As a member of the International Property Institute Observatory (in Spanish: “Veenduria International del Instituto del Propiedad” or “VIIP”), Mr. Oppenhuizen is heavily involved in a land rights project in Honduras that aims to stabilize the economy by providing clear title to homes for the large numbers of Hondurans who live in extralegal settlements, and provide access to capital to Honduran entrepreneurs. An estimated 80% of land in Honduras is either untitled or subject to disputes between alleged owners. Some of the poorest and most vulnerable people live in settlements on these disputed lands, but among these vulnerable people are amazing entrepreneurs carefully and quietly building businesses that provide wanted and needed services at a fair price.
Expansion, while justifiable by business standards, is often not a good option for these entrepreneurs, whose businesses could likely support many jobs. Two reasons unduly hold back these entrepreneurs. First, if the business grows too much, local and international gangs will demand a substantial share of the business’ income as “protection” money or what is called a “war tax.” Therefore, the entrepreneurs do not want the community to know of their successes or growth.
Second, without clear title to their land and their home, their single biggest asset, that could be leveraged to obtain needed capital cannot be used to obtain financing. This means that as much as 80% of the potential capital that could be used to develop Honduran businesses, provide stable jobs for Hondurans, and provide better lives for Hondurans in general is off of the table. This problem is not particular to Honduras, but is endemic across the developing world. An interesting book, called The Mystery of Capital, by Hernando DeSoto (available on Amazon), does an excellent job of presenting issues that unclear private property rights and titles have on the developing world.
In addition to the lack of clarity of ownership, Honduras, like many other developing world nations suffers from corruption within its governmental offices, including the Property Institute, which is in charge of multiple aspects of private property titling, and the implementation and execution of the 2004 property law. The 2004 property law is a very well-crafted and thought out law, which provides a path to regularization and ultimately legalization of parcels of real property. If appropriately implemented and executed ownership of the 80% of land in dispute would become clear, and Hondurans’ access to capital would be unleashed. The difficulty is that, although early on the law’s implementation and execution went very well, the bureaucracy, corruption, political patronage and other inefficiencies have gotten in the way, slowing the regularization and legalization process to a crawl, and sometimes stopping it in its tracks.
The VIP operates in a supportive role with The Association for a More Just Society to oversee and hold the Honduran Government accountable for specific and well defined changes to the Property Institute, which are directed at transparency within the Property Institute, effective and efficient titling of land, and the elimination of corruption. The VIIP was created in partnership between Partners Worldwide (link below) and The Association for a More Just Society(“AJS”) (links below). Partners Worldwide is a Christian organization directed at eliminating poverty through partnering business people from North America with local entrepreneurs in the developing world to build a mutually supportive relationship and encourage growth of business and creation of sustainable long term jobs in the developing world. Partners Worldwide is active in over 28 countries throughout the world, including Honduras. AJS is a Honduran NGO dedicated to creating a more just society in Honduras. It is one of the most prominent NGOs operating in Honduras, and while it is Christian at its roots, it receives funding from diverse sources including the U.S. State Department, the European Union, and generous individuals and foundations throughout the world. Its work falls primarily into anti-violence and anti-corruption.
Land rights and land titling issues have been a substantial point of emphasis at AJS since its inception. Please visit these websites if you have time; you will find them helpful and instructive. In particular, they make clear both the difficulties faced by entrepreneurs in the developing world, but also the amazing amount of hope that doing business in the developing world entails. There is a huge worldwide market that is open to each of us, and each of us can have a profound impact if we treat our business as our calling, as a service to others, and a service to God.
Since its inception, and with the hard work of AJS, the VIIP has had some milestones and is now seeing real impact of the work to support transparency, good governance and protection of property rights. In early 2015 the VIIP, AJS and the Honduran Government (Secretary of the Cabinet) signed an agreement to provide the VIIP and AJS unfettered access to the Property Institute. The Honduran Government has upheld its end of this bargain.
The initial review of the Property Institute revealed and institution that was weaker and more corrupt than expected. New leadership was installed, and has committed to a plan of improvement which is broad in scope and shows substantial promise over the short, middle and long term. In the short term, the Property Institute is focused on implementing many significant changes to increase its efficiency in dealing with disputed lands. By way of example, it is implementing a workflow manual created by AJS to ensure accuracy in the titling process and accountability for mistakes. Before the implementation, the Property Institute (under its former leadership) handed out 5000 titles, with a100% fatal error rate. They were not worth the paper they were printed on. The next event, 33% of the sampled titles contained fatal errors. Since implementation of the workflow manual, the error rate is 2.8% and the errors are not fatal, involving minor typos which can easily be corrected. Further, the Property Institute has recognized that data access and data security are of the utmost importance, and is implementing a software program that provides access to statistics and information, while limiting and logging persons who are permitted to and do make changes or additions to the information. This provides the VIIP, AJS and more importantly the Honduran people more accountability, transparency and is a step toward building trust. A final example is the creation of a pilot program to allow titling and recordation of mortgages in transactions not involving disputes within certain banks, and to be conducted by bank employees who are overseen by Property Institute staff. This frees up Property Institute staff to work on titling the extralegal settlements.
These changes are now being implemented, and have a long way to go. But they are a start, and they provide hope for the Honduran people. The rule of law, at least in the Property Institute, seems to be gaining a foothold. Clear rule of law in a means that is directed toward benefitting the people is the only way for a government to earn trust, and that process is starting. The small part that the VIIP can play in this process is rewarding. There is nothing quite like using your skills, knowledge and gifts for the benefit of others who are truly and deeply in need. Having the opportunity to support strong and capable groups who have taken up the causes of the vulnerable is a great honor, and it is always important to note that those groups are the ones creating and sustaining the impact.