Gustavo Petro and Private Property Rights - Medellin Advisors %

Gustavo Petro and Private Property Rights

Private property

Colombia is a country with a strong republican tradition. Despite a bloody civil war that lasted for decades, it is one of the most stable democracies in Latin America. The country has an advanced legal system and independent institutions.

The 1991 Constitution recognizes private property, while promoting equality and social justice. In this article, we will analyze the guarantees enshrined in the country and the circumstances under which it is possible to limit the rights of individuals.

Private property
Colombia is a country that has always respected private property.

According to Article 58 of the 1991 Political Constitution of the Republic of Colombia, private property is guaranteed. But it should be noted that this right is not absolute, as there are obligations of the property owners – like many places –  which is the payment of taxes to the Government. 

Additionally, Decreto 1886 del Código Civil establishes the following:

Domain (also called property) is the real right of a corporeal thing to enjoy and dispose of it arbitrarily, not being against the law or the right of another.

According to this definition, ownership grants the owner a broad right to use, enjoy and dispose of their property freely – without any limitations other than the law and the rights of others.

The Certificate of Tradition and Freedom is a document that proves real estate in Colombia
The Certificado de Tradición y Libertad is the document that recognizes real estate property ownership in Colombia.

As mentioned, while private property rights are protected, they are not absolute. The main exceptions to private property rights are public utility and social interest

Those interested in acquiring private property in Colombia may be concerned, for example, about the situation in Venezuela wherein the State has expropriated private property. 

However, the situation in Colombia is different in part due to the constitutional protections mentioned above. Additionally, any taking in Colombia requires in any case administrative or judicial decision and prior compensation to the affected persons.

Affectation of assets for committing serious crimes
'Extincion de Dominio' applies to cases of seizure of assets resulting from crime.

According to the jurisprudence of the Constitutional Chamber of the Republic of Colombia in sentence No. 295 of 1993 it was specified that: “Property, as a social function, may be limited by the legislator, provided that such limitation is in the public interest or for the general benefit of the community, such as for reasons of health, environmental conservation, safety, etc.” 

Property Rights in the Colombian Constitution
The Political Constitution of Colombia of 1991 recognizes the right to private property.

In this sense, Article 58 of Law 388 of 1997 established the reasons of public utility for the acquisition of real estate by voluntary alienation and judicial expropriation as well as for the purposes of decreeing its expropriation and in addition to the reasons determined in other laws in force. 

Law property colombia
The law regulates the expropriation procedure in Colombia


As the previous paragraphs may be better suited for a law textbook than a blog, so you might be asking yourself, what does all this mean?

Can the government take away my property on a whim?

In practice, this has rarely happened in more than two hundred years of republican history. There is a clear and uninterrupted tradition of respect for private property, regardless of the ups and downs of politics.

The Constitutional Court of Colombia is the highest court of the Colombian judiciary in matters of constitutionality. According to the Constitution, the Court is entrusted with: “Safeguarding the integrity and supremacy of the Constitution”.

In this capacity, it has a series of functions such as determining the constitutionality not only of laws, acts, statutes, and presidential directives (decrees), but also amendments to the Constitution itself, and International Treaties. 

Constitutional Chamber of Colombia
The Constitutional Court is the highest instance of judicial power in Colombia

In 2009, during the government of Álvaro Uribe Vélez, an attempt was made to enact the Ley 1152 de Desarrollo Rural. This law allowed the expropriation of unproductive lands. This law was declared unconstitutional by the Constitutional Court. 

The Court held that the communities and ethnic minorities were not consulted on the content of the law. This shows that in Colombia there is a good balance of powers and even the most popular presidents have submitted to the laws of the country.

Exceptional Cases of Expropriation or Extinguishment of Ownership Recognized Under Colombian Law

Exceptional cases of expropriation recognized under Colombian law:

1). Ordinary expropriation: These are related to social interest or public utility for the government to be able to legally expropriate a private individual. But in order to achieve this, a procedure was established in Art. 62 of Law 388 of 1997 which must be strictly followed and a final and definitive judicial sentence must be issued, as well as fair compensation.

Fundamental rights in Colombia
Ordinary expropriation must be carried out in accordance with the law and the Colombian Political Constitution of 1991.

In the ordinary expropriation process, three public authorities intervene to guarantee the opportunity of defense of the private party. The Legislator establishes the exceptional cases in which expropriation is possible. But the Executive or competent authority must justify the measure and issue a decree, and finally, the judicial branch, which ensures strict compliance with the legal regulations and establishes the fair compensation to be received by the person affected by the measure.

Separation of Powers in Colombia
Separation of Public Powers guarantees justice and equity in Colombia

2). Administrative expropriation: This is the case in which there are conditions of urgency on the grounds of public utility and interest  Like ordinary expropriation, a procedure is established in Art. 68 of Law 388 of 1997  which must be followed. In any case, the affected party may appeal before the contentious-administrative jurisdiction to demand nullity, reestablishment of the right, or to controvert the price recognized in the administrative act.

