Look before you legislate? The challenges facing restitution in Libya

by Rhodri C. Williams

It seems that plans are now afoot in Libya for a full-scale program of restitution of properties nationalized and appropriated under the Ghaddafi regime. Bloomberg reported yesterday that a law envisaging a two phase process will be rolled out as soon as next month:

Libya will announce a law that will return land and buildings expropriated by late ruler Muammar Qaddafi to the original landowners “within weeks,” a senior member of the Land Ownership Committee said.

“Phase one will return unused lands, empty shops, buildings and villas taken by Qaddafi’s regime and then by the rebels to the rightful owners,” said Fawzy Sheibany, legal representative for the committee, in an interview in the capital, Tripoli. “This will mean millions of dinars can be invested in construction projects and provide employment.”

Phase two of the new law involves rehousing families residing in buildings on expropriated land and could take several years to implement fully, he said. The Ministry of Justice will deal with individual cases through a civil court.

On the face of it, there is every reason to welcome this development. The Ghaddafi-era expropriations were ostensibly meant to further public purposes but became, by all accounts, an arbitrary means of both punishing enemies and rewarding those the regime favored. Moreover, the resulting legal uncertainty in property relations was cited (in 2004) by a leading Middle Eastern law firm as a key structural obstacle to legal reform efforts during the run-up to the uprising:

As a result of abolishing real property ownership for investment purposes, the commercial real estate market has been completely distorted. There exists now a private land market and a public land market with a price gap that creates considerable uncertainty for both foreign and local investors. Compounding the problem, the [1997] Foreign Investment Law is not clear as to whether real property can be used as collateral or even can be freely transferred without government approvals. The government has announced plans to reform the laws governing property and rentals, but their scope is uncertain.

Finally, perhaps the most convincing ground for pushing for quick legislative measures is the need for the National Transitional Council (NTC) to be seen to lead from the front. In the wake of Amnesty International’s widely publicized allegations of human rights abuses by ‘out of control’ militias in Libya, anything the NTC can do to stamp its legitimate authority on matters of broad public interest appears welcome. In fact, this is a particularly important issue in regard to property. Recent reports such as this one by the Guardian indicate that the militias have become part of a pattern of spontaneous restitution, often carried out by means of violent self-help.

So what, one might ask, is not to like in a bill that serves not only justice but also economic development and political consolidation? The answer is that if it is rushed through without consultation, this bill may actually have the opposite effect, generating new cycles of grievance, reducing legal certainty and even undermining the authority of government in Libya if it proves impossible to effectively and consistently implement. Perhaps the most cogent argument for a deliberative approach to restitution for the prior regime’s confiscations is that this is to some extent a constitutional decision rather than merely a legislative one.

Here, it is important to distinguish between property claims arising directly from the conflict (such as those related to the destruction of property and displacement resulting from the fighting for Sirte) and those arising from the acts of the prior regime. International standards and practice treat conflict dispossession as a human rights issue with political implications, asserting the principle that it should be reversed wherever this is practically and politically feasible. However, reversing the effect of longstanding nationalization policies may more readily be counted as a political issue with human rights implications. While such decisions must be undertaken in a manner that does not result in new human rights violations or exacerbate old ones, states retain broad discretion over how to regulate property relations in order to achieve their political and economic objectives.

As a result, in transitional settings such as that in Libya, the disposition of the nominal rights in property throughout the country that the TNC has ‘inherited’ from the Ghaddafi regime must be seen as part of a broader constitutional process of recalibrating the balance of rights and duties between the new Libyan state and its citizens. Indeed, pending the adoption of a new constitution and a transition to democratic governance, the TNC may be well-advised to be wary in undertaking such a profound intervention into the rights of ordinary Libyan citizens. There is no doubt that the effects of Ghaddafi-era confiscations must be addressed, but the specific policy prescription made in this instance – that they must be undone entirely – poses significant risks without the benefit of having resulted from a process of a clearly democratic (or even a deliberative) nature.

