Compensation for Orang Ash Native Land in Malaysia: the Perceptions and Challenges in Its Quantification

Compensation for Orang AsH native land in Malaysia: The perceptions and challenges in its quantification

Anuar Alias and Md Nasir Daud

Centre for Studies of Urban and Reg iona l Real Estate Faculty of Built Environment University of Malaya

Abstract

This paper describes the results of an investigation on the challenges confronting valuers in dealing with the assessmen t of compensation for Orang AsH native land (OANL). In Malaysia, valuers are often ambivalent about assessing the worth of Orang AsH property rights; this is because the conventional valuation toolkits are 'ill-equipped' to cope with the multi-faceted issues involved in valuing such lands. Orang AsH view the worth of their lands from a multitud e of dimensions (spiritual, cultural, communa l and economic), and this often takes the value consideration far beyond that contemplated by private registered land owners. The study also looks into the compensation for native titles in o ther countries and draw s local parallel to the problem. The key issu es that have been identified include the valuation approaches; land rights; monetary and non monetary co mpensa tion; legal framework and; negotiatio n for compensation. These lead to the recommendation that the compensa tion issue for Orang AsH native land is need of a legislative reform .

Keywords: Acquisition, Orang Asli landrights, compensation, chaliet/gesl valuatioll approaches

Introduction interests conferred to a group settlement The purpose of this paper is to report gran tby the Land (Group SettlementAreas) the results of a preliminary survey that Act 1960 in which the rights, although has been undertaken to elicit perceptions imp aired, are not totally extinguished . amo ng the va rious groups involved Neither do these interests exist under the in determining the compensation for traditional laws and customs (Nik Yusof, Orang Asli native land . The valua tion 1996; ]afry, 1996). There fore, it is necessary of compensation for the partial or total to establish the Orang Asli land righ ts as extinguishment of Ora ng Asli (the high ligh ted in Adong Kuwau (1997) and Malay term for the ind igeno us peoples Sagong Tasi (2002) as well as native title in Peninsular Malays ia) property right s rights as emphasised in The Wik Peoples represents a grey area in valuation practice v The State of Queensland & Ors; The in Malaysia. Thayorre Peop le v The State of Queensland The issues with regard to the & Ors (Wik, 1993). assessmentofcompensation for OrangAsli The re are precedents relating to native land concern the interests of such the compulsory acquisition of, and land, which confer differing level of rights compensation for, lesser interests in land. from the ones enjoyed by a titled land. The Spencer principle remains app licable These interests are even lesser than the whereby compe nsation is assessed on

63 ]ollmalof Desigll alld tlie BuiltEnoironment the basis of the amount a willing buyer How is the extent of compensation to would pay a willing seller for the interest be measured? (Spencer v Commonwealth (1907) 5 Is there a need for legislative reform CLR 418). There are examples of courts to address the problems? assessing compensation involving loss of leases, easements, licences, riparian rights, Opinions have been expressed fishing rights and even the right to dig for by various quarters on the issues and worms for bait (Cobbo, 1993). Similarly, proposed solutions mostly come from the courts developed methods for valuing legal and land valuation discourses, which lesser native title interests under the Native are often pursued within highly charged Title Act 1993 (Australia) (Smith, 2001). contexts of resource development or court These would provide useful references for litigation' (Gardner, 1998; Sheehan, 1997, valuing Orang Asli native land in Malaysia 1998; Nicholas, 1997). Not surprisingly, for compensation purpose. many parties are looking for the elusive This paper is divided into three parts. formula or standardised procedure for the In Part I, we review the rights and interests calculation of compensation. attached to Orang Asli of their native land. In Part II, we look at existing frameworks Rights and Interests of Orang AsH Native in the compensation of Orang Asli native Lands land together with a review of the current Precisely what rights and interests do framework for the valuation of OANL. Orang Asli have over their native lands? In Part III, we present the results of a The position differs between what is given preliminary survey. in statute and what exists under common law . The Key Issues Current laws in Malaysia leave many Land Ownership issues open when it comes to assessing the Orang Asli regard saka or traditional rights worth of Orang Asli property rights. The to specific ecological niches as owned specific details remain to be worked out communally by them from the time of between parties involved in negotiation', their ancestors, and these rights will With regard to the compensationfor Orang continue to the following generations (Nik Asli native land affected by an acquisition, Yusof, 1996). Historically, their claims there is considerable uncertainty to these areas were to a large extent not surrounding the following key issues: contested by other communities because these areas were invariably regarded as What are the Orang Asli land rights uninhabitable, remote and backward (in and interests that have been, or might fact, it was not so much the lands that were be affected by an acquisition exercise coveted by others but rather the resources by the state authority? found therein). Given that the exploitation What is the nature of the impact on of forest resources (such as galzaru, resins, Orang Asli land rights and interests? rattan, and petal) had formed the means How are losses, impairments or extinguishments to be determined? Who is entitled to compensation and 1 Parties involved are: Department of Aboriginal Af~ on what basis? fairs (JHEOA), the State Authority, the Acquiring How to distribute the compensation Body and valuers for Orang Asli Reserves or Areas? 2 See also Sagong Tasi v The Selangor State Covem ment [2002] 2 MLJ591; Adong bin Kuwau and Nors v Kcrajaan Negeri [ohor and Anor I1997] 1 MLJ 418

