Levelling the Playing Field: Strengthening Common Property in Honduran Legislation

Honduras is a very small, but highly biodiverse Latin American nation whose natural resources are worth preserving. Almost half of the country’s surface is still covered by forests and a quarter of it has the legal status of protected area.¹ However, as this developing nation of eight million people faces development pressure, the question arises as to which is the best way to manage natural resources—privately or commonly?

Regardless of being owned by an individual, a group of people, or the State, a natural resource still faces the risk of being managed unsustainably and inequitably. No property rights system is intrinsically efficient; cases of failure, as well as success, exist for each of these property regimes.² Hence, if no superiority of one particular form of ownership over another can be justified,³ why has much of the world today decided to rely on private markets as their dominant form of resource allocation?

A key factor contributing to the supremacy of private property is that the conditions favoring common ownership have been weakened or eroded over time. Policies and national legislations have played a specific role in the decline of common property regimes. State laws have failed to codify customary common-property institutions, or have eliminated them by land reform policies that favor individual and government ownership.⁴

Honduras is one of the countries whose legal framework has discriminated against common property, but despite this biased environment, several local communities have reacted against it. These communities in central and northern Honduras have created what several scholars refer to as ‘Common Asset Trusts.’⁵ In this particular case, the trust (although communities do not formally name it this way) is established at a local level and seeks to protect the watersheds of one or several villages. Through collective efforts, locals raise enough money to buy off ownership or land-use rights from upstream holders located in their catchment area. The acquired land is set aside under protection measures, and as an asset owned by the entire community. The incentives behind this community initiative are simple: they wish to protect the water supply of their current and future generations. However, specific legislative reforms designed to support common-property regimes, such as these local trusts, are still needed in Honduras, as the discrimination against them has been considerable.

The Undermining of Common-Property Systems

Resources can be effectively managed under common property regimes if cooperative institutions that establish rules and assure compliance exist.⁶ So why do private and state property regimes enjoy a privileged position in the land regulations of many countries? Colonization is a key factor that cannot be overlooked. In colonized countries like Honduras, colonialists often dismantled communal property institutions and systems as a prelude to the establishment of their colonial economies.⁷ Honduras has inherited almost its entire legal framework from its colonizer country. The doctrine of jura regalia, by which the Spanish Crown proclaimed itself as rightful owner of the Honduras territory and its resources in the 1500s, remains enshrined in today’s republican system. The current Honduran Constitution grants the state ownership rights over all land, water, forest, and mineral resources that are still not privately owned.⁸ Furthermore, some laws established the clearing of state-owned land as a valid mechanism for individuals to stake a claim and ultimately obtain a title deed over it. Thus, the discrimination against the traditional collective property system in the country’s legislation is evident.

A more recent factor that undermined common property systems worldwide was the incorrect interpretation of Garret Hardin’s influential article, “Tragedy of the Commons.”⁹ In his paper, Hardin was actually describing the failure of an open access resource—one where no restraint exists for anybody who wants to use a resource—a situation that can lead to its overuse and degradation. On the contrary, a common property regime entails controlled access and regulations between its users in ways that promote the sustainable use of the resource. However, Hardin’s arguments have been incorrectly used to equate common property systems with open access regimes, and thus legitimize land policies that favor individual and state ownership.¹⁰

Since the 1960s, land distribution programs have been one of the main policies implemented by Honduran governments to tackle the poverty and social vulnerability suffered by the majority of the population. Yet neither the agrarian reform in effect until the early 1990s nor the individual land titling programs implemented afterwards were able to eradicate the country’s endemic land tenure inequalities. For instance, in the northern valley of Aguán, which is one of Honduras’ most fertile agricultural lands, latifundios, or extensive parcels of privately owned lands, have increased considerably since the 1990s, and so has the number of poor farmers without land in the area.¹¹

The ‘legal’ privatization and expropriation of common property systems has represented an ideal complement to neoclassical economics which claims that competitive markets are needed to achieve greater investment, economic efficiency, and growth.¹² Individual land titling programs implemented by various national governments around the world (many with the support of international development agencies) were considered a necessary step to achieve these desired competitive markets. Yet, the land privatization policies have had limited success in accomplishing their intended objectives.¹³

