Norwegian University of Life Sciences Faculty of Social Science Department of Landscape Architecture and Spatial Planning (ILP) Master Thesis 2015 30 credits An Introduction to the Property System of Pakistan, Focusing on Telenor's Operations in the Country En Introduksjon til Eiendomssystemet i Pakistan, med Fokus på Telenors Virksomhet i Landet Mohammed Ihlaq Shakoor Preface This thesis marks the end of my five years of studying Land Management at the Norwegian Univercity of Life Science in Ås, Norway. This thesis aims to investigate the challenges and obstacles a international company might face when operating in the property system of a foreign country, thus how an international company will have to adapt their business and understanding in relation to the process of acquisition. This is a relevant issue, since advances in the development of technology has resulted in a globalization process, which has made acquisition across national boarders relevant and profitable. The study has given me a better understanding of the significance of property in the society and the opportunities arising from a well-functioning property system, as well as the limitations imposed by a weak property system. It has been a challenge to embark on such a extensive task and there are certainly some decisions that I could have made differently, but I am very pleased with the execution of this thesis. I believe that I have managed to highlight the research question in a good way, while I have described the Pakistani property system in a satisfying manner. I would first and foremost like to thank my supervisor, Professor Emeritus Hans Sevatdal, for having encouraged me to write this thesis and for the valuable guidance I have received from him in this work. His constructive feedback and advice has been of great benefit, in addition to his professional knowledge. Furthermore, I wish to thank Richard Groven from Telenor Real Estate, for the interest he has shown to the thesis and for having put me in contact with representatives from Telenor Pakistan. I also want to thank Shakeel Ahmed from Telenor Pakistan for making me feel welcome and for his help in organizing the interviews with employees in Telenor Pakistan. I want to give a special thanks to the interwievees, for their participitation in the interviews and for all the other help in relation to this study. Their contribution has been essential for the thesis. Finally, I want to thank NJKF – Norges Jordskifterkandidatforening for financial suport, which made it possible to conduct the fieldwork related to this thesis. i Abstract The theme of this thesis is land acquisition for telecommunications purposes, with the research question: How does Telenor acquire property in Pakistan and what are the challenges associated with operating in the Pakistani property system. This thesis deals with Telenor’s acquisition activities related to the establishment of Base Transceiver Station towers, focusing on the negotiation process. I wanted to illustrate how Telenor as a Norwegian company conducts acquisition in a foreign country and the challenges met by operating in the Pakistani property system. I wanted to explain the Pakistani property system, as I am well aware that religion and culture has a central place in the Pakistani society. I have prepared three issues, in addition to the research question, in order to answer and refine the research question in a satisfying manner. The three issues concentrates on elucidating the main factors related to the acquisition process, which is executed by Telenor. These questions deals with the legal framework related to land acquisition in Pakistan, the Pakistani property system and Telenor’s practical implementation of land acquisition in their business. I found out that there is a large bureaucracy associated with land acquisition, and in general within the Pakistani property system. In addition there is a considerable uncertainty related to the information in the Pakistani property system. The study shows that Telenor has a strong position in negotiations with private landowners, as there is a limited knowledge among the owners about current market prices and their land rights. There is a big difference in the Pakistani property system, from a theoretical perspective to the practical implementation of the system. The Pakistani property system is theoretically a good and well-functioning system, but as a result of corruption, extensive registration process of land rights and low wages among the administrators of the system has led to a little transparent system being used by resourceful people in the society. The property system is often tampered with in practice, property and rights are transferred between landowners without the necessary process of