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PROPERTY RIGHTS OF PUBLIC NATURAL RESOURCES: AN NEW LEGAL ALTERNATIVE FOR DEVELOPING COUNTRIES

Fernando Gabriel Irrera, Mariano Javier Oneto and Jorge Rabinovich

1. Introduction

In many developing countries institutional and administrative constraints may hinder the sustainable use of the natural resources (Rabinovich, 1999, this book). In what follows we will analyze those constraints of legal nature. Although most of the experience is drawn from Argentina, it may be applicable to some other Latin American countries . For simplicity we will consider that variety of situations as representative of the “South”, term we will use with that sense.

Legal and administrative constraints are usually complicated because of the critical economic and social conditions in many states of the “South”. Thus it is difficult that a broken state will fulfill its duties of caring for the environment. The analysis and the proposal here elaborated are based on the idea of the conversion of natural resources into a business for both the state and the private sector, in order to foster the rehabilitation and maintenance of the natural resource base.

We analyze here the goods that constitute the public property of the State , and in particular natural resources, and we look into the judicial configuration that entitles exploitation and at the same time guarantee their care. This has two connotations: one, and possibly its main ingredient, is the care of the resources for its preservation and maintenance of its natural renewal capacity; and the other, that this care should be compatible with adequate economic profits as to be attractive as a business or, when used for subsistence –as in the case of rural people-, to provide an adequate living standard for the household. These two conditions imply a sustainability approach, and a modification of the historical tradition of obtaining earnings without internalizing the costs of nature as provider and/or recipient of their use, that is to say, to avoid the transfer of potential negative externalities to the society.

To be able to outline and justify an alternative to the sustainable use of the natural resources in the South, we should review different legal definitions to a potentially applicable configuration.

2. Goods of the public property of the state

Consistent with the federal spirit prevailing in Argentina, article 2339 of the Civil Code defines that “...things are public goods of the general State that forms the Nation, or of provincial States that she is composed of, according to the distribution of the powers made by the National Constitution; or they are private goods of the general State or of the provincial States.”

The National Constitution of Argentina, as reformed in 1994, prescribes, in its article 124, that “the original domain of the existing natural resources in its territory” correponds to the provinces, thereby respecting the provinces’ original ownership upon its resources (Dallavia, 1994). Article 2340 of Argentina’s Civil Code, establishes that the public goods of the State are: the territorial 2 seas, the interior seas, bays, ports, rivers, river beds and their underground waters, marine beaches, the navigable lakes and their channels, the islands when they don't belong to individuals, the streets, plazas, roads, channels, bridges and any public work, the ruins and archaeological and paleontological sites of scientific interest (Pigretti, 1987).

With regard to the use of the public goods of the State, the Argentinean Civil Code (article 2341) establishes that individuals can use them, but subjected to the dispositions of this Code and to the general or local ordinances; thus the State can modify ways in which inhabitants can use public goods. For example, if a lake is accessible for the use and enjoyment of the general population, but later it becomes a National Park, the use and enjoyment will –from that moment on- be governed by the rules of the National Park.

The concept of private domain of the state is equivalent to the domain of civil rights except that the proprietor is the state; this implies that, in spite of the norms of public right that govern it, its assimilation to the private domain of the individuals is obvious and therefore, the things that conform the private domain of the state can be sold, levied, etc.

On the other hand the category of public domain of the state is evident: it involves the judicial authority of the State on everything enunciated in article 2340 of the Civil Code of Argentina, for use and benefit of the people. The public domain of the state has nothing to do with the codes of private rights, for its authority is a materialization of the public power of the state, that is, of its sovereignty.

A precise identification of the public goods of the state is essential because Argentina’s National Constitution omitted listing which of the public goods belong to the provincial states (despite the current constitutional amendment of article 124; Bustamante Alsina, 1995). This omission is covered by the Civil Code that enunciates which are the public goods of the State (article 2340) and makes it clear that all those public goods correspond to the provinces if located within their territories (article 2339).

For example, it corresponds to the provinces the public domain of the rivers and, on the base of this right, the provinces have established regulatory laws on their water patrimony, although there are cases where the Nation has priority because “the sailing of the interior rivers of the Nation is free for all flags, subjected only to the regulations dictated by the national authority” (article 26 of the Argentina’s National Constitution).

3. Domain and property

The Civil Code of Argentina defines domain “...the real state by virtue of which a thing is subjected to the will and the action of a person” (article 2506). To this definition we can add that the domain should be exclusive because, otherwise, we would be in presence of another real state: the co-ownership.

On the other hand, for the Civil Code the concept of property is wider than that of domain since “... the property of a credit goes to the transferee by effect of the transference...” (article 1457) 3 and “... the property of a credit is not transferable to the assignee...” (article 1459). We conclude that property is the “gender” and that, when the property is an object, a “species” is established, which is the domain.

If property rights over certain goods of the public property of the state have been granted to a person, firm or cooperative, it does not mean that domain has been granted. This distinction is an essential ingredient to our proposal, since it allows the consideration of granting a property right (and becoming temporarily part of an individual’s patrimony) despite the state conserving its domain.