64 Compeneation for OrallgAsli Native Laud ill Malaysia by which they sustained their livelihood, init, including timber, vest with the Orang the Orang Asli had since 1400s found Asli community there. themselves being exploited by outsiders Six years later, in Adong Kuwau for the extraction of the forest produce (1997) case the court rul ed that the state (Nicholas, 2003). authority must compensate the Orang Asli This scenario however changed when for the loss of income if, as a result of the Malay Rulers arrived to stake claim and acquisition! the Orang AsH were no longer assume ownership of all lands lying within able to subsist on the bounty of their their claimed domain, thereby 'colonising' traditional resource. In this particular case, the territories of the Orang Asli. The the Orang Asli community was awarded introduction of the Torrens System of land for a 25-year period loss of income ownership during British colonial rule amounting to a total of RM38 million in later on exacerbated this situation (Nik monetary compensation. Yusof, 1996; Awang, 1996). Nonetheless, Five years later (in 2002)in yet another the Orang Asli did not lose thei r traditional landmark decision, the court in Sagollg lands entirely during these periods. In fact, Tasi & Ors v. Se/allgor State Gouernmen! & some territories gained official recognition Ors (2002), the court ruled that although during the later part of the British colonial the affected lands were not gazetted as rule (particularly in the 1930s and 1950s) an Orang AsH reserve or were untitled, when they were gazetted as Orang Asli those traditional territories where the reserves; some others were recognised as community had lived and worked upon in Orang Asli areas or Orang Asli 'sanctuary', accordance with their 'adat' or custom are None of these were conferred legal to be considered as having been accorded territorial ownership to the Orang Asli. the same rights as that of a titled land and, Even the more recent Aboriginal Peoples as such, the law that applies elsewhere for Act (Act 134, 1954 revised 1974) fell short acquisition should equally apply to the of granting the full recognition to land holders of the traditional lands. rights with its declaration of Orang Asli merely as tenants-at-will. Tenant-at-Will Recent years have seen several The extent of the Orang Asli rights established Orang Asli settlements having overtheir traditionallandsisspeltoutin the to make way for major development Aboriginal Peoples Act, 1954. In essence, projects such as the Kuala Lumpur the Act provides for the establishment of International Airport (KLIA), highways, Orang Asli areas and Orang Asli reserves. private university, dams, golf courses, and Previously, the view of the government for private housing and industrial projects. was that under the Aboriginal Peoples In standing for their rights, the Orang Asli Act, 1954 the best interest the Orang Asli resorted to various means for remedies, may obtain from their traditional lands is including to the courts of law. They met as a tenant-at-will. This was due to the withsome measureofsuccess in forcing the perception that the traditional lands of State to recognise their traditional or sak« the Orang Asli in principle are state lands rights. In Koperasi Kijang Mas v Kerajaan (Endicott&Dentan,2004;Jama luddin,1997; Negeri Perak & Ors (1991), for example, Salleh, 1990; Idris, 1983). The Orang Asli the High Court ruled that irrespective of was considered to occupy their traditional whether or not an area had been gazetted lands as 'guests' of the government. As as an Orang AsH reserve, as long as that such, when the land is needed for any reasons, the governnlent would just area was identified as an Orang AsH area Of an Orang AsH inhabited area, all resources revoke the status of these traditional lands

65 !Olmwl ofDesignand the Built Environment and issue to the affected Orang Asli a short experience of them under the Aboriginal notice to vacate their traditional lands; this Peoples Act, 1954. is notwithstanding the fact tha t the Orang Many of the same difficulties are Asli and their fam ilies may have been arising in native title discussion. As occupying the land for generations. The accepted by Justices Deane and Gaudron Orang Asli are then required to vacate in Mabo v Q ueensland (1992) 175 CLR 1 these lands within a stipulated period or (Mabo, 1992), it is correct to assume that be evicted otherwise. This is evident in the traditional interests of the na tive the state of Selangor, as in Sagong bin Tasi inhabitants are to be respected even thou gh (2002) case. those interests are of a kind unknown to Apart from being summarily English law. Jus tice Brennan also argued evicted, the Orang Asli is no t paid any that the general principle tha t the common form of compensation for the loss of their law will recognise a customary title only tradit ional lands.Instead, the Orang Asli if it be consistent wit h the common law is compensated purely based on Sections is subject to an exception in favo ur of 11 and 12 of the Aborigina l Peoples Act, traditional native title (Mabo, 1992). The 1954. Any compensation pursuant to extent of tha t exception is uncertain and these sections is in effect d iscretionary and is still being explored (Smith, 2001). As for arbitrary since it is up to the authorities to Orang Asli na tive land, the com pensation decide on the quantum of compensation will require an innovative jurisprudential to be paid to the Orang Asli (Isma il, approach that acknowledges the Orang 2005). There is no fixed guideline. The Asli native land. Therefore, legal and compensation payable to the Orang Asli comparative studies are req uired to equate under these sections is only for the loss Orang Asli native land compensation of productive trees, buildings and any rights and interests either to Wes tern activities on the land. In reality, the amount property law concepts and precedents, paid to the Orang Asli as compensation for or to market land valuation methodology their loss of productive trees and buildings (Cheah 2004; Smith, 2001). is inadequate (Ismail, 2005; Endicott & The exis ting conventional principles Dentan, 2004). relating to special value to the owner or solatium' are of little d irect applicability, Reco gnition for Compensation of Orang if any, in assessing the value of Orang Asli AsH Native Lands native land. Freehold market value notion Generally, it was agreed that the does not covel' that part of the value that determination of Orang AsH native reflects the cultural-based losses inflic ted land compensation will be based on an on past, current and future generations. assessment of the specific traditional land The economic, social, ma terial and rights and interests, and on the specific sp iritual domains of Orang Asli life are effects of an activity on their traditional seen as inseparably and fundamentally land. In order for Orang Asli na tive land to be recognised in common law, the 'facts' of Orang Asli na tive land have to be 3 A solatium is an addition to the value of the land de termined through translation from one and for other heads of compensation; the dispos sessed owner is entitled in respect of his injured feel cultural doma in to Malaysian common ings due to hardship, inconvenience or unspecified law. It is important, therefore, to ascertain loss caused by compulsory acquisition. Compensa what the current limits of that common law tion for injured feelings as distinct from financial translation are. The translation problems loss or physical suffering. The compensation allowed for injury caused to the feelings of others (Sinha and involved are not new; there is a long Dheeraj,2(05).

66 Compensation for OrangAsli Native Land in Malaysia connected with land. It is to be argued land, it appears natural to start with the therefore that the principles and processes conventional methods of land valuation. of compensation for Orang AsH native However, according to Humphry (1998) land be built upon the same paradigm. a 'more flexible approach' is required Orang Asli native land compensation which combines principles of valuation is best viewed conceptually as a multi and the assessment of intangible factors dimensional package whose form and such as general damages. Compensation purpose reveal the distribution of social, for damage to native title will include legal, relations, entitlements, and value monetary and non-monetary components preferences. The new recognition space or, as suggested by Whipple (1997), for Orang Asli native land compensation 'material' and 'non-material' components. will expand and contract as courts deliver The material aspect is the loss of or their judgments and parties negotiate effect upon the acquired land. Generally, outcomes (Cheah, 2004). Nonetheless, the owner of compulsorily acquired land one principle should remain: that OANL is entitled to either the market value of the constitutes a proprietary right, and that its land (Spellcerv. Cotnnunnoenltlt (1907)5 CLR extinguishment amounts to an acquisition 418) or the value of the land to the owner of property (Sagong Tasi, 2002). (Pastoral Finance Associution v Mil/ister Determining the value of Orang Asli (1914) AC 1083), whichever the higher. nativelandforthepurposesofcompensation The former focuses on a likely arms' length will focus on what kind of property right agreed sale price assuming a willing buyer it is and, in particular, what constitutes and a willing seller while the latter focuses 'property', 'loss', 'extinguishment', on special value to the owner.

