LAND LAW CHANGES TO LEGALIZE CURRENT GOV ABUSES

C O N F I D E N T I A L CARACAS 001356

SIPDIS


NSC FOR CBARTON
HQSOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 05/04/2015
TAGS: PGOV EAGR SENV VE
SUBJECT: LAND LAW CHANGES TO LEGALIZE CURRENT GOV ABUSES


Classified By: POLITICAL COUNSELOR ABELARDO A. ARIAS FOR 1.4 (D)

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Summary
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1. (C) The Venezuelan National Assembly amended the 2001
land law on April 14 to increase the types of land subject to
expropriation, to grant squatters more rights, and to empower
the National Land Institute (INTI). The modifications,
however, do not provide INTI objective standards to use as it
exercises its new authority. With or without such standards,
the GOV probably will continue to apply the law in a
discriminatory manner. Most changes to the law validate
abuses that INTI has already committed. End summary.


2. (C) The Venezuelan National Assembly passed a "partial
reform" of the 2001 land and agrarian development law on 14
April. The legislation now goes to President Hugo Chavez,
who said he would have the reform published immediately in
the official gazette, according to press reports. The
modifications include:

-- The "latifundio," lands targeted for GOV redistribution,
is defined more loosely. The 2001 law defined the
"latifundio" as idle, infertile land in estates larger than
5,000 hectares. The new law calls for the redistribution of
any unproductive land in estates over 100 hectares. It
expressly gives the National Land Institute (INTI) the
authority to determine whether such land is being used
appropriately.

-- INTI will have authority to regulate the mining of
"non-metallic minerals." (Note: several governors have
stopped the activities of mines and quarries, asserting that
their owners lack title. The Venezuelan construction
industry is concerned about this provision.)

-- "Occupants" will be able to remain on land as long as they
make the land productive. Press reports have interpreted
this rule as applying only to squatters.

-- The law will apply to all types of land. Under the
original law, only lands within the confines of "rural
polygons" were subject to redistribution. Former Minister of
Agriculture Hiram Gaviria explained to poloff that rural
polygons were portions of Venezuelan territory the GOV was to
classify in terms of agricultural productivity.

-- The law incorporates two articles of the 2001 law ruled
unconstitutional by the Supreme Court. One article allows
the GOV to take back land without paying "illegal occupants"
for improvements they have made. The other allows the INTI
to "rescue" (the term used for taking over land deemed to
belong to the state) land without court approval.


3. (C) The changes to the land law neither provide a
framework for determining which lands are productive nor a
means to equip INTI officers to exercise their new authority.
Alejandro Arcai, the local lawyer for the British ranching
company Vestey Group, told embassy officers April 20 there
were no legal standards to measure the effective use of land.
Arcai said Vestey's Hato El Charcote ranch produced more
than the national average amount of meat per hectare of land,
yet INTI had judged much of the ranch "uncultivated" and had
granted "writs of permanence" allowing squatters to remain.
A biologist for the 80,000-hectare wildlife reserve, cattle
ranch, and biological research center Hato Pinero told
emboffs April 21 that the INTI officers inspecting the
property, which also had been declared public land, had no
scientific background.

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Vestey's Legal Battle
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4. (C) INTI declared the 13,000-hectare Hato El Charcote
GOV property in March. Armed with title documents dating
back to 1830, Arcai nonetheless appeared cautiously
optimistic about his chances for successfully appealing the
ruling before the deadline of May 15. He told emboffs that
he would have a 90 percent chance of winning a case in a
"normal court" and that ranchers had experience prevailing
even in difficult political circumstances. Ranchers had

survived the agrarian reforms under President Romulo
Betancourt and the dictatorships of Juan Vicente Gomez and
Marcos Perez Jimenez, he said. If all else failed, Arcai
said, the British Government would invoke an "Anglo-American
treaty" (presumably a reference to the UK-Venezuelan
bilateral investment treaty) to try to protect Vestey's
holdings. Vestey Group has asked the British Embassy to keep
a low profile on the case so far, but Arcai said it may soon
be getting more involved. The main obstacle Arcai described
was that of squatters, who had been invading the land since
late 2000. Now, he claimed, squatters occupied 90 percent of
the ranch. Although its production had declined, Hato El
Charcote made do by driving cattle to graze among the
squatters' plots.


5. (U) INTI chief Eliecer Otaiza told the press in
mid-March that the ranch's proof of title was "irregular,"
and the national archive only had Vestey's ownership
registered back to 1850. (The law requires the titular chain
to be established back to 1848, the date of the Venezuela's
first land law.) Otaiza added in mid-April that INTI will
withdraw from Hato El Charcote and from 99 other rural
properties declared public land if the alleged owners show
the courts title documents that they have not shown INTI.
Otherwise, INTI will begin to establish agricultural
cooperatives on the properties after their 60-day windows for
appeals have closed, he said.

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Comment
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6. (C) The changes to the land law add a veneer of
legitimacy to current GOV practices. For example, the GOV
already has mounted "invasions" and "rescues" without court
orders, countenanced land invasions, refused to pay for land,
and expropriated urban and other properties not covered under
the 2001 law. Selective enforcement of the law will remain
the norm. INTI has already begun to interpret the term
"occupants" in the law as "ranchers" in cases where the law
curtails rights and as "squatters" where it guarantees them.
INTI also may be favoring GOV allies and those who can pay
land inspectors to look the other way. INTI's new authority
over mines represents a departure from current practice. The
change will offer INTI personnel--whom Otaiza accused of
corruption in a recent interview--another lucrative source
for kickbacks.
McFarland


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2005CARACA01356 - CONFIDENTIAL