4. Possible rights over public goods

Given the importance of property right, we will first analyze which are the possible rights that people can be entitled of in relation to the public goods of the state or of the Provinces; we will examine the different legal configurations that cannot be applied according Argentina’s legislation, and in doing so we will try to arrive to one that would allow it.

4.1. Right Law

The right law represents a group of faculties that correspond to individuals, and that can be exercised by them to make effective their juridical power. It consists of four elements: a) the person or individual, entitled of a right and whose interest is protected; b) the object or person on which the individual exercises its power; c) the cause, or act or juridical fact that gives birth to the subjective right, and d) the passive subject, that is, the person that is subjected to the inherent obligation to the property's right. The latter implies that all right law means a relationship among individuals that results in that when a person is entitled to a right another person is subjected to a obligation.

The conformation of a figure that grants a property right on goods (natural resources in this case) that belong to the state or to the Provinces, can be considered as a right law that fulfills the above- described characteristic. We have only to systematize appropriately the cause that would give birth to this right law because real state (property, perfect usufruct) can only be created by law and, being goods of the public domain of the state, a norm should also exist to allow granting such a right. These real state (property, perfect usufruct) are subjective rights erga omnes , that is to say, it corresponds them the obligation of abstention of all the other fellows.

4.2. The domain

This figure is not applicable for a property right over natural resources because the domain over public goods belongs to the state or the Provinces.

4.3. The perfect usufruct

This is the real state of use and enjoyment of other people's things. It follows in hierarchy to the domain, for the usufructuary (holder of the right of perfect usufruct) can only use and enjoy the 4 thing object of perfect usufruct but doesn't have the faculty to sell or dispose of it. Furthermore, the use and enjoyment of the thing is not as wide as that of the owner since it cannot physically alter it nor change its destination (for example, it cannot transform a shepherding field in a crop field). Respecting these limitations, the entirety of the use and of the fruits coming from the thing, belong to the usufructuary (Arean, 1986; Gatti, 1984).

An important attribute of the perfect usufruct figure is that it is temporary, its maximum term being that of the life of the usufructuary and it is not transmitted to its heirs. If natural resources are given in perfect usufruct, with this figure the state never loses the domain over them.

Article 2839 of Argentina’s Civil Code establishes that perfect usufruct cannot be constituted over goods of the public domain of the state or of the Provinces, but it permits that perfect usufruct can be constituted over goods that belong to the private domain of the state or of the Provinces; however, this can only be done by means of a special law that authorizes such an affectation. Consequently to be able to carry out an usufruct of public goods of the state or of the Provinces, a law that modifies the Argentina’s Civil Code should be passed (and this can only be done by the National Congress) eliminating this prohibition. This law should also contain, as a warrant of the adequate care of natural resources, the rules that regulate this exercise, that is to say, the limitations to the use and enjoyment of these goods in benefit of the people at large.

In summary, the figure of real state is not well adapted for the economic use of the public goods of the state or of the Provinces, unless a modification of the usufruct is carried out, a figure that looks as the most promising for clearly defined property rights..

5. Concession (grant) of use of the natural resources

Within the administrative right we have the figure the “concession of use” that is different from the “permission of use”. While the latter is a mere tolerance on the part of the Public Administration, the “concession of use” implies for its holder a complete right law that cannot be revoked at any moment without compensation, as it happens with the permission of use (Marienhoff, 1996).

In the Argentinean legislation the concept of concession of natural resources doesn't exist, since this modality belongs to the European continental juridical system. Only recently, in the ‘90s, the idea of the privatization of great part of the private goods of the State was revitalized in the Argentina, leading to a privatization wave under the figure of public concessions, involving most public services (light, gas, mail, telephones, drinking water) that up to then was covered by a “paternalistic” state. However this figure didn't become extensive to the use of the natural resources, as we here propose, and that would be coherent with most current political, social and economic ideas.

Dromi (1995) claims that “... the public domain is a group of goods belonging to a public figure that, as they benefit the people at large, is subjected to a special juridical régime of public right.” and that “... the goods under this domain are not res nullius , goods without owners, things of 5 nobody, but rather the subject holder of the goods under public domain, is the state, or the public figure.” According to this interpretation, as the natural resources belong to the original domain of the Provinces they are not res nullius, but have the national or provincial states as proprietor.

Although the goods of the public domain of the state do not prescribe and cannot be sold Dromi (1995) claims “... that the goods of public domain are inalienable doesn't mean that they are totally outside of the juridical trade, they can be object of special rights of use, granted or acquired by means of the forms recognized by administrative laws.” Consequently, the natural resources (not being res nullius and having the Provinces as proprietors), in spite of being inalienable they can be subjected to be given in concession, a figure that we propose should be enacted by law so that the use of the natural resources can be given to individuals or firms, for a fixed time, and with specific sustainable rules.