In the case of Honduras, more than 60 percent of its territory is covered with rugged mountains. Only 15 percent of the country’s land qualifies as arable land, which, like the Aguán Valley, largely consists of latifundios. Many Honduran rural families live a marginal existence in the degraded slopes of the country’s mountainous interior.¹⁴ It is no surprise then that a large portion of the individual plots allocated through the land privatization programs are so small or marginal that poor landholders cannot significantly benefit from them or are unable to retain them. Likewise, land measurement, titling, registration, and transfer have imposed high transaction costs on small landowners. Conditions of inequality were, in some cases, aggravated as a result of these land policies; people with greater resources and connections were able to obtain ownership documents while others were excluded. Furthermore, private banks may still not consider these landholders as creditworthy, even if they possess a land title.¹⁵ Consequently, individual land ownership and markets may prove inadequate to deliver the efficient, sustainable, and equitable outcomes that society pursues. For certain resources, common property regimes may provide better results than private ownership.¹⁶

Local Common-Asset Trusts for Watershed Protection in Honduras

The land tenure regime present in a watershed could play an important role in the success of a watershed management policy.¹⁷ One study reveals that after the implementation of a watershed development project in North-East India, areas under a community ownership system had produced more positive changes in land-use patterns than the watersheds under an individual property regime.¹⁸ Comparative studies such as this do not exist for Honduran watersheds. However, the efforts of several rural communities in the country towards managing their local or micro watershed areas under a common property arrangement have increased. A reason for this increase could be that local watersheds are considered a resource in which collective action and common ownership are easier to implement.¹⁹

The types of Common Asset Trusts implemented by some Honduran communities oppose the State land policies that have transformed collective property systems into individual landholdings. In fact what communities do is revert this process by transforming private landholdings into an asset that belongs to all members of the village. Through commendable efforts, a single community or a group of communities collect the funds needed to buy off ownership or land use rights from upstream landholders located in their micro watershed area. In many cases, these upstream landholders also belong to the community; thus, the transaction costs of negotiating the deal, and sometimes even the land sale price, are reduced. Once the property rights for the area have been acquired by the community, a set of rules is designed for its management.

Specific rules can vary between communities but the following general rules are present in all cases: 1) the acquired land is considered a common property asset and must remain as such so it can benefit the community’s future generations; consequently, the area cannot be sold and no individual ownership right can be granted over it; 2) the land is set aside for watershed protection; activities within the area that can affect this function such as farming, grazing, and logging are regulated or even banned; and 3) a legal entity, which is usually the local Water Management Board, is entrusted with the management of the asset. The law allows this community organization to manage funds, implement projects, and execute any contracts necessary to fulfil its mandate. Yet, since the asset was acquired using community funds and for the purpose of providing a common good, the water management board (or any other community organization acting as the trustee) will be held accountable for any violation of their responsibilities.²⁰

Despite the advantages that these common local trusts may provide at the micro watershed level, optimal hydrogeological management also requires coordinated actions at the macro watershed scale.²¹ Collaborative arrangements are also needed to promote interaction and coordination among micro watershed management bodies located within the larger macro watershed.²² The new Honduran Water Law mandates the creation of watershed councils at the village, municipality, state, and national levels.²³ These types of nested institutions are important for coordinating actions at all relevant scales. However, to this day, only a few councils have been organized. In fact, large portions of the new Honduran Water Law are still not being implemented. The activation of these water councils could enhance the protection of existing common watershed trusts and promote the creation of new ones.

Mechanisms for Legally Strengthening Common-Property Regimes in Honduras

Over the last decade, the Honduran government has passed new regulations that are more supportive of common property systems. The new Forestry Law, approved in 2007, gives a preferential right to local communities to manage state-owned forests through community forest management schemes. Before this regulation, most public forests were auctioned off to timber companies. Likewise, the Property Law of 2004 recognizes the communal and inter-communal mechanisms of collective ownership that finally codified (to some extent) the customary tenure systems of the country’s indigenous peoples. However, these types of reforms were not something Honduran society accomplished easily. For instance, the approval of the Forestry Law involved a long process of multi-sector public discussions that extended over three presidential periods and over 10 distinct bills. The sanctioning of the final law after 12 years of discussions was celebrated as a success of civil society participation.

Despite these positive advances, further legal reforms are still needed, especially for the protection of institutions like local common watershed trusts. First, a fundamental reform is required at the constitutional level. The Honduran Constitution clearly states that private property rights will be respected and protected, yet no equal statement is made about the protection of common property rights.²⁴ Common property rarely enjoys the same degree of support in law or prompts the same response from government authorities as private property.²⁵ The Honduran Constitution must clearly acknowledge that other legitimate forms of resource ownership and management do exist and that all will enjoy equal protection under the law.

