The recent Thika Road demolitions may have just been the start: According to government plans, the expansion of the road will require expropriations of lands belonging to some of the largest businesses in the country. Andrea Bohnstedt and Albert Muriuki discuss how compensations will be dealt with under the new tribunal, and what the wider implications are.
On 3 October 2008, a notice in the Kenya Gazette announced that the Minister of Land, James Orengo, had appointed five members to head the new Land Acquisition Compensation Tribunal. Maybe because of the proliferation of tribunals and commissions in Kenya, little attention was paid to this particular one, but if the recent demolition of buildings on restricted land is anything to go by, this specific one deserved a lot more attention. The setting up of the tribunal is the clearest indication yet that Kenya is going to see an increase of land being compulsorily acquired by the state for the public benefit.
Where the Right to Property Ceases
Although the Kenyan constitution recognises the right to own property and is categorical that “no property of any description shall be compulsorily taken possession of, and no interest in or right over property of any description shall be compulsorily acquired,” it also gives a large and significant exception by allowing for “provision(s) for the compulsory acquisition of land for the public benefit.” The constitution states that where it has been satisfied that the taking of possession or acquisition is necessary in the interests of defence, public safety, public order, public morality, public health, town and country planning or the development or utilisation of property so as to promote the public benefit, then the right to own property may be waived.
When a property is forcibly acquired, it is the Commissioner of Lands who makes inquiries into the value of the land and determines the value in accordance with government principles. It is likely that the compensation value given by the government would be way below the expected value by each owner.
In valuing the land, the government looks at the market value of the property, and also at any damage that the owners may suffer from the land being severed from their other land as well as damages that others may suffer if they are adversely affected by the government’s intervention. Government will also offer some compensation if affected parties need to change their residence or place of business as a consequence of the appropriation. Under the law, apart from these matters, no other matters should be considered in valuing the land.
New Tribunal to Review Government Compensations
This is where the newly created Land Acquisition Compensation Tribunal comes in: It is the first instance for parties who are unsatisfied with the compensation by the Commissioner of Lands before they can turn to the courts of law, and is mandated to look into issues of compensation where a party feels that they have been unfairly compensated for their property.
The new tribunal consists of five members appointed by the minister. It will be chaired by an advocate of not less than ten years’ standing. For this position, the minister has selected Tom Odhiambo Ojienda, the President of the East African Law Society and a land law lecturer at Moi University School of Law. His credentials include the publication of a book on land law tenure systems in Kenya and he is a past chairman of the Law Society of Kenya. The tribunal also requires two registered valuers of not less than ten years’ standing, a prominent businessman of not less than thirteen years standing; and a prominent farmer of not less than ten years standing. For these positions, Magdaline Mulwa, Tom Olweny, Alfred Lulu and Samuel Muciri W’Njuguna have been selected.
On 26 November 2008, the tribunal had its first meeting with the minister at his Ardhi House Offices in Nairobi, attended also by the Permanent Secretary to the Ministry of Lands, Dorothy Angote. While both Ojienda and the Minister of Lands were not yet ready to comment on the details of the discussions, the meeting was looking into ways of how to approach the acquisition of lands belonging to huge corporate entities in the country and the resultant backlash that is expected. The new tribunal is likely to be busy from the start:
Lined Up for Appropriations
Government is in the process of acquiring at least 450 parcels of land of varying sizes stretching from University of Nairobi to Juja Town in Thika District in Central Province. These are all prime properties, and conservatives estimates put all the land to be acquired at over KES12bn. “Most of this land is being acquired for the construction of the long awaited expansion of Thika Road, so you can be sure that the acquisitions are going to take place. If big businesses like Nakumatt supermarkets could come tumbling down, you can be sure that the government will find ways to get the land it needs,” an official conversant with the process said.
The acquisitions will indeed affect some of the biggest businesses in the region, learning institutions, leading clubs and government institutions: East African Breweries Ltd (EABL), the second largest tax payer in the country, is among big companies that will be affected. Others include lands belonging to the University of Nairobi, Kenoil/Kobil, Chevron Kenya Limited, Barclays Bank of Kenya, Kenya School of Professional Studies, Kenya Power and Lighting Company, Jomo Kenyatta University of Agriculture and Technology, and land belonging to the family of Jomo Kenyatta, the first president of Kenya. Muthaiga Golf Club, an inofficial power hub in the region, where some of the most powerful individuals in Kenya meet, is also set to lose land.