'adequate' and I fair'. There will continue These general principles have been to be contending reviews of these concepts, refined and developed for the purpose of in legal, economic and other forums across valuing land which may not be capable the world, and a more socially-oriented of sale or in relation to which there is no vision of entitlement is starting to emerge apparent market, and also to value lesser (Gray 1994). Such a trend is well suited interests such as leases, easements and to the creation of a recognition space, and licences (Whipple, 1997; Humphry, 1998). facilitating practical outcomes for Orang However, the market value attributable to Asli native land compensation. Common a freehold title to land remains the starting law recognition and valuation of native point of any attempt to compensate for land for the purposes of compensation loss of an interest in land. It is likely will require an expansion of the borders that these principles are being applied of the legal imagination (Macklem or developed in the determination of 1991). Hopefully, with the common law compensation for loss or impairment of development of Orang Asli native land native title rights (Smith, 2001). In this that is now taking place, Orang Asli can context, the inalienability of native title do more than simply bring their'special should not pose a difficulty because this knowledge and insights' to bear in native can be overcome by promoting the title land compensation cases. similar to GSA title, or by expanding the meaning of customary land under Section Current Thinking on The Valuation 2 of the First Schedule to Land Acquisition Approaches Act 1960. Although the determination will In seeking an appropriate approach for involve assessing the value of the land to assessingcmnpensationforextinguishment the native title holders, the market value or impairment of Orang Asli native of a freehold title to the same land will act

67 ]ollr1lal OfDesign andtileBuilt Enoironment as a benchmark (Smith, 2001; Boyd, 2000). 1960 with regard the property rights This approach has been adopted by the of Orang Asli; and Privy Council, the High Court (in relation the creation of new relationships to an acquisition of land from traditional between the legal system and the owners in New Guinea) and by courts of valuation profession. law in the United States (Keen-Cohen, 1995). It is suggested that this may lead The essential nature of land to to the development of a 'new arm' indigenous peoples is both metaphysical (Sheehan, 1998) of land law specifically (e.g. spiritual and cultural) and material for indigenous property rights which can (Small, 1997). Hence, any assessment decide simultaneously on matters of both for compensation needs to consider both federal and state laws. Itis also anticipated these dimensions. Unfortunately no that valuers will work in partnership with court decision has so far provided for the other disciplines such as ethnoecological payment of compensation for elements and ethnographic consultants and heritage of cultural or spiritual value (Sheehan, consultants. 1997). Whipple (1997) suggests that the Boyd (2000) proposed that valuers assessment of spiritual rights is outside the can assess the appropriate range of values scopeof the formal object of the discipline of of partial and co-existing property rights valuation and should, more appropriately, of indigenous people. He raised the be assessed by the Federal Court. Sheehan following two issues: the sum of the value (1998), on the other hand, argues that of the partial rights does not necessarily special value to the owner and solatium equal the market value of the total can be constructed to cover compensation property and, co-existing property rights for the loss of access to ceremonial lands, usually have a detrimental effect on the spiritual deprivation and loss or perceived partial property rights, thus, an additional loss of social environment. In addition, co-existing right can reduce the value of Sheehan (1998)informs that an unreported an existing right. According to Fitzgerald decision of the Canadian Supreme Court (1997),some native title rights may co-exist on 11 December 1997 has explored the with the rights granted to the 'pastoral concept that indigenes in Canada have lessee' over the same track of land. The not only a constitutional right to own their same situation also happened in Malaysia traditional lands but also to use them in a where the Orang Asli Reserves or Areas largely unrestricted manner. Nevertheless, sometimes co-exist with 'newly alienated' some likely implications of the Orang Asli rights of land of private company. native land issues for valuers in Malaysia are: Whipple (1995) identifies the three appropriate valuation approaches as: the need for a reassessment of existing methodologies to cater these • Inference from past transactions developments; • Simulation of the most probable the need to develop new valuation buyer's price fixing calculus methodologies to determine • Normative Modeling (Contingent appropriate compensation; Valuation) the evolution of new case laws to interpret the Aboriginal Peoples Act, We present below a brief description 1954 and the Land Acquisition Act, of each method.

68 CompclIsafiotlfor Draug Asli Native Lt",d ill Malaysia

Inference from Past Transactions Contingent Valuation (CV) This relies on evidence from relevant CV elicits indiv idual expressions market activity and infers value from of value from pu rchasers for specified similarsce narios.lffactualmarketevi dence increases or decreases in the qua ntity is used, this approach consequently or qual ity of a non-market good. Most produces the most appropriate results CV studies use data from interviews or (Boyd, 2000; Whipple, 1995). postal surveys (Mitchell & Carson 1989). Since Orang Asli native land is largely Valuations produced by Contingent forest in nature, valuation by reference Valuation Method (CVM) are 'contingent' to the market prices of forest should be because value estimates are derived £1'0111 considered by the valuers. Because of the a hypothetical situation that is presented similarity between actual forest and Orang by the valuer to the respondent. The two Asli native land, it could be an advantage main variants of CV are open-ended and to adopt forest valuation for Ora ng Asli dichotomous choice formats. The former native land valuation; in principle, both involves letting respondents determ ine types of lands are non-titled. their 'bids' freely, wh ile the latter format Many goods and services derived presents respondents with two altern atives from trop ical forest land uses are to choose from. According to Bateman et a1 traded, either in local or intern ational (1995), open-ended CVM format typically marketplaces, including woo d prod ucts generates lower estimates of willin gness (timbe r, pu lp and fuel), non-wood forest to pay (WTP) than dichotomous choice products (food, medicine and utensils), designs. crops and livestock products, wildl ife Carson (1991) argues that the (meat and fish) and recreation. For those theoretical foundations of a CVMare firmer products that are commercially traded, than those of other valuation techniques, market prices can be used to construct because of its direct measures. Moreover, financial accounts to compare the costs CV is the only genera lly accepted method and benefits of alternative forest land use for estimating non-use values, which options. In some cases, it may be necessary are not traded in marketplaces and for to adjust market prices. whi ch there are no traded substitutes, complements or surrogate goods, which Simulation OfThe Most Probable Buyer's can be used to attribute values. On the Price Fixing Calculus other hand, because no payment is made This approach is ap propriate where in most cases, some observers question direct market eviden ce is not available but the validity of the stated preference market based scenarios are know n. When techniques. Critics argue that CVM fails to the identity of the potential bu yers is measure preferences accura tely and does established, investigation is made to elicit not provide useful information for policy the way these buyers fix the price, and this (Diamond & Hausmann, 1994). Even is considered a market-based approach practitioners accept that poorly designed to price estimation. In this approach, or bad ly implemented CV surveys can probability is a major component in the influence and distort respo nses, lead ing to simulation and probability dis tributions results that bear little resemblance to the should be utilized in arriving at expected relevant population's true WTP. Much value. The success of this approach recentatten tion has focused on overcoming depend s on the existence of offers from potential sources of bias in CVM stud ies. potential buyers (Whipple, 1995). Resolving these difficultiesinvolves careful design and pre-testing of questionnaires,