Likewise, common property regimes without documented legal backing will continue to be exposed to the risks introduced by even the best intentioned government initiatives.²⁶ As a result, formal titling and registration of indigenous and local common property systems is needed to better protect them from competing claims. This documentation and registration has to be done with the previous consent of communities and by accommodating the State laws to the customary tenure systems and interests of the indigenous and local groups. Indigenous communities should not be forced to modify their traditional land institutions and norms so that they can comply with the recognition requirements imposed by State legislations, which are largely grounded on colonialist legal principles.

Reforms are also needed in the country’s national cadastre. This important land database should contain information that goes beyond the boundaries and legal identifiers of the country’s land parcels. The ecosystem services provided by common property areas (and all other property systems) should start to be incorporated in the national cadastre, even if it is at a basic level. This approach can help us value the environmental, cultural, spiritual, and social roles of land, and not only its legal and economic-market function, which are the only aspects currently reflected in the national cadastre.

Finally, adopting a rights-based approach is crucial for strengthening common property regimes. If individual private ownership was largely promoted in the name of market efficiency, a similar mistake should not be made by encouraging the protection of common property systems in the name of environmental conservation. Communities must hold the right to choose how they want to own and manage their land resources.

A Pluralistic and Inclusive Land-Tenure Legislation

I can still remember the conversation I had a few years ago with a village elder of a community that wanted to create a common-asset trust to manage their watershed. For him, as well as for the majority of his community members, a vital and sensitive resource, like water, should not belong to a single individual because that is not only dangerous, but unfair. I told him about a particular case in which the Honduran Supreme Court granted a USD $1 million compensation to an individual who privately owned an area where a spring that supplied drinking water to several communities was located. This landowner was against the land-use restrictions that the Forestry Agency had imposed on him in order to protect the quality of the water for downstream communities. He argued before the Court that such restrictions violated his constitutional right to private property, and the judge agreed with him. The village elder vehemently reacted: “You see, [it is] because of cases like that one that we want our watershed to be owned by the entire community and not a single person, but we are afraid that even if we do raise the money we need to buy off the land-use rights, someone might still come tomorrow saying the land is theirs because they’ve managed somehow to get a private property title over it, and we know that, in this legal system, the ones who have documents, even if they do not have the real rights, will always win!”

After listening to the elder’s views, I could not help thinking that reforms that better protect the common property rights of local and indigenous communities are needed, particularly if they involve resources upon which their livelihoods greatly depend, such as water and forests. Certainly, common property systems are not a panacea for poverty alleviation, sustainable forestry, or watershed management and they may be inappropriate to implement in different contexts. Honduras’ legal framework should be pluralistic, adaptive, innovative, and above all inclusive. It should not undermine common property regimes in order to privilege other property systems that are just as imperfect. Whether private, state, or common property (or even a hybrid between these tenure systems), they all have an important role to play in sustainable resource management. I am only advocating for a levelled playing field.

References

1. Instituto Nacional de Conservación y Desarrollo Forestal, Areas Protegidas y Vida Silvestre (ICF) (National Institute of Forestry, Protected Areas and Wildlife Conservation and Development). Anuario Estadístico Forestal 2013 Honduras (Forestry Statistical Yearbook 2013 Honduras). Government of Honduras, Tegucigalpa [online] (2013) www.reddccadgiz.org/documentos/doc_1199314319.pdf.
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20. Decree No. 253-2013, Ley de Patronatos y Asociaciones Comunitarias (Trusts Act and Community Partnerships). Government of the Republic of Honduras [online] (2013) http://www.tsc.gob.hn/biblioteca/index.php/leyes/535-ley-de-patronatos-y-asociaciones-comunitarias.
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23. Decree No. 253-2013, Ley de Patronatos y Asociaciones Comunitarias (Trusts Act and Community Partnerships). Government of the Republic of Honduras [online] (2013) http://www.tsc.gob.hn/biblioteca/index.php/leyes/535-ley-de-patronatos-y-asociaciones-comunitarias.
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25. Arnold, JEM. Managing forests as common property. FAO Forestry Paper 136 [online] (1998) http://www.fao.org/docrep/w8210e/w8210e00.htm.
26. Arnold, JEM. Managing forests as common property. FAO Forestry Paper 136 [online] (1998) http://www.fao.org/docrep/w8210e/w8210e00.htm.