economy

Martinelli administration backs away from island and coastal property law
by Eric Jackson

This past April 24, Law 23, about land tenure on islands and along the coasts of Panama, nominally went into effect. It would allow people with rights of possession in such places to cheaply obtain titles to their land, but subject to a 30 percent sales tax for the first sale after obtaining property in this way. It would also allow those without prior possessory rights --- people, to be sure, but mostly corporations or groups of corporations --- to obtain island and beach land belonging to the government for prices starting at half a cent per square meter. The law recognizes collective ownership of property within the indigenous comarcas but does not recognize other traditional rights to property tenure --- for examples, the collectively held lands of an indigenous community outside of a comarca; a long-established fishing village built on a beach too close to the high-water line to be constitutionally owned by anybody; or a community's long-standing shared easement for a road or a path to the beach.

At the time that the law, which was championed by deputy Friedi Torres (PRD-Veraguas) was debated in the National Assembly, the opposition mostly had nothing to say and factions of the PRD continued a long-running turf battle between Catastro (part of the Ministry of Economy and Finance) and Direccion Nacional de Reforma Agraria (part of the Ministry of Agricultural Development) for control of the process. Over the past five years Catastro, the official government surveying office, has certified the existence of only 12 parcels whose owners have rights of possession out of some 5,000 requests for this service. But Reforma Agraria has since its inception developed a sordid reputation that has nothing at all to do with agrarian reform but with giving away land that might or might not have people living on it or prior claimants to the wealthy and politically connected.

The most notorious example of beach front land corruption during the Torrijos administration was the way that a corporation owned by the president's cousin, Rodolfo "Charro" Espino, obtained 26 hectares of beach front land in Chame from Reforma Agraria for less than a penny per square meter, jumping ahead of a local man who had put in a request for the same land years before. (This property Espino added to an adjacent 29-hectare parcel that he had earlier obtained from Catastro for 5¢ per square meter.) There was a mangrove swamp on the property --- wetland that can't be legally transferred to a private person or entity due to its importance to the marine food chain --- which Espino cut down and landfilled. Espino is now appealing a conviction for that environmental crime.

Torres? He's a notorious master of legislative sleight of hand. His previous adventure was to, at the behest of large tuna fishing enterprises, insert a repeal of the ban on purse seining in most of Panama's Pacific waters into an unrelated law. When the environmentalists found out there was hell to pay, and the beach and island law was his election season ploy that contained a promise to tens of thousands of island and beach property owners who held by right of possession that they would get titles to their land.

And what did the ultimately successful presidential candidate, Ricardo Martinelli, have to say about all of this at the time? He said that he supported the titling of rights of possession land, but stopped just short of an explicit endorsement of what Torres was doing. The parties of the Martinelli coalition were a feeble opposition in the Torrijos years and went along without objection or very much of anything to say, as they did with almost everything that the PRD majority pushed through.

Torres and the people supporting the legislation bussed in their delegation of campesinos to say that they want titles to their land, assurances were given that indigenous lands would be unaffected, and the main voices in opposition came from three general directions. The left, the FRENADESO labor/left umbrella group in particular, complained that the island and coastal land law would result in the giveaway of valuable public lands to wealthy interests. Some critics from indigenous communities outside of the comarcas expressed fears of dispossession in favor of resort developers, and in this they were seconded by FRENADESO's largest component, the SUNTRACS construction workers' union, some of whose members live in fishing villages coveted by developers. Some environmentalists expressed concerns of inappropriate development along the beaches and the privatization of heretofore public recreational areas.

One Susan Guberman Garcia got onto the English-language email groups to mobilize support for the law, arguing that foreigners who owned rights of possession land in Bocas del Toro would be better protected with titles and attributing the law to a team of private lawyers rather than Torres.

The law passed and was published in the Gaceta Oficial the week before the elections, but President Torrijos left office without having promulgated the regulations needed to carry it out.

In comes Martinelli, who has pledged to title --- and although he doesn't say that part of it, in most instances tax --- all right of possession land in Panama during his five-year term. It's what you'd expect from a conservative businessman who both believes in private property and pays attention to the revenue sources of an enterprise he's running.

Martinelli's Minister of Economy and Finance, Alberto Vallarino, is another of Panama's wealthiest businessmen. After having sold his banking interests, he has in addition to his political activism been concentrating on his hotel and resort holdings, which include the upscale Bristol Buenaventura resort on the beach in Cocle province.

As the new administration was taking inventory of the problems and unfinished business that it had inherited, Vallarino heard tales of irregularities, corruption and inefficiency at both Reforma Agraria and Catastro, and took note that the regulations to implement Law 23 had not been issued. Meanwhile, attorney Samuel Velásques Díaz sued in the Supreme Court, alleging that Law 23 is unconstitutional for several reasons. Vallarino had his ministry file a brief supporting the plaintiff's position. The Martinelli administration let it be known that so long as this issue is pending before the courts, no implementing regulations would be forthcoming. Vallarino hinted that whatever the courts decide, Law 23 is going to be revised.