69 ]ollmalof Design and the Built Enoironment

rigorous survey administration, and the respondent to answer.The respondents sophisticated econometric analysis to were the officia ls dealing wit h Orang detect and eliminate biased data. Asli affairs in bot h public and priva te According to Whipple (1995), in sectors as we ll as NCOs in Malaysia. Two applying this approach value r tends to hundred (200) qu estionnaires were sent make a series of assumptions on how ou t based on the following breakdow n by the market should behave. Among the geographical location: Klang Valley (N = ass umptions concerned are the types 100), Northern Region (N = 40), Southern of interested buyer; market forecasting; Region (N = 40) and East Coast (N = 20). decision criteria; alternatives available 68 questionnaires were returned, and this and availability of infor mat ion as desired. gave the response rate of 34%, which is CVM is the least accurate approach as it is con sidered appropria te to generalise the necessary to make numerous assumptions resu lts based on Ellhag and Boussabaine (Boyd, 2000). This does not mea n that (1999) and Idrus and Newman (2002). CVM should not be used, because in The data gathe red from the survey was practice, market information is not always ana lysed us ing descriptive statistical readily available. Where this is the case, techniques. Respondents we re asked to CVM might be the answe r. rate their response on the scale of 1 to 5 The use of conceptual markets under (I =strongly disagree; 5=strongly ag ree). CVM is the most widely used approach in the estimating non-use value. One reason Findi ngs for this is the belief that CVM is the on ly means by which passive or non-use values ParI A: Background of tire Respondents can be es tima ted (Adamowicz et nl, 1994; As indicative from Table 1, the respondents Perman el at, 1996). This general rule has in this survey are regarded as well also applied to ind igenou s cultural values. infor med and conversant with the subject Another reason for preferri ng CVM is that matterandare thus well-placed to give their non-use data collected withthis approachis opinion. 44% of them had involvement in easier to obtain than data collected using a 2 to 10 land acquisit ion projects involving behaviour based app roaches (Adamowicz Orang Asli na tive land with 56% having et .al., 1998). been involved in one project. Apart from that, 65% of respondents had experiences Preliminary Survey of between at least 2 years in dealing wit h Orang Asli affairs compa red to only 35% Methodology tha t had less than 2 years experience . A preliminary survey was conducted A large majority (85%) of respondents in January and February 2007.The purpose wa s from government sector (including of the survey was to explore the issues to universities); the private sector comprised payment of compensation for acquisition on ly 15%, this bein g made up of 9% from of Orang Asli na tive land in Malaysia . The Orang Asli related NCOs and 6% from questionnaire was closed-ended and was p rivate firms . designed so that it does not take long for

70 Compen sationfor OrangAsli Native Land in Malaysia

Characteristic Frequency (N=68) Percentage (%)

Gellder

Male 56 82 Female 12 18

Designation

Valuation Officer / Valuer 25 37 jHEOA Officer 24 35 Land Ad ministrator 10 15 NGO Activist 6 9 Acad emi cian 3 4 Others o o

Age

21 -30 years 3 4 31 -40 yea rs 21 31 41 -50 years 38 56 51 - 60 years 4 6 > 60 years 2 3

Experience ill land acquisition projects

1 project 38 56 2 - 5 projects 28 41 6 - 10 projects 2 3 > 10 projects o o

Experiences ill denling toith Orang Asli affairs (years)

< 2 yea rs 24 35 2 -5 years 10 15 6 -10 yea rs 32 47 > 10 years 2 3

Typ e oforgnnisation tohere respondents callie from

Federal/State Governments 55 81 Private Firms 4 6 Semi-Government/ Government Agency 3 4 NGOs 6 9

Table 1: The Respondents Background Source: Field Survey, 2007

71 JOII",1I1 of Designand lir e Built EllvirollllJclI l

DYes DNO • NOl fur e

Chart L: Adequacy of protection on Orang Asli interests in the event of an acquisition Source: Field Survey, 2007

Part B: General Perspectives 011 Land rights of Orang Asli remain as largely an Acquisition ofOrang Asli Native Land unresolved issue which requires a major Whether existing laws ill Malaysia offer treatment. enough protection 011 the Orang Asli interests ill tile event that their natiue Views 011 the issues of Orang Asli laud Iand« are affected by acquisition rights Asshownin Char tl,anoverwhelming Four main issues pertaining to Orang 84% of respondents considered the level Asli land rights scored with mean greater of protection as inadequate; only 3% than 4.0 (Table 2) among the respondents. were of the view that the protection was These issues are: land rights of Orang enough under the present legislations. AsH are politically marginalised and not This suggests that, to the many, property accorded adequate protection; no laws

1 :~ tt J./I';.{; ~·. ~.~ , (:..~~ {O)/ n J~: r 11 r../~:!J~'- [l.. [;ll "I... '1 "!.iHI '/' ('li.i ' ,,-7'ir I I ------Orang Asli land righ ts suffer from poli tical marginalisation, poor 1 4.54 ma nagement and inadequate protection No laws regard the Orang Asli as legal owner of Orang Asli 2 4.'10 Reserve s; their rights are only as tenant-at-will of state land Due to lack of mechanism to keep track of Orang Asli lands, State 3 Governm ent often ends up alienating the ancestral land to private 4.27 develop ers

Negotiation with Orang Asli representatives and JHEOA is 4 4.05 mandatory before compulsory acquisition

Given a wider interpretation to the meaning of ' land occupied 5 under customary rights ' of Section 2, Land Acquisition Act 1960 3.66 to cover Orang Asli lan d

Legend: l =strongly disagree; 2=disagree; 3= neutra l; 4=agree; and 5=strongly agree.