According to Dromi (1995) the nature of the concession right constitutes a right law, that is a property of the licensee (concessionaire) in the constitutional sense of the term, which grants the licensee (concessionaire) a juridical security not available at present times in connection with natural resources. The juridical security is achieved through a concession (grant) contract that is not a capricious tool in the hands of the state; possible modifications to the concession (grant) contract have to be reasonable and justified, and in the case they would take place (since it is obligation of the state to safeguard the public interest), the concessionaire (licensee) will be entitled to a fair compensation. This figure of a concession of natural resources maintains implies a warranty to the concessionaire that it will not be subjected to the arbitrary changes of policies with changes in the administration. The juridical security granted by this figure to individuals and firms with regard to the natural resources, is an assurance for the development of the business.

This proposal of the concession of use should not be defined from the vision made from the private right, but from a wider perspective, since we are in the field of the public right where the interest of the people at large is above all other things. We have found in the Argentinean legislation related to the regulation of the use of various natural resources, indications that open the way for the juridical figure here proposed. The following are some examples:

5.1. Water resources

Article 2350 of Argentina’s Civil Code prescribes that “... the springs that are born and die inside a given estate, belong, in property, use and enjoyment, to the owner of the estate”; it also sustains that the non navigable lakes don't belong to the public domain.

5.2. Wildlife resources

Law 22421 enacts, in its article 8, that “...conforming national and provincial legal dispositions and norms, the owner of a state will be able to use the wildlife that inhabits it transitorily or permanently, and shall protect it and rationally limit its use to assure its conservation.” Here the state, in spite of not granting property to an individual or firm, demands that its behavior should be such as if the wildlife would really be of the individual’s or firm’s domain.

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5.3. Forest resources

Law 13273, related to the common forest regime, grants to the occupant or owner of the forests, their use subjected to the elaboration of a rational management plan that has to be presented to the pertinent authority (Pigretti, 1987).

5.4. Mineral resource

The amendment to Argentina’s Code of Mining in November of 1995, stimulated in our country an increase of mining exploitations because it allowed mining companies to exploit the mines freely, without being subjected but to three rules: security, police and environmental conservation.

5.5. Usefulness of the figure of “concession–grant of use”

From the above arguments we conclude that in the Argentinean legislation we can find timid “privatization intents”, although with some differences with the juridical concept here proposed of the concession of the natural resources to individuals, firms or communal groups. This step should be given within an appropriate social, political, economic and juridical framework, and this figure should have as supreme purpose that of the benefit of people at large, and that of a “healthy” environment.

6. Conclusions

The proposed figure of the concession of use for public natural resources to individuals or firms or communal groups transfers to its holders a sense of “property” ( sensu Clerc, 1982) that satisfies the juridical and economic security that was needed; the right to use is endorsed by clauses of rescission of the concession contract without fair cause, that would force the state to a compensation of the damages caused to the concessionaire-licensee.

On the other hand it leaves a safeguard on the property right of the state and of the Provinces over their resources, since the right of the concessionaire represents a “property” for the use and not of the resource in itself.

The figure of the proposed concession would require of a national “frame” law or, alternatively, of direct provincial laws that regulate the concession of the natural resources to put special emphasis, not in the business aspects (that is already implicit in its nature) but in an explicit protection of the natural resources assigning an administrative organism the control of the sustainable exploitation of the different types of resources. The greater the concession (in number of resources or in extension) the bigger should be the control put by the state in the safeguard of the resources object of the concession of use.

The figure here proposed could be criticized from the point of view that the enactment of laws that regulate the concession of the use of natural resources would arise from the area of the 7 administrative rights, that is usually restricted to the specification of the conditions and rules applicable to the concessions. We agree that to give in concession a lake, a river or a forest with complex relationships between plant and animals species deserves special care; thus we don't believe that their regulation should remain solely in the administrative responsibility but rather it should be the fruit of a detailed interdisciplinary analysis translated in a regulation of higher and obligatory nature. “To make business taking care of the atmosphere” is from now on, perhaps, the slogan of the new knowledge civilization.

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Literature Cited

Arean, B. 1986. Curso de los Derechos Reales. Editorial Abeledo Perrot. 683 pp.

Bustamante Alsina, J. 1995. Derecho Ambiental. Editorial Abeledo Perrot. 316 pp.

Clerc, C. M. 1982. El Derecho de Dominio y sus Modos de Adquisición. Editorial Abaco. 240 pp.

Dallavía, A. 1994. Constitución de la Nación Argentina Comentada. Editora Platense. 208 pp.

Dromi, R. 1995. Derecho Administrativo. Ediciones Ciudad Argentina. Buenos Aires. 1070 pp.

Gatti, E. 1984. Teoría General de los Derechos Reales. Editorial Abeledo Perrot. 406 pp.

Pigretti, E. A. 1987. Derecho de los Recursos Naturales. Editorial La Ley. 559 pp.

Marienhoff, M. 1996. Permiso Especial de Uso de Bienes del Dominio Público. Editorial Abeledo Perrot. 76 pp.