Now people might read all sorts of motives into Vallarino's attitude about Law 23 --- that he'd like to prevent competition for his private business, that he's too rich to sympathize with small property owners who want title to their homes and farms, if one wants to be uncharitable, or that he's a hardcore businessman put in charge of the public till and defending the nation's pecuniary interest as zealously as he can, if one cares to make a hero out of him.

Vallarino's announced reasons are that behind the law there is an intention to strip the nation of valuable properties at unreasonably low prices. On the continuum between a half-cent and 1.5¢ per square meter, the law provides that in the event of any dispute over price, a panel composed of one government representative and two representatives of the party or parties involved would set the price. "The mice setting the price of the cheese" was how Vallarino described it to La Estrella.

In the background of all of this, at various places around Panama the nation was witnessing the effect of the Torrijos administration's assumptions that were built into this law. Along a beach in Freidi Torres's circuit in Veraguas, an American-owned corporation that believes that it has a resort development concession fenced off a 10-kilometer stretch of beach, enclosing the homes of more than a dozen families, most of whom had perfected squatters' rights, and blocking long-used public accesses to the beach. In a case far from the coasts, a cattle rancher blocked off a Chiriqui highlands road used by the public for at least 80 years, confining an elderly American couple in their home. It was reported in El Panama America that of some 30,000 coastal or island properties, developer corporations or consortia hold or claim some 3,000.

Supporters of Law 23 mobilized members of a PRD-created consultative council to "prove" that the nation's farmers want the law implemented.

But El Siglo publisher Ebrahim Asvat, who served as chief of the National Police during the Endara administration, sided with Vallarino. Asvat noted that along with the promise of titles for ordinary folks, there was a land sale scam element in Law 23.

Writer Richard Koster opined in La Estrella that Law 23 should be implemented and argued that Martinelli was letting one of his ministers "sabotage one of his pet projects" and thus setting a very dangerous precedent for the rest of his administration.

This reporter opposed Law 23 when it was being debated and afterwards, mainly out of concern that the residents of long-established indigenous communities and fishing villages would be dispossessed and also out of mistrust of anything with Freidi Torres's fingerprints on it.

In defense of Law 23, Susan Guberman Garcia blasted this reporter as follows:

You're blinded by your own extreme ideology (and I do mean EXTREME, because every organization considered "liberal" and "progressive" is in favor of titling) by labeling myself and all the other people who showed up by the HUNDREDS to support the titling bill as having the intent to "strip indegenous communities of their most valuable properties." Wrong. The hundreds of Panamanians who attended these hearings were there to PREVENT their land from being seized. Many of them were victims of corrupt land scams. Like the CD candidate for mayor of Bocas, who happens to be a friend of mine, whose own ROP land was stolen by a mega corporation with the aid of a whole bunch of guvvies and his own (former) lawyer who jumped ship and went with the higher bidder.

You didn't bother to attend the hearings, unfortunately, so you didn't get to see and hear any of them. And the small number of foreigners who attended one or more of the hearings, like myself, were mostly small scale property owners from Bocas and other island coastline areas who want to title the property they've been living on for years. And the lawyers who originally wrote the bill, by the way, don't represent big developers and landowners, they mostly represent small holders, both local and foreign. My attorney happens to be one of them.

And if the titling bill was a "PRD ploy" then how come Martinelli was an enthusiastic supporter and how come he appointed as head of PRONAT (the organization that will play a primary role in the titling process) someone who is a strong supporter of titling? Martinelli and his new majority promptly got rid of a whole bunch of last minute "PRD ploys" as soon as they took office. But they didn't try to reverse the titling bill, because they support it. Will there be some PRD legislators in a position to benefit (because they own island or coastal land)? I'm sure that's the case. Otherwise, they probably wouldn't have even bothered to carry it.

Once more, its Eric Jackson vs everybody else. And all the name calling ("you evil despoiler of the indigenous, you!!!") doesn't change that.

And, by the way, you left out another reason why Torrijos signed the bill, even though it didn't contain some of the stuff he wanted and why Martinelli supports it (besides the fact that he is a believer in property rights): Panama is in need of a lot of international money right now, and all the economic think tanks consider titling programs very important. Titling and transparency are big issues for international lenders and grant makers.

(Sic. And she repeatedly misquotes this reporter to boot, in the first place by attributing her misspelling to me and in the second inventing something I never said or wrote.)

Ah, yes --- Alberto Vallarino and FRENADESO have come to the same conclusion about something, and the Martinelli administration isn't implementing Law 23 like Susan Guberman Garcia and the PRD want it to. It must be obvious to folks like her that Hugo Chávez has taken over the Panamanian government.

But notwithstanding Law 23's fate, Martinelli still says that he's committed to giving everyone who holds property by right of possession title to that piece of real estate and that can be done without the law in question. We should also have no doubt that at the end of the process, some of the people who get the titles they have been demanding --- probably American tax refugees loudest of all --- are going to then complain about having to pay taxes on their now-titled land.

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