Table 2 :Views on the issues of Orang AsH land rights Source: Field Survey, 2007

72 Compensa tionfor Orang AsliNative Land ill Malaysia

Land acquisition issues Ranking

Land rights of Orang Asli 1

Lack of protection given by acquisition laws to Orang AsH 2

Consideration on payment of compensation for the ancestral land 3

Determination of monetary and non-monetary compensation 4

The absence of uniform approach for dealing with the quantum of compensation 5 among state

Process/procedures of acquisit ion on Orang AsH land 6

Table 3: Ranking of the importance of land acquisition issues of Orang AsIi native land Source: Field Survey, 2007 regard the Orang Asli as legal owner by respondents as the least important. The of Orang AsIi Reserves; their rights are result of this survey is concordant with only as tenant-at-will of state land; due research findings by Smith (2001); Boyd to lack of mechanism to keep track of (2000); Sheehan (1997); Nik Yusof (1996) Orang AsIi lands, State Government often and Sutton (1981) who found that land ends up alienating the ances tral land to rights of the indigenous peoples are the pr ivate developers and; negotiation with main issue in aboriginal researches. Orang AsIi representatives and JHEOA is mandatory before compulsory acquisition. Part C: Contpensation Issues Perhaps given a wider interpretation to Issues 0 11 Compensation of Orang Asli the meaning of 'land occupied under Native Land customary rights' of Section 2, Land Table 4 itemises the 7 Iisted issues Acquisition Act 1960 to cover Orang AsIi of comp ensation for acquisition of Orang land, with the mean score of 3.66, also AsIi nativ e land. All issues (except issue featured as a main issue in land rights. at rank 7) have scored a mean score more than 4.0. This means that the respondents Tile importance ofland acquis ition issues agreed that all the issues are important to ofOrang Asli native lund be taken into consideration in Orang AsIi Based on feedback from the survey, the land acquisition researches. Keith (1984) general ranking of the importance of noted that private property is to be taken land acquisition of Orang AsIi land in only for pubIic use, and with the payment Malaysia is tabulated in Table 3. The land of just comp ensation and the respondents rights ranked the highest among the main believed it was the same for Orang Asli concerns on land acquisition issues of land. Respondents disagree that Orang Orang AsIi lands. Lack of protection given Asli should be allowed to challenge the by acquisition laws to Orang AsIi and award of their reserve land by engaging considerationon paymentof compensation professional valuers. This because with for the ancestral land ranked second and current scenario, land rights of Orang Asli third respectively. Process 01' procedures of have yet to be resolved. acquisition on Orang AsIi land was opined

73 [ournn! of Design alld tire Built Ellvirolllllelli

! l. c; , ! Existing laws fail to adequately take into consideration the needs 1 4.97 and impact of land loss on the lives of Orang Asli Orang AsH lands are imbued with cultural, spiritual, communal 2 and economic dimensions far beyond private registered land's 4.95 market value

Compensation proposal is made available for review and 3 consideration by representatives of Orang Asli and JHEOA 4.83 before inquiry

Additional compensation should be added to the market value for 4 4.79 cultural and spiritual attachment Compensation elements for land acquisition of Orang AsH 5 4.73 reserves are not uniform among states in Malaysia Land acquisition powers of Orang Asli native land are for public 6 4.60 purposes only Orang AsH should be allowed to challenge the award of their 7 2.36 reserve land by engaging professional valuers

Legend: l =strongly disagree; 2=disagree; 3= neutral; 4=agree; and 5=strongly agree.

Table 4: Perceptions on the issues of compensation Source: Field Survey, 2007

Perceptions 011 compensation package productive trees and buildings as required currentlij practised ill Malaysia by the Aboriginal Peoples Act, 1954 is not Table 5 shows the general ranking a fair basis for compensating Orang AsH of compensation packages being native land. However, with mean score of implemented for acquisition of Orang only 3.27, respondents believed that non Asli native lands in Malaysia. Monetary monetary compensation accorded by the compensation was considered 'hardly authority is 'adequate' but still has room adequate' by the respondents. Payment for for improvements.

1 ' r{q;ll ~::",-f"': I ''.~Jl' "/" "."J,. .r,. J(" f.' , "~I' Ii 11.I·f • r,. ~ ro. ,. •l I1 1 Monetary compensation (payment on loss of trees and buildings) 2.03

Non -monetary compensation (e.g, resettlement program, 2 3.27 alienation of agriculture land, recruitment of job etc)

Legend: l=inadequate; 2=hardly adequate; 3=adequate; 4=generous; and 5=exceedingly generous

Table 5 : Perceptions on compensation package Source: Field Survey, 2007

74 Compensation for Orallg Asli Native Lrmd il l Malaysia

SlIggestiolls all hour to upgrade native lands in Malaysia. All suggestions the IIl1strllctllred nature of existing posted in the list have scored a mean compensation score of more than 4.0, meaning that Table 6 below shows the general the respondents recommended that the ranking of suggestions on how to upgrade suggestions tend to be practical and need the unstructured nature of existing to be implemented. compensation acqu isition of Orang Asli

l , c, '( ~ ti!~ , , ... ! .... ,'.1 f~.rl:l:f;"Sttl.I1.1L:' JNt:t.tJ}) .. I I I 1 Land rights of Orang AsH native land must be recognised in law 4.81

Compensation for land should be given due consideration based 2 4.78 all. its market value =

Land Acqui sition Act, 1960 must be amended to incorporate 3 4.60 comp ens ation for Orang AsH native land

There is a need for Malaysia to adopt other countries' practices to 4 4.54 develop compensation framework for Orang Asli native land

