International Land Measurement Standards: fit for purpose

Setting global standards

14 February 2018

James Kavanagh offers an update on the International Land Measurement Standards, and explains how the concept of 'fit for purpose' can be applied

Effective administration is essential for the good governance of land, and a strong and simple land information system (LIS) that contains all the details needed to verify land parcels and validate ownership is a prerequisite for a functioning land market. A working LIS should help record and report this information, especially when ownership is being transferred.

Most issues relating to land or property ownership occur in the peri-urban area, where informal settlements clash with rapid urbanisation, and where land and tenure disputes can quickly escalate into open conflict.

This is also the area of greatest economic development, increasing land value, rampant development speculation and the most significant loss of revenue for local authorities.

Land and tenure security formalisation occurs first to enable transfer, acquisition,  development, disposal, inheritance, compensation and taxation. Revenue from land taxation can be used to improve services and much more – in developed nations, it can add up to 4% of GDP, but in developing countries it is almost negligible.

A fair framework

The International Land Measurement Standards (ILMS) are intended for use by individuals and companies and act as a framework to support the determination of fair compensation for land assets (see Figure 1).

ILMS are:

  • a framework for reporting on land assets and transactions of such by people and legal entities
  • a basis for collecting asset and transactional information to identify what is on the ground, what information is available and its quality
  • a set of principles for transparency, integrity and consistency in land asset reporting, supporting mechanisms such as the International Financial Reporting System
  • non-prescriptive and flexible, so they can be adopted incrementally in line with fit-for-purpose (FFP) principles, thereby advancing best practice for reporting on land assets
  • a due diligence process, which informs the overall investment analysis; this will draw on many sources of information and corroborate them so any risks can be assessed or costed.

ILMS are not:

Why ILMS are needed

About 70% of land around the world is unregistered, and transactions can take place under fragile legal and administrative regimes with incomplete property information and little or no systematic approach to recording it. This results in a high-risk property environment caused by an inability to verify documents’ content and increased potential for dispute without resolution.

For example, 3.1m people and more than $178bn of infrastructure investment in India are locked into legal land disputes. Consistent land reporting globally will benefit emerging markets significantly.

Large-scale land acquisition issues are also top of the agenda for UN Habitat, the FAO and the World Bank, especially since the adoption of the New Urban Agenda at Habitat III in Quito, Ecuador, in 2016. According to the World Bank, 10m–15m people are displaced by development and infrastructure projects each year. Between 1950 and 2015, around 80m were displaced for the same reason in China, and more than 65m in India.

The lack of a transparent, robust land transfer process severely undermines the ability of national governments and international agencies to provide fair compensation.

Displacement is only likely to increase as low- and middle-income countries experience growth in infrastructure development, rapid urbanisation, extraction of natural resources, industrialised agricultural practices and internal and external population migration caused by climate change (Land Journal August/September 2017, p.18).

Fair exchange

The New Urban Agenda has highlighted fair land transfer and compensation for legal acquisition as an important way of ensuring a sustainable, equitable urban future for much of the world’s population. If there is no clear and equitable means for transferring land and the process does not protect the rights of both the seller and the investor, then costs will increase, conflict and legal challenges will escalate, and projects will either overrun or not happen. Surveyors are essential to this process as they deal with both buyers and investors, organising case files and technical reports, protecting rights, controlling costs and adding value.

The Thomson Reuters Foundation initiative Place offers a resource for those dealing with land issues, and has helped bring back into focus the thoughts of Hernando De Soto, author of The Mystery of Capital, who recently stated:

'There is no such thing as an investment without property rights that are negotiable and transferable'.

These last 2 terms, 'negotiable and transferable', are at the core of international land standards.

De Soto suggests that providing the world’s poor with titles for their land, homes and unregistered businesses would unlock $9.3tr in assets, because this would allow them to use their homes or land to borrow money and start businesses. The Land Portal is also highlighting the growing importance of global land investments and the necessity for consistency in land transfer protocols and standards.

Fit for purpose

ILMS will forge direct links between land professionals, legal advisors and financial reporting by removing risks from transactions and implementing an agreed information framework.

There is a direct connection between the efficiency of each transaction and the land data. Land valuation is essential for transfer, but can be strengthened by the data made available during the process.

The key concepts of the FFP approach – purpose, flexibility and scalability – are engrained in ILMS, and FFP can be incrementally improved over time. The core 7 land data elements in the ILMS are:

  • land tenure
  • parcel boundary identification
  • site or land area
  • land use; services
  • building
  • land value, or
  • transfer price.

Aerial and satellite imagery could help establish a mapping and parcel identification base for tenure security and land formalisation initiatives. But a desperate lack of professional surveying capacity in low- and middle-income countries means that FFP must be deployed to support land markets, not only in terms of surveying but also appraisal valuation.

FFP can be applied across the entire land transaction process, from tenure security to taxation, and also in the seven ILMS land information framework elements listed above. FFP can work with services as well. A scaled version could include information on water supply, electricity, roads and telecommunications. The ILMS include examples of the type of data needed.

The ILMS have been constructed to enable the flow and collection of information from the start of the land transaction to the recording of its completion, either formally or informally.

Figure 1: International Land Measurement Standards (ILMS) standard 1 - Land Information Reporting Standard

ILMS figure

ILMS also contain an agreed geospatial survey accuracy table, which for the first time outlines what is meant by survey output and its relationship to scale and achievable accuracy. This is an enormous milestone for the global geospatial surveying professional.

The ILMS coalition and the standards-setting committee (SSC) have taken steps towards a common understanding of land transfer, land valuation and geospatial accuracy, but there is more  to be done. Organisations such as FIG, the Council of European Geodetic Surveyors, RICS, Ordre Des Géomètres Experts, the Ghana Institute of Surveyors, the National Society of Professional Surveyors, the New Zealand Institute of Surveyors and many others have shown what we can do as a unified profession.

FFP administration will help the growing need for technical surveyors and valuers and training. Such professionals must establish the appropriate formal land transfer and taxation systems for low- and middle-income countries.

The ILMS coalition has engaged with other important land initiatives, such as the Open Geospatial Consortium working group on land administration, the UN Habitat Global Land Tool Network initiative on the valuation of informal land and settlements, the USAID–Thomson Reuters Land Matters consultation initiative, and the UK Department for International Development’s project Land: Enhancing governance for economic development.

Lack of transparency can increase difficulty in releasing the value of the land as an asset and contributes to a lack of awareness of land policies and legal frameworks; this undermines land tenure security and helps stoke conflict and social unrest. The opaque nature of land administration systems and decision-making mechanisms exacerbates corruption by officials and citizens alike.

However, good land data remains inaccessible. New technologies such as blockchain can help, but land is an emotive and highly political issue that needs strong governance and an enforceable legal framework to inspire public and investor confidence. ILMS are just one part of a global picture – but they are key to helping the transparent, fair and secure transfer of land. ILMS are open for global consultation until 28 February, and are expected to launch at FIG Istanbul in May.

James Kavanagh is Director, RICS Land Group

Further information