Article 26 of the Ugandan Constitution enshrines the right to property and the protection from deprivation of property, subject only to the prompt payment of fair and adequate compensation prior to taking possession of the property. This provision was underscored by the Supreme Court ruling, in Uganda National Roads Authority v Asumani Irumba, that before the compulsory acquisition of land for the development for government projects is effected, the property owner must receive prompt payment of fair and adequate compensation. Accordingly, the Supreme Court nullified a provision of the Land Acquisition Act (Cap 226), which permitted the government to take possession of land upon the making of an award for compensation, but before payment.
In practice, the government has experienced long delays in implementing public projects and has incurred huge costs arising from disputes over the valuation of land compulsorily acquired.
The Constitution (Amendment) Bill, 2017
In order to address these delays and costs, the government proposes to amend article 26 through the Constitution (Amendment) Bill, 2017, to provide for payment of compensation amounts into court where a property owner disputes a valuation. It is further proposed that upon payment into court, government be empowered to immediately take possession of the land.
The Bill is silent on when the property owner would be paid any additional valuation sum awarded by the court, and if the owner would have priority over existing judgment creditors against the government, or if they would join the back of the queue on government domestic debt.
Considerations for an improved remedy
The delays in infrastructure projects arising from valuation disputes are apparent. While there is certainly an ill to be cured, the government’s prescription requires further consideration.
Firstly, administrative and procedural mechanics of compensation are not matters for the Constitution, but rather for implementing legislation. The Land Acquisition Act already provides for the mechanics of compensation and further empowers the Chief Justice to make rules for implementation of the Act.
Secondly, the proposed amendment does not address protection of property rights recognised in article 26 and whether there would still be constitutionally guaranteed freedom from deprivation of property without compensation. The government’s taking possession of land should also await determination by the court.
Thirdly, the situation is not clear for lenders who take security on property that ends up being acquired by the government and who face a dispute over valuation. This uncertainty is worrisome as the government looks to implement massive infrastructure projects to exploit its oil reserves and as Uganda seeks to attract the private sector to participate in and revamp the country’s infrastructure development under the Public Private Partnerships Act, 2015.
Achieving the government’s objectives
To achieve its objectives, we recommend that the government consider the following.
Firstly, let the Constitution be. There must be prompt payment of fair and adequate compensation prior to government taking possession of the property, as well as a right of access to the courts by an affected person. This is an international norm that resonates in other jurisdictions and is essential to attracting investment.
Secondly, the focus should be on amending the outdated Land Acquisition Act. The reform priorities should enhance the integrity of the valuation process and expedite appeals from contested valuations. A valuation dispute is technical and is capable of resolution by expert testimony. It does not require a long trial.
Thirdly, it would be worthwhile looking at Rwanda’s Expropriation Law, 2015, which provides a comprehensive and time-bound balance between public interest and private property rights. This includes providing for public participation in the expropriation process, a right to contest valuations, tight time frames for the court to resolve disputes and recognition of spousal and lender rights.