Make the existing structures (mo netary and no n-monetary 5 4.53 compensation) a law

Paym ent of non-moneta ry compensation must be made uniform 6 4.49 for all state s in Malaysia

The decisions by court in Sagong Tasi that recogn ised Orang AsH 7 land rights and compensation for acquisition of their land must be 4.36 implemented in due cou rse by related parties

Legend: l =strongly not recommended; 2=slightly not recommended; 3=neutral; 4=slightly recommended; and 5= recomm ended

Table 6: Suggestions on how to upgrade the unstructured nature of existing compensation Source: Field Survey, 2007

Valllatioll approaches for implementation in valuing Ora ng Table 7 shows the general ranking of Asli native land. All other valua tion valu ation approaches being recommended approaches are considered less suitable. for assessing compen sation for acquisition The respondents also strongly felt that of Orang AsH native lands in Malaysia. the traditional valuation methods and CVM was the only approach that had advanced valuation techniques are not high approval among the respondent s recommended for the purpose.

75 lOl/mal of Designand theBuilt Enuironment

,., t'('1 .. .' 'I '• J,I ./, "! , it!.'Jd/ , 1 Contingent Valuation Method (CVM) 4.13

2 Simula tion of the most probable buyer's price fixing 3.25

3 Inference from past transactions (market evidences) 1.21

4 TraditionalValuationMethods 1.13

5 Advanced Valuation Techniques (e.g. Monte Carlo, MRA etc) 1.10

Legend: l =strongly not recommended; 2~slightly not recommended; 3~neutral; 4~slightly recommended; and 5= recommended

Table 7: Valuation Approaches Source: Field Survey, 2007

Part D: Chullenges ill QlIlIIltifiJillg and custom. The nature of property rights Compensation will affect the way resources are utilised and the net social benefit enjoyed by a Chnllenges community from their resources. The As can be seen in Table 8, the respondents position of law has been such that the agreed that all listed challenges were Orang Asli do not have legal rights over important and need to be handled wisely. their traditional lands. This situation, Based on the result of the survey, section however, can change if the Tagollg Tasi case 7.0 of this paper discusses in greater finally gets its endorsement. The Tagollg detail the challenges in quantifying the Tasi is a landmark case in the sense that compensation for Orang Asli lands. the court has, for the first time, recognised the legality of rights of Orang Asli native The Challenges in the Valuation of lands; at the moment this case is pending OANL for Acquisition Compensation appeal to a higher court. The challenges come mainly from the need to identify the exact nature of Economic rigMs - Economi c rights depend the rights of Orang Asli on their native on the enforcement of legal rights and land s. Also, they flow from the typ es consist of the right holder's ability to enjoy of compensation that can potentially be the benefits from that holding. Economic considered. rights may include the ability to enjoy benefits and to meet responsibilities, Iss ue Of Orang AsH Land Rights either directly through consumption and Generally, rights can be viewed either cultural appreciation or indirectly through as legal rights and/ or as economic rights. exchange, including barter, sale, rent, Legal rigMs - Legal rights arise as a result inheritance and gift giving. of formal arrangements, includ ing as a result of constitutional, statutory, judicial Orallg Asli rigMs and interests - Orang Asli rulings or as part of an organised system of rights and interests recognised under indigenous laws, and informalconventions the Aboriginal Peoples Act, 1954 define

76 Compensation for OrangAsli Native Land in Malaysia

1 Issues of Orang Asli land rights 4.75

2 Monetary and non-monetary compensation 4.71

Legal Framework - Federal Constituti on, 1957; Land Acquisition 3 4.66 Act, 1960; Aboriginal Peoples Act, 1954

4 Negotiation for compensation 4.53

5 The most reliable valuation approach 4.49

Legend: l =strongly disagree; 2=disagree; 3= neutral; 4=agree; and 5=strongly agree.

Table 8 : Challenges in quantifying Compensation Source: Field Survey, 2007 the range and type of privileges and would there be any need to make choices responsibilities holders of Orang AsH between different items, and there wou ld native land rights possess. The special or be no relative differences in the value of unique features of Orang Asli native land items. Value, then, is the result of scarcity affect value and the way valuation might and the need to make choices. The choices be estimated. Pre-existing Orang Asli available to an individual or a community rights and interests differ from common are constrained by the individual's or the law concepts of title in land (Nik Yusof, community's budget. Economic value 1996). Orang AsH native land rights are indicates the relative preference for the uniquely 'of their own kind', in that the benefits obtainable from the ownership of rights provide closely intertwined, or joint, an item relative to the benefits obtainable material and cultural benefits, where a from ownership of some other item and community's cultural benefits are specific the willingness to go without something to place (Awang, 1996; Nik Yusof, 1996). in order to obtain more of something According to Sutton (1998), differing else. Confusion about what is meant by degrees of rights and interests in land has the term 'value' has created difficulties been characterised as core and contingent. in its application to Orang AsH native The Court decision in Sagong Tasi which land rights. Many think of value solely recognised the Orang Asli land rights in terms of market or monetary value, will, if endorsed, affect the valuation of and often attach intrinsic value to money compensation for Orang Asli native land itself. While market prices may provide in near future. a low cost estimate of the relative value society places on the benefits obtainable Monetary and Non-Monetary from different items, neither money nor Compensation the market are necessary for value to exist. The benefits or choices available to an The lack of trade in Orang Asli native individual or community are not without land righ ts does prevent Orang Asli from limit; indeed if there are, then there would treating the benefits of their native land be no conflict over resource use, nor rights as economic goods.

