7.3.a Clarity and security of land and resource tenure and property rights

Rationale

This indicator provides information on land, forest and resource tenure, laws and rights. Clear title identifies rights and responsibilities under the law with respect to land and resources, while due process ensures that these rights can be protected or disputed. Lack of clear ownership or due process may hinder the active engagement of stakeholders in the sustainable management of forests, or leave forests vulnerable to illegal or unsustainable use.

Current state

New Zealand’s legal and administrative systems for the protection of private property rest on the English- law traditions of strict protection of property rights in land and interests in land. These systems have been progressively developed since the mid-18th century and successive governments have worked to provide landowners with certainty of tenure and legal redress in the event of contractual arrangements not being met. The current system is seen internationally as providing:

  • a secure system of property rights
  • a fair and efficient judicial redress
  • an efficient administrative system with a low incidence of corruption.

A stable and secure system of property rights (for both physical and intellectual property) encourages long- term investment, and borrowing for intensification or expansion. This has been seen across New Zealand’s primary industries, where investment in management systems, genetics and human capital has produced ongoing gains in production and productivity. This certainty of investment has been a major factor in New Zealand’s primary producers remaining competitive on the international stage and building their market presence in new and emerging products. In each case, owners had the assurance that they could loan against their property rights to improve production or enter into agreements to lease or manage properties.

New Zealand’s reputation for secure property rights has been a crucial element in attracting overseas investors and skilled labour. Both of these resources are scarce internationally, and they are becoming increasingly mobile. Investors look for certainty of property rights and an ability for arbitration and redress, when investigating opportunities outside of their home jurisdiction. These legal rights can sway the balance when companies examine countries with similar resource attributes. This point has been expressed by a number of overseas investors who purchased forestry rights or land in New Zealand during the 1990s and early part of this century.

Registering private property rights

Land registration in New Zealand is based upon the Torrens system, which records transfers (and other dealings involving the land) and provides a secure form of title. The system was introduced in New Zealand through the Land Transfer Act 1870.

The system provides for guaranteed certificates of title, along with a low cost and efficient method of conveyancing. The basis of the system has remained consistent over the past 140 years. In recent years, the system has evolved to include the electronic lodgement and registration of documents.

The current legislation governing land registration is the Land Transfer Act 1952 and the Land Transfer Regulations 2002. These statutory instruments are administered by Land Information New Zealand (LINZ), a government department. LINZ has oversight of the system and checks that all documents meet the legal requirements (including cadastral survey standards).

The Registrar-General of Land, based within LINZ, develops standards and sets an assurance programme for the land registration system.

Compensation for public works

New Zealand has a strong and well-developed law of compensation for public works. Land required for public works can only be acquired in accordance with the Public Works Act 1981.

Redress for property and contractual disputes

Disputes over property rights and contractual arrangements are addressed through negotiation, mediation and the courts system.

Civil disputes on property matters are frequently worked through by direct negotiation or mediation between the parties. A negotiated resolution can occur at any time during a case, but this most regularly takes place before formal proceedings.

The New Zealand courts system has evolved over the past 170 years, and includes a system of general courts and specialist tribunals. A Disputes Tribunal handles minor contractual claims, while claims of less than $200 000 are normally handled by the District Courts. Complex claims of over $200 000 are managed by the High Court. There is generally one right of appeal, from the District Court to High Court, or the High Court to the Court of Appeal.

Special tribunals include the Environment Court, which has civil and criminal jurisdiction over environmental matters covered by the Resource Management Act 1991. Appeals against Environment Court decisions on questions of law can be taken on to the High Court and the Court of Appeal.

Business environment

Internationally, New Zealand is viewed as one of the world’s least corrupt countries to operate in. A number of forestry companies have stated this as a key factor in investing in New Zealand.

For a new business or investor, a low incidence of corruption provides greater operating certainty and an assurance of secure property and intellectual rights. Corruption adds to the bottom-line cost of undertaking business in a country, from informal payments through to additional inspections and the expectation of free goods and services.

International assessments of corruption by Transparency International and World Audit both found a low incidence (or perceived incidence) of corruption in New Zealand. In their 2013 assessments, both organisations ranked New Zealand and Denmark as the least corrupt countries in which to operate. New Zealand’s low incidence of corruption stems from several inter-related factors, including no history of informal payments, an independent judicial system, freedom of the press and a strong commitment to the rule of law.

Trends

New Zealand’s property transfer system has been in place for 140 years and provides a secure, transparent system for protecting the rights of individual and multiple owners. The system is defined in legislation, and there is a well-established compensation regime for public works.

The system provides a high degree of certainty for landowners and prospective purchasers (both domestic and international). This certainty has been a significant factor in New Zealand attracting ongoing forestry investment over the past 20 years, both in the form of new planting and the acquisition of existing land and forest assets.

An important element in assessing the strength of property rights is the level of corruption within a country, as this can add to the cost of carrying out business. In international assessments,

New Zealand is perceived as having a low incidence of corruption. In 2013, New Zealand and Denmark were ranked as the least corrupt countries in two international surveys.

Trend Status

Data Quality H

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