1Land tenure is a social construct and usually manifests as a set of rules that regulate how land rights are allocated among members of society. These rights are myriad, but the main ones relate to the right to use, transfer, alienate the property and to exclude others…. Relationships between the rights and those who hold them can be complex and difficult to identify, particularly if the rights are unregistered.1The international financing institutions (IFIs) typically require that those who have a claim to land recognized or recognizable under national law are eligible for compensation at replacement value if their land is involuntarily acquired under the development projects the IFIs finance, even when they do not have formal legal rights to the land in question. The challenges to fully implement this requirement are numerous. Identification and confirmation of unregistered tenure rights are time consuming and complex. Formally recognizing ‘legalizable’ land and tenure rights is not a straightforward process and neither is the proper compensation of such lands and tenure rights. The problem is further compounded if the land is customarily occupied with unclear boundaries, overlapping claims, and political economy issues.Market valuation is the cornerstone of the current valuation practice, but this alone may not achieve adequate compensation for expropriation. The ‘market value’ is a value where properties exchange hands based on a willing-seller willing-buyer transaction, unlike involuntary land acquisition where the buyer, the state, has the power of eminent domain. Other concerns, such as disturbance, special value to owner, injurious affection, severance, and solatium allowances, may be needed to achieve the core principle of compensation, to leave the persons affected no worse off than they were before the expropriation.2 Recent efforts to develop methodological guidelines on the valuation of unregistered lands illustrate the complexity (for example, UN Habitat, 2021).1 UN Habitat. 2021. Valuation of Unregistered Land. A Practice Manual. Nairobi.2 McDermott, M., P. Wyatt, and K. Aslama. “An Introduction to The Manual for the Valuation of Unregistered Land.” PowerPoint presentation.VALUATION AND COMPENSATION OF UNREGISTERED AND CUSTOMARY LANDSPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized2The study comprises cases studies compiled from Indonesia (3), Sri Lanka (2), Uganda (3), Nepal (1), and Afghanistan (1). The case studies (summaries annexed) reflect public investment projects where land-for-land or cash compensation was paid or monetary support provided for compulsory acquisition of unregistered and customary land and tenure. The definition of eligibility and valuation methodology used by valuators in response to specific project contexts is presented, along with the solutions to pro...
