jeopardized if they are unable to take possession of the land in question or find themselves exposed to a legacy of conflict due to long-standing disputes and unresolved claims. Still, expropriation as a precondition for transferring land to investors remains widespread. In Ethiopia, more than a third of expropriations, not necessarily all for large-scale land acquisition, benefited private investments rather than the public. There are also concerns about conflicts of interest, as members of the executive who decide on expropriation also often sit on the commission that hears appeals to these transactions. Even if some compensation is paid, the fact that land cannot be sold implies that those who lost land will be unable to obtain land somewhere else even if monetary compensation is paid. Thus, the state may seriously undermine its authority by being seen as taking the side of one party, especially if amounts or modes of compensation are disputed. The case of Peru illustrates that acquiring the land needed for a vibrant agricultural industry is not contingent on expropriation and may be easier without it. In this case, constitutional rules tightly circumscribe when expropriation can be used to prevent abuse of power by the state. Expropriations are void unless the state is the direct beneficiary. Public scrutiny and debate of individual expropriations are ensured by the requirement that every expropriation be authorized by the legislature in a law spelling out the future use of expropriated land. To ensure impartial and realistic valuation, property values have to be determined in a court proceeding. Expropriated owners can demand cash payment of the land’s market value plus remedies for any damages. Peru’s process also has clear time limits; congressional expropriation orders automatically lapse after six months if the judiciary process has not started; and after 24 months if court proceedings are not concluded by then. Moreover, if within one year of the conclusion of the court process the expropriated property is not used for its planned purpose, it automatically reverts to the original owner. These strict limits have not inhibited agricultural growth—quite to the contrary. Peru’s agro-exports have been expanding by about 8 percent a year, making it one of the largest exporters of agricultural produce in the world. More than 70 percent of the land used by the sector has been acquired through auction rather than expropriation, in many cases by investors with little experience in agriculture (Hernandez 2010). The ability to appeal compulsory acquisition decisions varies widely across countries, and protection of local interests is often weak. In Nigeria and Sudan, the amount of compensation can be appealed but the expropriation decision itself cannot. Eviction orders are often given before a final judgment on appeals has been made and conflicts of interest are frequent, making it more difficult to uphold existing rights. So, even where complying with the letter of the law, expropriations may lack legitimacy, leaving investors open to what local people might consider justified acts of sabotage and pilfering that can significantly increase operating costs.
THE POLICY, LEGAL, AND INSTITUTIONAL FRAMEWORK
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