Judicial System in Colombia
The Colombian legal system is based on the legality of the State's actions vis-à-vis private parties.

3). Expropriation in case of war: This type of expropriation only operates in movable property and does not require prior compensation due to the urgency of the case. 

Army of Colombia
In case of war, the government may temporarily occupy private property.

4). Extinction of ownership:  Called ‘Extincion de Dominio in Spanish, this form of expropriation is carried out by the Fiscalia (the National Prosecutor’s Office).

Its purpose is to prosecute assets and capitals obtained illegally or destined to the commission of crimes. It applies only in cases of the commission of serious crimes by the individual and that entail illicit enrichment.

Obviously, this type of taking does not allow for compensation to the person involved, due to the illegitimate origin of the property title he/she holds. In any case, the affected person has the right to oppose this measure and defend himself.

These types of cases typically involve drug trafficking, money laundering, or terrorism. Those not involved in these types of activities need not fear this type of action from the State. 

Attorney General of the Nation in Colombia
The Attorney General's Office can decree the forfeiture of assets acquired with illegitimate money.

Regarding the right to property, the Constitutional Court has stated that this right may be protected and guaranteed when there is a connection with fundamental rights such as due process or equality.  Thus, the right to private property is a universal right even being recognized in Article 17 of the Universal Declaration of Human Rights (which Colombia is a party to).

It states that everyone has the right to own property individually and collectively, and that no one shall be arbitrarily deprived of it. 

 
Legality and Colombian Democracy
Property is a right recognized by the Universal Declaration of Human Rights of 1948.

Who is The Candidate Gustavo Petro?

Gustavo Petro is the leader of the so-called Pacto Historico. He is the Colombian leftist candidate who to date is the main favorite in the Colombian Presidential Elections of 2022. He started his political struggle as a member of the guerrilla movement M-19, which signed a peace deal in 1990. In addition, he has been a councilman of the city of Zipaquira Cundinamarca, Representative to Congress, Mayor of Bogotá, and Senator of the Republic.

Petro had an intimate relationship with the late and controversial former Venezuelan President Hugo Chavez. Combined with his guerilla roots and socialist rhetoric, this produces fear in many citizens who see Petro as a new Colombian Chávez.

Gustavo petro quiero ser
Gustavo Petro leads in polls for Colombia's 2022 presidential elections

Chavez came to power in that country in 1998 by electoral means. Subsequently, he imposed the so-called “Bolivarian Revolution”, aligning himself with the model of Cuban leader Fidel Castro. Chavez established a radical regime that still governs Venezuela today. In order to perpetuate himself in power. He curtailed democratic freedoms, persecuting the opposition, and ruined the economy through expropriations and abusive nationalizations. Today, Venezuela is one of the most impoverished countries in the world, despite having the largest oil and mining reserves. Recent years have seen the forced migration of more than six million Venezuelans to different parts of the globe. 

Petro y chaves c default
Petro and Chavez had a great friendship


Why Does Gustavo Petro Swear He Will Not Expropriate?

Due to Gustavo Petro’s sympathy for Chavez and other leftist regimes, these ties have hurt him politically in Colombia, which has never elected a left-wing President.

The candidate has been moderating his discourse more to the center. He has promised that he will not expropriate anyone. On April 14, 2022 at the 17th Notary Office in Bogota, the candidate stated: “In the face of this campaign of fear, I am obliged to make this commitment to the whole of Colombian society. With forcefulness, I affirm that my proposal for the transformation of this country is not based on nor includes any type of expropriation“.

Gustavo Petro has promised not to expropriate in a document signed in a notary's office.
Gustavo Petro has promised not to expropriate in a document signed in a notary's office.

Afterward, before the media, he read the signed document stating: “With deep respect for the constitution and the law, as president of all Colombians, I will not expropriate the wealth or assets of their owners. As president of all Colombian men and women, I will not expropriate the wealth or assets of their owners. I will not expropriate. I will not expropriate anything or anyone,” Petro assured in the publicly signed commitment.

For his detractors, this statement is of symbolic character (essentially – political theatre and nothing more). It is simply a political strategy of Petro to calm down the electorate and reach the Presidency of the Republic. Legally, there is no link between a private notarial document and a governmental act. In Colombia, only formal decrees, laws, and regulations are binding, according to the provisions of the Political Constitution of 1991.

Petro's Agrarian Reform Proposal

Another pledge of Petro along the campaign trail has been an ambitious agrarian and tax reform,  with the aim of encouraging national production and food security in the country. He seeks to democratize land tenure in order to generate employment and wealth for the country and promote progressive access to land ownership for agrarian workers.