77 jo"mal of Design and II,e Built En uircnment

BasedonSections 11and 120ftheA boriginai accordance wit h law and that no law may Act, 1954 compensation for acquisition provide for compulsory acquisition or of Orang Asli native land is subjected to for the use of property without adequate payment of produ ctive trees and bu ildings compensation. With regard to land on the acqu ired area only. This monetary acquisition by the Federal Government, compensation is mandatory under the Article 83 sets out detailed proced ures existing law, but does not cover payment for land compensation as stipu lated for loss of Orang Asli ancestral lan d. On by the Malaysian Constitution (1957). top of that, as being practised in Malaysia, Therefore, using the power contained the state government does have a package in the Land Acquisition Act (1960), the of non-monetary compensation over and government can acquire land for public above the requirement of payment for loss purposes with adequa te compensation as of trees and buildings. The non-monetary det ermined under Sched ule 2 of the Act. package is ex-gratin' in nature, calculated Adequate compensation, therefore, as based solely on the discretion of the state stated under the provision of Artid e 13(2) and isnotuniformamongs tategovernment. of the Federal Constitution refers to the The components of non-monetary amoun t of compensa tion which is decided, compensation are normally inclusive of considering all principles stated under the resettlement programme (wh ich can come First Schedule of the Land Acqui sition Act in the forms of, for example, a house and 1960. 2.5 hectares of ag ricultural land) and if Although the State Authority, under the state is generous enough, this will the provision of Land Acquisition Act extend to providing monthly allowances 1960, has the power to take possession (e.g. RM500 per month) to each family of any private land, it docs not allow for such a duration until the agri cultural the authority to violate one's right onto land is ready to produce. In relati on to their private properties (Omar & Ismail, this, no valu ation approach is need ed to 2005). Unfortunately Orang Asli native determine compensation as the existing land rights are not conside red as private structure is not paying for loss of native properties, but rather only as tenant-at land. Even though the valuer is always will. Under the Aboriginal Peoples Act called upon to determine compensation 1954, the governmen t perception tow ards for loss of trees and bu ildings, in effect no Orang Asli native land is no better than techn ical ap proach is used. The calculation that of a state land. Based on these reaso ns, is a matter of applying the valu e per the acquisition of Orang Asli native land tree from a standard value list prepared is not made under the powers of Land by the Valu ation and Property Services Acquisition Act 1960 which contains the Department, Ministry of Finance Malaysia provi sion to compensate the land but, the to the number of trees involved . compensation payable to Orang Asli only

Legal Framework - Federal Coustitution,

1957; Land Acquisition Act, 1960; 4 When something has been done ex-gra tia, it has Aboriginal Peoples Act, 1954 been done voluntarily, out of kindness or grace. In Gove rnment intervention ove r law, ex-gratia payment is a payment made without land development is exercised through the giver recognizing any liability or legal obligation. Compensation payments are often made ex-gratia the Land Acqu isition Act (1960) and via when a government or organization is prepared to Article 13 of the Malaysian Constitution compensate victim s of an event such as an accident (1957). The latter stipulates that no person or similar, but not to admit liability to pay compen sation, or for causing the event (Sinha and Dheeraj, may be deprived of property except in 2(05).

78 Compensationfor OrangAsli Native Lalld ;11 Malaysia based on provision of Sections 11 and 12 For the parties involved in negotiation of the Aboriginal Peoples Act 1954 for loss and mediation, as opposed to cour t of productive trees, activities on land and litigation, the consideration of Orang Asli buildings. native land compensation is becomin g the vehicle for developing other kind s of Negotiation for Compensation socia l and economic relationshi ps. In the If the compensation awarde d to Orang process, contending values and objectives Asli native land includes a property right have to be settled to mutual satisfaction. transmitted across time to succeeding To do so, a number of practical challenges generations, then compensation for are arising, and some old policy lessons ongoing effects must, in all fairness, also be are re-emerging. made ava ilable to those futuregenerations. If the extinguishmen t of Oran g Asli native The Mos t Reliable Valuation Approach? land consti tutes cultural loss of 'propertyfor Boyd (2000) believes that the ap proaches grouphood', that arg ument is all the more discussed in Section 5 are the most persuas ive when, as Moustakas (1989) appropriate approaches to use to arrive po ints out, future generations are un able at reasoned property value of indige nous to consent to current transactions that peop les. He recommended that the threaten their existence as a gro up. For valuer select the approach based on the that reason, compensation should include progression of the three approaches, a loading for inter-generational equity. from inference to simulation and to CV The alterna tive to a current loading is as to suit the valuation exercise. How that compensation could be staggered by does this translate to the situation for developing conjunctive conditions for its Malaysia? For Orang Asli native land, assessment over the life of an act. The where changes in property righ ts exist, it challenge would be how to conduct the is crucial to differentiate between market assessment. sentiment and reaction of the community. Staggering the negotiation for Further, no record of transaction of Orang compen sation might not satisfy the needs Asli land is ava ilable in the market. This of any party for current certainty about is because land ownership for Orang Asli the exact total of compensation, especially rese rves or areas have never been granted when that amount could effectively by the government except for agricultural constitute a final cap on compensa tion. On projects unde r resettlement programme the other hand, such an approach would where the land title is to be gran ted have the advantage that "the total amount after full settlement of the loan for land of compensation could be more directly linked de velopmen t by the respective Orang Asli. to aciunl impacts (positive or negatiue); be Thus, inference of market ev idence cannot informed byollgoillg impact assessment;alldbe be applied in valuing compensation of distributedto tirepersolls actllally experiencing Ora ng Asli native land. Simulation of the impacts over tire life of all act. 11 miglJl also most probable buyer's price fixing calculus ellsllre tlrat Ora llgAsli lIa tivelandtoould have approach seems also out of question bellefils remaining, to ellable ihem to deal witlr because the ide ntity of the potential tI,e later 'closure' of a resonrce deoelopment buyers cannot be established. CVM is the project, alld the need to re-establish access to, only approach for valuers in Malaysia to alld lise cf, tire lalld illvalved" (Altman & apply in determining the compensation Smith 1994). for Orang Asli native land provided that the land right issues of Orang Asli native land are overcome .

79 JOII",al of Design andtile Built Enoironment

Malaysian Experiences of compensation for Orang Asli native Presented below are the Malaysian lands. The frame work by Burke (2002) has experiences in dealing with the calculation been adopted for the layo ul.

Pri nciples Evidence Calculation Malaysian Experience

Insult • The formal • Based on the • Pilot study showed that Orang determination most affected AsHare not really insulted of native title individual. by acqu isition, as long as the rights. • Minimum based compensation packages offered • (If no loosely on non- by the government are reasonable. determination) econo mic loss for For example, compensation the formulation injury to homes packages for each family of of native in tort cases. Orang AsHaffected under the title rights • Maximum on Privatisation Project of Bukit determined the income Lanjan Township were offered : in the producing value 1 uni t bungalow house; 1 uni t compensation of tota l figure. double storey terrace houses; 1 hearing. • Indi vidual unit low-cost apartmen t for each to group child above 15 years old; RM45,OOO adjustment. wor th of Trust Fund unit and, a monthly allowance @ RM500 for 3 years (period of construction). Due to this attractive compensation package, only 13 families out of 158 families objected the offer.

