state budget at the planned pace, one can predict that this process will take at least another 20 years. At the same time, the audit has established that the list of land to be surveyed at the expense of the state budget contains inaccurate data, as it does not exclude land units for the survey of which funds from the state budget are not due.
No specific responsible institution. No qualitative data on the real situation. No deadline either.
No institution is responsible for planning and coordinating the completion of the land reform in an external law currently; therefore, it has not been assessed whether and to what extent the objectives of the land reform have been achieved, what legal solutions could facilitate the completion of the reform. There are also no deadlines for the completion of the land reform in general and for the activities to be carried out within it stipulated, which does not facilitate the performance of land surveying works and the arrangement of ownership in the foreseeable future.
The audit has detected that the Ministry of Justice (MoJ) and the SLS also do not have information on the number of people whose land ownership should still be rehabilitated. The reform has also resulted in a significant number of land units cognizable to the state and local and regional governments that have not been surveyed initially.
Although no institution coordinates the completion of the land reform purposefully, the SLS and “Publisko aktīvu pārvaldītājs POSSESSOR” Ltd continue to implement the functions entrusted to them, where the SLS organises the land survey at the expense of the state budget, while POSSESSOR enters into land pre-emption (purchase) agreements. However, the cost of administering these functions is high compared to the number of cases resolved per year.
“The longer sufficient funding for land surveying is not provided from the state budget and the longer using privatisation vouchers in settlements for land pre-emption (purchase) of land is possible, the more budget spending there will be. While the cadastral land survey at the expense of the state budget requires 2.8 million euros at present, continuing the administration of the land reform in the current way, the administration alone will requires 3.46 million euros in the next 20 years,” explained K.Jaunzeme.
Recommendations of the State Audit Office #AfterAudit
To facilitate the conclusion of the land reform and the achievement of the objectives of the land reform in a foreseeable time and to promote the economic use of state budget funds, the auditors propose to determine the institution responsible for planning and coordinating the completion of the land reform in an external law, assess the possibility to determine the deadlines for the completion of the land reform, accelerate the land surveying at the expense of state budget by devoting proportional public funds for administrating process and providing the public with reliable and traceable data regarding the queue for the land survey at the expense of state budget.
The Cabinet of Ministers:
- Determine the institution responsible for planning, implementing and coordinating the completion of the land reform in an external law;
- Assess the possibility to determine the deadlines within which former landowners or their heirs are obliged to submit the missing documents and to carry out the land survey to make decisions on renewal of land ownership, allocation of equivalent land and conclusion of land pre-emption (purchase) agreements; determine deadlines for land pre-emption (purchase) agreements to be entered into, providing for the forfeiture of rights due to non-performance within the specified term, and to determine the deadlines within which the responsible institutions must adopt and conclude the relevant decisions and agreements.
The Ministry of Justice:
- Find solutions for completing the land reform in Riga in cooperation with the involved institutions inter alia by assessing the need to amend laws and regulations and propose corresponding amendments to laws and regulations as appropriate to facilitate the implementation of the activities to be performed at the end of the land reform in connection with the allocation of equivalent land in the Riga City Municipality, the Ministry shall;
- Improve the process of organising land surveying at the expense of the state budget in co-operation with the SLS by achieving its implementation in a shorter period of time and consuming less resources, including assessing and balancing the necessary funding for land surveying and administrative costs of the SLS for organising that process.
The State Land Service:
- Ensure the accuracy, traceability and clarity of the data about the units of land to be surveyed at the expense of the state budget included in the list of land units (Basic List) to be surveyed at the expense of the state budget; update the Basic List to provide for the compliance of the data contained therein with laws and regulations and the calculation of the necessary state budget funds for the land survey at the expense of state budget be based on accurate data; determine the actions to be taken and deadlines for resolving legal constraints;
- Ensure transparent, comprehensible, and traceable distribution of financing to land users for the receipt of the land survey service at the expense of the state budget, including improvement of internal regulations and, if necessary, to initiate amendments to external laws and regulations.
After the audit, the State Audit Office will also apply to the Ministry of Environmental Protection and Regional Development to call for the implementation of the municipal supervision competence specified in the Law on Local and Regional Governments in relation to those local and regional governments whose land commissions have not transferred documents and archive files to the State Land Service. Besides one should note that the State Audit Office has urged the Ministry of Economics repeatedly to take measures for assessing the completion of privatisation and the use of privatisation vouchers and set an expiry date for privatisation vouchers, for instance, after the audit on the performance of SJSC “Privatizācijas aģentūra” (Privatization Agency) published in 2016 when the State Audit Office concluded that is was high time to decide on the completion of privatisation. Otherwise, additional expenses to the state budget will continue to be incurred.
The timeframe for implementation of the recommendations of the State Audit Office is November 2023.
About the land reform
The land reform was initiated 30 years ago (On 21 November 1990 with the adoption of the Law on Land Reform in Rural Areas of the Republic of Latvia by the Supreme Council of the Republic of Latvia). The aim of the land reform was to return the land to the former landowners and their heirs they had owned on the territory of Latvia as of 21 July 1940 and was nationalised and to ensure the possibility for other residents of Latvia to buy land, thus reorganising the legal, social, and economic relations of land use and ownership to a market economy. The possibility of completing the land reform was discussed as early as 1996, but the land reform is still not over twenty-five years later.
Additional data