Gutavo Petro and Private Property Rights
Gustavo Petro has promised to push for an Agrarian Reform

The mechanism that Petro has argued for this ambitious reform is not expropriation. It is the increase in property taxes, specifically on idle and non-productive lands. Exceptionally, the State would play the role of arbitrator to democratize the land and thus favor the impoverished peasant class. According to Petro, it is estimated that there are more than ten thousand large estates of fertile and unproductive land in Colombia. Some of them have even been obtained in a dubious way or related to criminal activities such as drug trafficking. See this video: “¿Gustavo Petro convertirá a Colombia en Venezuela?.

Drug trafficking in Colombia
In Colombia, many lands are dedicated to illicit crop cultivation

Is An Agrarian Reform Desirable in Colombia?

In this regard, studies on the subject show that Colombia is currently the most unequal country in Latin America in terms of land distribution. The holders of more than 500 hectares of land produce barely 1% of agricultural production. Thus, agrarian reform is a strategic issue for the new government, which must also solve the problems generated by this inequality, among them: forced displacements to the cities, unemployment, poverty, violence in the countryside, and drug trafficking.

Agrarian Reform Colombia
Colombia is one of the most unequal countries in terms of land distribution

In some sectors of the population, the statements of candidate Petro instill fears and sow doubts that if he is elected president of the republic, will he respect private property? Then, the shadow of the Venezuelan case returns to the forefront to fuel this fear. The fact is that in that country the Bolivarian government carried out an intense expropriation campaign that some see could happen in Colombia. However, the problem of land concentration is not something new for this country and is one of the main sources of violence. For more on the subject, check out this article: “200 years of landlessness? Land inequality and the search for peace in Colombia”.

Hugo Chavez expropriates
Former President Hugo Chavez in Venezuela pursued an aggressive policy of expropriations.

Protection of Foreign Investments in Colombia

The protection of foreign investments in Colombia is guaranteed by the free trade agreements signed by the Republic with more than thirty countries around the world. These have a constitutional hierarchy. Colombia has ratified agreements for the protection of investments with countries of the Pacific Alliance, Brazil, Canada, Chile, China, Korea, Costa Rica, United Arab Emirates, Spain, United States, France, India, Japan, Israel, Mexico, Panamá, Peru, United Kingdom, Singapore, Northern Triangle, Turkey, European Union, among others. Thus, the expropriation of foreign investment would also be subject to the public interest or public utility and compensation.

Investment Protection Colombia
Colombia maintains trade agreements that protect foreign investment

In general, these agreements prohibit the expropriation or nationalization of covered investment directly and indirectly through measures having effects equivalent to expropriation or nationalization except: a). for reasons of public utility b). in a non-discriminatory manner and c). by means of prompt, adequate and effective compensation.

A Future Government Gustavo Petro and Foreign Investment

Gustavo Petro as a candidate has promised to respect private property and democratic forms. For now, there are no compelling reasons to doubt his word and certainly everything that is said to the contrary is simply political manipulation in which it is not up to us to intervene.

Proposals of Gustavo Petro
Emulating the Biblical Moses, Petro has written his promises in stone.

So if elected, Petro will need to sustain the levels of foreign investment in the country in order to keep the economy afloat. While he manages to advance in the reforms that have been part of his electoral campaign. It is very likely that the markets will react with skepticism about the risk of investing in Colombia if the scenario changes radically. Therefore, it is expected that in the first half of the year we will see months of uncertainty and devaluation of the Colombian peso.

Low cost of living for expatriates in Medellin
Uncertainty and currency devaluation expected for the first half of 2022 in Colombia

If Petro wins the elections, he will have to give clear signals if elected President that Colombia will promote the necessary social and economic transformations demanded by the population in peace and in accordance with the law. The new government will start in August with the main challenge of generating confidence in foreign investment.

Colombia is a Democratic Nation with Strong Institutions

Colombia is a nation with adequate institutional and legal development, even in times of internal war, when it was fighting against drug trafficking, criminal gangs, and terrorism. The country has been an example to the world for its capacity to respond and overcome difficulties. 

Colombian Democracy
The Coat of Arms of the Republic of Colombia represents the values of freedom and order.

Private individuals have instruments that guarantee respect for private property with no limitations other than the law and the common good. Even if things were to change, this would require a profound constitutional reform, which is not an easy thing to undertake without a majority in Congress.

Legislative power in Colombia
Any Constitutional reform must have the support of the Congress of the Republic.

CONCLUSION

  • Expropriations in Colombia are very rare, and only happen under exceptional circumstances after a judicial process
  • Gustavo Petro has shown an affinity for a Hugo Chavez style socialist policies, but has also solemnly sworn in a notaria not to implement them during his potential Presidency. 
  • Government taking of private property in Colombia tends to be linked directly to drug trafficking, money laundering, or terrorism
  • Regardless of the result of the 2022 election, direct foreign investment is encouraged and protected. 

 

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