Distu rbance • loss of access to As above • Based on Adotlg Kuwau case, a total sites, hunting of RM26.5million was awarded grounds, to the community of Orang AsH other natu ral due to loss of hunting grounds resources; and traditional resources. This • loss of access payment is for loss of income so thro ugh the area affected, for a period of 25 years. to other areas; • Recognition for disturbance is also given by Article 4 of Federal Constitution, 1957 which allows the Orang AsHto roam/subsist in any state forest in the country. Therefore, an acquisition of their reserve will not so affect their A' • , I I;[?

80 Compeneetionfor Orang AsHNative Lnlld ill Malaysia

Mental 0 Feelings about As above 0 To overcome mental distress Distress the loss of of Orang Asli community, the homeland; government has implemented the 0 concern about following policy for Resettlement sites and the Program: appropriate proposed use of infrastructure and amenities at the country; resettlement location; motivation 0 concerns programme for Orang Asli to about future adapt to new environment and life; ge nerations; special and sys tematic agricultural 0 Expert projects to ensure stable income anthropological for Orang Asli at present and in evidence on the the future and, land ownership for above. them after the development cost of such project is fully settled by the respective Orang AsH.

Economic 0 Justification of The straightforward 0 Attempts have been made by the Value the se lection notional figu re Ministry of Rural Develop ment of analogy similar to special to alienate land to each family (freehold, damages. of Orang AsHin Malaysia. If leasehold, profit approved, each family will be a prende etc). entitled to 2.5 hectares of land 0 Expert ev idence which comprises 2 hectares of of valuation agricultural land, 0.4 hectare of of the market orchard land and 0.1 hectare of value of the housing plot. The site may or chosen analogy, may not be at the same site wh ere considering the the existing Orang AsH being highest and best inhabited. use. 0 In Sagollg Tnsi case, the Court has ruled that the land rights of Orang AsH Reserve are recognized as similar to private titled land. But, on compensation, the Court still do es not consider the Land Acquisition Act, 1960 compensation structure applicable to Orang AsHland. The case is now pending appeal at Cou rt of Appeal. If the previous decision is sus tained, this w ill give a full recognitio n of Orang AsHland rights and, compensatio n for the market value of land will be materialised.

81 ]oumnI ofDesign "ndlite Buill En vironment

Younger • Age composition An estimation based • Under the present policy, the Generation of the native title on projected real government is encou raging the group~ current returns using Orang AsH to leave the forest and instruction of the compound live near to other communities. the younger interest formula By this move, it is easy for the generation in and making government to provide educa tion, trad itional laws allowances for healthcare and, development to customs relating inflation and Orang Asli that have long been to the area; taxation, benefited by other communities. • The typical time If they still refuse, their younger span of each genera tion is encou raged to move generation based out and stay at governme nt school on ge nealogical hostels to ensure proper education reco rds of the is given to them. native title • Under 'Program Pembangu nan group; Minda' (Mindse! Development • Expert evidence Program) by JHEOA, the younger of current long- generation is trained to adopt real term return wo rld challenges and integrate on secure with other communities. investments. • The idea is to avo id political marginalisation for younger generation of Orang AsH as experienced by their older generation (if any).

Conclusion However, the respondents believed that This pa per has ' discussed the non-mone tary compensation accorded importan ce of exam iningtheissue of Orang by the authority is 'adequate' but still has Asli native land compensation since there room for im provement. is no judici al guidelines and valuation It wa s accepted that most of the discourse on most of the basic issues of compensation for acquisition of Orang land righ ts and valuation approaches in Asli native land rights is likely to be place. According to the survey results, the for non-econom ic loss, structuring this respondents perceived that existing laws potentiality should be given d ue focus. fail to ade quately take into consideratio n The aim is to seek judicial solutions to the needs and im pact of land loss on the compensa tion problems of Ora ng Asli lives of Orang Asli (this is in conlrastto the native land . The difficulties encountered situa tions in Australia and Cana da where are as to whether Ora ng Asli nati ve land the perceptions are that the compensations compensation should be the subject of for native lands are well-received by the legislative reform. This would guide native communities). Furthermore they the courts, to a certain extent, by listing claimed that monetary compensation was relevant factors to be taken into accoun t considered 'hardly ad equate' and payment when assessing compe nsation. Amo ng the for productive trees and buildings as factors are economic and non-economic required by the Abor iginal Peoples Act, loss; individual and communal rights; 1954 is not a fair basis for compensation of disrupt ion to cultura l heritage; acquiring an acquisition of Ora ng Asli native land. body's ability to pay, and; the likely effect

82 Compensationfor Orang Asli Native Land ill Malaysia of the payment of compensation on other Carson, RT., Flores, N .E., Martin, K.M. and sources of income and support. [.L. Wright. (1996). Contingent VOllIOt ioll And In Malaysia, the case of Sagong Tasi Revealed Preference Methodologies: Comparing is under a p peal at th e Federal Court, It Th e Estimates For Quasi-Public Goods, La n d Economics, Vol. 72. will be interesting to observe th e results. N onetheless, it is clear that the decisi on Diamond, P. and [.Hausmann. (1994). will have implications for the future Contingent Va ll/ation:Is SomeNumberBetter Than treatment of valuation for compensation of NoNumber?,Journal Of Economic Perspectives, Orang As li native lands. Notwithstanding Vol. 8. this, negotiation could provide an effective means for reaching a speedy conclusion Fitzgerald, I. (1997), The Wik People v State of to a value dispute between th e parties Queenslalld amiThe TllIlYOllf le Peoples v State of involved, particularly in current scenarios Queensland, Occasional Pape r. of u ncertainty. Gardner, R (1998). Native Title Fro m A Valli er's Perspective, Unpublished paper presented to the References Australian Prope rty Ins titute Rural Conference, 12-14 june 1998, Dubbo, NSW. Altman, J. and Smith, D.E. (1994). The Economic Impact Of Mining Motleys: The NnlJa rlek Case, Gobbo J.,(1993). CompenectlonforExtinguishment Westem Amhem Land'f CAEPR Discussion of Native Title, Law Ins titute Journal , Vol. 67 Paper No. 63, CAEPR, ANU, Canberra. No. 1163.

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