So what risks could a full-blown restitution program hold? Here, it is important to step back from the demands of abstract justice and consider the concrete implications of summarily reversing tens of thousands of property transactions that occurred from the mid-1970s until just six months ago. From a human rights perspective, it is important to recall that the European Court of Human Rights has refused to endorse such drastic measures even in the case of Cyprus, where the impugned property confiscations resulted from an invasion of a clearly internationally wrongful nature. The crucial factor in the Court’s 2010 Demopoulos decision was the fact that occupants of claimed properties had acquired rights of a domiciliary rather than a proprietary nature that nevertheless precluded their summary mass eviction.

In  other settings involving clearly wrongful confiscations such as post-apartheid South Africa, balances were struck that departed from a recognition of actual property rights on the part of the occupants of such property that could not be ignored but could be overridden by rightful claims. In many Eastern European states, transitional restitution programs recognized property rights on the part of bona fide purchasers of nationalized property, allowing them to retain possession while affording compensation to pre-nationalization owners. While the European Convention of Human Rights does not apply in Libya and the situation there must be judged on own merits, the emphasis should be on ‘judged’. In the current situation, the large proportion of Libya’s population that would see their daily lives upended by a full-on restitution program has not had a clear opportunity to air their concerns.

One might argue that such niceties cannot apply to a situation on the verge of chaos, in which clear rules and forceful government action are desperately needed. However, the cost of ignoring them may be higher than anticipated. At the current time, there seems to be little evidence regarding crucial factors such as:

• how many of Libya’s poorest and most marginalized citizens may be housed on nationalized land;
• how many confiscated properties have been sold on to bona fide third parties for value, and how their ownership claims should be evaluated;
• how many nationalized properties have been permanently altered through the construction of buildings or infrastructure that may serve important public purposes;
• how many nationalized properties have been significantly improved by domestic or foreign investors with ongoing claims based on their investment; and
• how many ostensibly vacant nationalized properties are in fact occupied by populations that would be rendered homeless and destitute if evicted?

Given that many of Libya’s property records were destroyed in a 1982 fire, there is a scant documentary basis for beginning to explore these questions, underscoring the importance of grounding the resolution of the issue on a consultative process. Libya’s oil revenues can facilitate a modulated approach in which parties not deemed entitled to remain in – or reclaim – possession of disputed properties may be provided with just compensation. However, the first and most basic government undertaking related to such a program, namely budgeting for its cost, cannot be undertaken in the absence of reliable data.

Moreover, there is a clear underlying risk that peremptory restitution will feed the impression of victors’ justice in Libya. One of the less remarked upon findings of Amnesty International’s recent report related to retaliatory displacement of alleged Ghaddafi supporters from their homes. Strict application of international standards on internal displacement would argue that mitigating such ongoing human rights issues should be the immediate priority of the TNC. In this context, focusing on a nationwide denationalization process may not only divert attention from the plight of conflict and post-conflict internally displaced persons (IDPs) but also place them in further jeopardy.

Many IDPs are currently located in provisional settlements on sites that may already be subject to claims by returning foreign investors (such as a recent Chinese delegation). By announcing a policy of full restitution, the TNC may increase the pressure on IDPs to leave such sites from local communities as well. While IDPs do not have an absolute right to remain in a particular place of shelter, the TNC is responsible for protecting them against arbitrary evictions. Given concerns recently expressed by the UN about the basic physical security of IDP settlement residents, the risk that the announcement of a restitution policy may further exacerbate their situation should not be discounted. Even though this announcement evinces the intent of the TNC to assert control over the issue, it may nevertheless increase the incentive to resort to private self-help in the short run.

None of this is to say that restitution is necessarily the wrong step. It is also commendable that the TNC has recognized the centrality of addressing violations of property rights by the former regime to its prospective goals of democratic rule of law and economic development. However, the property question in Libya should be seen as both part of and reflective of the broader balance that must be struck between speed and inclusiveness in arriving at a new constitutional order. Writing for USIP, Jason Gluck argued that extending the current timeline for constitutional negotiations in order to allow broader consultation could “lead to a more legitimate constitution that better reflects the needs and aspirations of the Libyan people, help promote trust and reconciliation after the fall of the Qaddafi regime and strengthen Libya’s national identity.” Allowing the property issue to explicitly be resolved as part of the same transitional process and based on similar principles would contribute to its just resolution.