Unsurprisingly, the owners are putting up a fight. Among the big names that have already received notices from the Commissioner of Lands, stating that the Commissioner is ready to hear their compensation disputes, are East Africa Breweries, Muthaiga Club, Chevron Oil Kenya and the family of the first president represented by the former first lady, Mama Ngina Kenyatta.
Precedents
Judging from past experiences, the affected parties have a difficult battle ahead of them where the odds are hugely against them and in favour of the government: “When the government decides to compulsorily acquire your land, there is very little you can do about it,” explains Catherine Njuguna, a Nairobi lawyer who has helped the government in compulsorily acquiring land before while working at the Attorney General’s office. She points out that the compensation given by the government will most probably be below the market value and the courts are most likely to rule in favour of the government. “What you can do is challenge the compensation figure of the Land Commissioner at the tribunal and then take the money. It is not advisable for businesses to waste their time in court, if history is anything to go by,” she says, arguing that the courts are likely to maintain the same position as in a previous case:
In 1990, Mrs Njuguna acted for the government in a case where the government compulsorily acquired some pieces of land to enable the construction of a water dam to supply water to Eldoret Municipality, Kenya’s fifth largest town. Among the lands to be acquired was a 10.5 and 31.79 hectare pieces belonging to one Chelelgo Limo. After valuation, the government valued the grand total of the land to be worth KES854,170. In valuing the land, located in a fertile region, the government based its compensation on all the developments carried out on the land, and its arability. Mr. Limo, however, disputed the government’s valuation and hired two private developers who valued the land at KES2,318,976. Yet the courts sided with the government, noting that the creation of the dam was for a far greater public good that would incidentally also benefit Mr. Limo himself in the long run. The initial sum of K854,170 was therefore upheld.
No Compensation for Thika Road Demolitions
Although the planned acquisitions described above are also intended for the expansion of Thika Road, it is important to bear in mind the differences to the case of the demolitions in November 2008 and the impeding forceful acquisition of land. The land now targeted for acquisitions is land legally in the ownership of the affected parties and was acquired legally following all due process and procedures and contravening no developmental or growth prospects. Such acquisitions therefore, have to be done in regards to the law and compensation paid out to the affected parties.
However, the buildings destroyed in November were built illegally and the owners will not be reimbursed or compensated. Basically, the owners of the building that hosted, amongst others, the now demolished Nakumatt supermarkets should not have undertaken the construction on this particular piece of land. Any land surveyor could have obtained a copy of the map for the area and seen that the pieces of land bordering the road to a specific radius had been earmarked for the expansion of the road. This information should have also cautioned the current owners against the acquisition of the land in the first place.
Perspectives
Once the government earmarks a piece of land for acquisition, there is legally nothing that the owner can do about it. The courts, like many Kenyans, will favour the upgrading of the country’s dilapidated infrastructure as a better long-term investment for the country over the rights of corporates and individuals. While the amount of the compensation can be challenged in the tribunal, it will not be advisable to push such a case further by going to court since the courts are likely to uphold the tribunal’s decision.
The expansion of Thika Road is just one of many urgently required infrastructure projects to make Nairobi as a regional and business hub more functional. Even though still lacking in details, the Nairobi Metropolitan plans will include substantial infrastructure construction. One challenge for investors and business owners is to determine where e.g. new major roads and other infrastructure projects will be built. City planning in Nairobi and other urban centres has long been haphazard. Ideally, a business – or individual – acquiring land for construction should have some information about the long-term infrastructure plans so that they can avoid investing in a plot and buildings that they are likely to lose. In Kenya, this is far from transparent, and the historical problems with the reliability of the land registry and land titles add to this situation.
Public finances are another important consideration: Even if government just goes ahead with the appropriations described above just for the expansion of Thika Road, the costs to compensate the previous owners will be substantial. A conservative estimate is KES12bn at the least, in addition to the costs for the road construction itself. The current environment is not very supportive since the global financial crisis will slow down GDP expansion, the sovereign bond issue has been postponed due to unsupportive market conditions, and revenue collection has fallen behind target in a financial year when the budget deficit (on a commitment basis) has already widened from 1.8% of GDP in 2007/2008 to 4.4% in the current year. Equally, in a global recession, donor funding is likely to be less enthusiastic. Despite much talk of issuing local infrastructure bonds, does government still have the funds for ambitious infrastructure development? If not, will this slow down expropriations? Or does it mean that the previous owners will simply face a long struggle to obtain their compensation?
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