registration and notification. A landowner may for instance lose rights to his own property without being aware of it, until one day someone knocks at the door and claims right to the property. It is also a great cultural impact on rights to property in Pakistan, leading to limitations on the access to various land rights; this concern especially women and the poor population. ii Telenor does mainly acquire property through amicable agreements with private landowners; land acquisition is primarily carried out as leases as a result of various practical reasons. The biggest challenge which Telenor faces in the acquisition process; are the challenges related to the identification of the legal owner of a property and risks associated with terrorism and natural disasters in certain areas. Telenor has solved many of the cultural and legal challenges by establishing Telenor Pakistan as an independent company, while Telenor is involved on a consultancy basis and managing level. iii Sammendrag Temaet for denne oppgaven er grunnerverv til telekommunikasjonsformål, med problemstillingen: Hvordan erverver Telenor eiendom i Pakistan, og hvilke utfordringer er det knyttet til å operere i det Pakistanske eiendomssystemet. Denne oppgaven omhandler Telenors grunnervervs virksomhet i Pakistan til telekommuniksjonsformål, med hovedfokus på selve forhandlingsprosessen i akkvisisjonen. Jeg ønsket å belyse hvordan Telenor som et norsk selskap gjennomfører akkvisisjon i et fremmed land og hvilke utfordringer selskapet møter ved å operere i det Pakistanske eiendomssystemet. I tillegg ønsket jeg å gjøre rede for det Pakistanske eiendomssystemet, ettersom jeg er godt kjent med at religion og kultur har en sentral plass i det Pakistanske samfunnet. Jeg utarbeidet tre delproblemstillinger for å svare og avgrense hovedproblemstillingen på en oversiktlig måte. De tre delproblemstillingene tar sikte på å belyse de viktigste faktorene knyttet til den akkvisisjonsprosessen som Telenor gjennomfører i Pakistan. Disse tre delproblemstillingene omhandlet det juridiske rammeverket knyttet til grunnerverv i Pakistan, det Pakistanske eiendomssystemet og Telenors praktiske gjennomføring av grunnervervsprosessen. Jeg fant ut at det er et stort byråkrati i forbindelse med grunnerverv og generelt innenfor det Pakistanske eiendomssystemet, i tillegg er det en betydelig usikkerhet knyttet til opplysningene i dette eiendomssystemet. Studie viser at Telenor har en sterk forhandlingsposisjon i forhandlinger med private grunneiere, da det er liten kunnskap blant private grunneiere om hva som er gjeldende priser i markedet og hvilke rettigheter de har. Det er en stor forskjell i det Pakistanske eiendomssystemet, sett fra et teoretisk perspektiv til den praktiske gjennomføringen av systemet. Det Pakistanske eiendomssystemet er teoretisk et godt og velfungerende system, men som et resultat av korrupsjon, en omfattende registreringsprosess og lave lønninger blant forvalterne av systemet, har ført til et lite transparent system som blir misbrukt av ressurssterke personer i samfunnet. Eiendomssystemet er ofte tuklet med i praksis, eiendom og rettigheter overføres mellom grunneiere uten den nødvendige prosessen med reistrering og varsling. En grunneier kan for eksempel miste rettigheter til eiendommen sin uten å være klar over det, inntil det en dag kommer noen på døren og hevder rett til eiendommen. Det er i tillegg en stor kulturell påvirkning på rettigheter knyttet til eiendom i Pakistan, som fører til begrensninger i eiendomsretten; dette gjelder spesielt for kvinner og fattige. iv Telenor erverver hovedsakelig eiendom gjennom minnelig avtale med private grunneiere, grunnervervet gjennomføres primært som leasing avtaler på grunn av praktiske årsaker. De største utfordringene som Telenor møter på i akkvisisjonen, er blant annet identifiseringen av den juridiske grunneieren av en eiendom og risiko knyttet til terror og naturkatastrofer i enkelte områder. Telenor har løst mange av de kulturelle og juridiske utfordringene ved å etablere Telenor Pakistan som et selvstendig selskap, mens Telenor selv er involvert på konsulentbasis og forvaltning. v Contents Frontpage ............................................................................................... I Preface..................................................................................................... i Abstract .................................................................................................. ii Sammendrag ......................................................................................... iv Chapter 1 - Introduction ........................................................................ 1 1.1 Background and theme for the thesis ..........................................................