Identifier
Created
Classification
Origin
06LAPAZ3244
2006-12-01 13:50:00
CONFIDENTIAL
Embassy La Paz
Cable title:  

LAND REFORM BILL AIMS TO FACILITATE REDISTRIBUTION

Tags:  EAGR ECON PGOV BL 
pdf how-to read a cable
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PP RUEHWEB

DE RUEHLP #3244/01 3351350
ZNY CCCCC ZZH
P 011350Z DEC 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 1502
INFO RUEHAC/AMEMBASSY ASUNCION 6340
RUEHBO/AMEMBASSY BOGOTA 3664
RUEHBR/AMEMBASSY BRASILIA 7527
RUEHBU/AMEMBASSY BUENOS AIRES 4784
RUEHCV/AMEMBASSY CARACAS 2036
RUEHPE/AMEMBASSY LIMA 2108
RUEHME/AMEMBASSY MEXICO 1932
RUEHMN/AMEMBASSY MONTEVIDEO 4234
RUEHQT/AMEMBASSY QUITO 4673
RUEHSG/AMEMBASSY SANTIAGO 9258
RUEHSO/AMCONSUL SAO PAULO 2071
RHEHNSC/NSC WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
C O N F I D E N T I A L LA PAZ 003244 

SIPDIS

SIPDIS

STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW

E.O. 12958: DECL: 11/30/2016
TAGS: EAGR ECON PGOV BL
SUBJECT: LAND REFORM BILL AIMS TO FACILITATE REDISTRIBUTION

REF: A. LA PAZ 3096

B. LA PAZ 3155

C. LA PAZ 3204

Classified By: Ecopol Counselor Andrew Erickson for reason 1.4 (d).

-------
Summary
-------

C O N F I D E N T I A L LA PAZ 003244

SIPDIS

SIPDIS

STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW

E.O. 12958: DECL: 11/30/2016
TAGS: EAGR ECON PGOV BL
SUBJECT: LAND REFORM BILL AIMS TO FACILITATE REDISTRIBUTION

REF: A. LA PAZ 3096

B. LA PAZ 3155

C. LA PAZ 3204

Classified By: Ecopol Counselor Andrew Erickson for reason 1.4 (d).

--------------
Summary
--------------


1. (SBU) The senate approved the GOB's land reform bill late
on November 28 in a controversial legislative maneuver with
just over half of its members present. The bill provides
that if property is deemed unproductive through biannual
reviews, it will revert to the state. It also centralized
the National Agrarian Reform Institute (INRA) and
strengthened the role of the agriculture ministry in the
titling and reversion process. INRA reversion decisions can
only be disputed before the national agrarian tribunal. A
pro-land reform NGO representative characterized the new law
as drastic, and lamented that it may not significantly
benefit the nation's indigenous population, particularly the
landless from the West. Santa Cruz oilseed producers worry
that the bill's limitation of legal recourse for land owners
and the provision of a public right of denunciation of
"unproductive" land could produce legal insecurity and make
it difficult for farmers to access credit. End summary.

--------------
Senate Passes Land Reform Bill
--------------


2. (C) The senate approved the GOB's controversial land
reform bill (ref A) late on November 28. Fourteen opposition
senators out of the total 27 senators had abandoned the
senate session one week earlier to protest the bill (ref B),
resulting in the lack of a quorum and essentially shutting
down the senate. However, two alternate opposition senators
(suplentes) from the Podemos and UN parties joined the 12 MAS
party senators on the 28th in voting in favor of the bill.
While some political commentators have openly speculated that
the two alternates were bribed, such speculation remains
unproven. The bill was approved under significant pressure
from social groups after thousands of indigenous marchers in
favor of land reform reached La Paz on November 28 (ref C).

The president's legal adviser told Econoff on November 28
that the government planned to issue five decrees to
implement the reforms had the senate not approved the bill.
(Comment: The dubious manner in which the bill was approved
raises more concerns than the bill itself. End comment.)

--------------
Overview of Reforms
--------------


3. (SBU) The bill provides, in line with the current law,
that if INRA determines that medium and large properties are
not fulfilling an "economic and social function", they can be
"reverted" to the state. Under the 1996 law, land was deemed
to not be fulfilling an economic and social function only if
the landowner was not paying taxes. The revised law allows
for reversion to the state if the land is not actually being
worked. The reform bill states that even after land is
titled, it can be reviewed every two years to determine if it
is serving an economic and social function. If it is not, it
will revert to the state without compensation. Bi-annual
reviews can be initiated by INRA itself or based on
denunciations by the agrarian and forestry regulators, the
park service, the national agrarian commission, or regional
agrarian commissions. Small properties that are unproductive
and productive medium and large properties can also be
"expropriated" with compensation for the "public good" in
order to be given to indigenous communities.



4. (SBU) Decisions of the INRA national director can only be
disputed before the national agrarian tribunal within thirty
days of notification of an INRA resolution. The bill also
provides that a national agrarian commission, composed of
ministry, social sector, and business representatives, will
exercise social control over INRA and the Tribunal to ensure
that unproductive properties are reverted to the state. In
an effort to prevent corruption, the law prescribes that INRA
may not give land to central government or departmental
government workers. The MAS and the opposition parties did
not agree on the main themes of the reform -- the definition
of "economic and social function," the circumstances in which
land can be reverted or expropriated, and the structure of
the National Agrarian Reform Institute (INRA).

-------------- --
NGO Concerned that Reforms Won't Solve Problems
-------------- --


5. (SBU) Researcher of the NGO Fundacion Tierra (Land
Foundation) Gonzalo Colque told Econoff on November 30 that
the bill that was passed by the congress was the most drastic
of the GOB proposals that the government was negotiating with
social and business organizations. In the end, he said, the
government did not reach consensus, but imposed its most
radical proposal. He argued that the intention of the law is
good and that reforms were needed because the 1996 law did
not encourage productivity. Because land was only reverted
if the owner did not pay taxes, and taxes had been lowered to
around USD 0.40 per hectare, land-owners had no incentive to
use their land productively. However, some of the
modifications are vague, and thus, may put legitimate land
owner rights in danger, he said. The new law offers land
owners limited legal recourse, he added.


6. (SBU) According to Colque, the government does not have
the resources to conduct productivity reviews of property
every two years, so the law may have limited economic impact
in the end. He said that it is unclear how much the nation's
indigenous people will benefit, because the law favors
original people of the East, who only make up one percent of
the country's indigenous population. Expropriated lands can
only be given to communities through community title. This
favors original communities in the East who still live in
traditional groups. However, the landless indigenous from
the West that have migrated to the East will have difficulty
obtaining titles.

--------------
Readout from Santa Cruz
--------------


7. (SBU) Advisor of the Santa Cruz Oilseed Producers
Association Diego Montenegro told Econoff on November 29 that
the law that was passed by the senate was the same as the
version passed by the chamber of deputies on November 15. He
said that the law's three main elements were the
centralization of INRA in La Paz, the strengthening of the
agriculture ministry's role in the titling and reversion
process, and the facilitation of land reversion to the state.
He said that the law also limited legal recourse of land
owners. He argued that the ability of people to denounce
lands as unproductive arbitrarily, without sanction for
frivolous denunciations, would produce legal insecurity and
make it difficult for farmers to access credit. He explained
that Santa Cruz already had planned a civic strike for
December 1 and that hunger strikes were ongoing to protest
MAS maneuvers to control the Constituent Assembly and that
the region would probably not take additional measures to
specifically protest the INRA reforms. (Note: Many people in
Santa Cruz are concerned about the law because they hold
large tracts of valuable land that were obtained through

irregular means, such as based on political connections
during dictatorial periods. End note.)

--------------
Comment
--------------


8. (C) Although reforms were desperately needed to resolve
Bolivia's divisive land issues, the GOB's imposed reforms
raise concerns about respect for due process and
legitimately-held land rights. The dubious manner in which
the law was approved raises even more serious concerns about
respect for democracy, although commentators have argued that
the process was technically legal. While the law makes it
easier for the state to redistribute land and has disgruntled
large agricultural producers and cattle ranchers in the
eastern regions of Bolivia, we suspect that the law will not
have a significant impact on land distribution in practice
due to the GOB's limited institutional capacity to implement
it. The real danger lies in the GOB's need to prioritize its
application against certain estates, farms, and properties.
This selective application could be used to target political
enemies. End comment.
URS