The FINANCIAL — Recent arrests made in an extortion case in Mestia, Svaneti, have not only resulted in a battle of statements between the Ministry of Internal Affairs and several non-governmental organizations in Georgia, but have also revived accusations of corruption in Georgia’s investment climate. Such cases seem to conform to an emerging pattern: as a Georgian region gets announced as a tourist destination, it also becomes plagued with land disputes.
Neli Naveriani, a member of Mestia Sakrebulo and three of her relatives, David Japaridze, Tariel Japaridze and Shota Japaridze, were arrested on extortion charges on July 7 in Mestia. According to the MIA official statement, the accused persons attempted to extort money (70,000 GEL) from a notarized representative of a Canadian investor who had acquired land in the region.
Naveriani’s family claims that the land purchased by the investor belonged to them for decades. The family has thus asserted that it was entitled to a payment from the investor. However, Naveriani and her relatives failed to privatize the land in question and thus have no legal claim to it.
“Legally the people arrested did not have a right on that land; I want to underline and emphasize this,” said Nina Khatiskatsi, Programme Director with Transparency International (TI) Georgia. “When we are talking about the rule of law and about the framework of law, those people were not the owners.”
William James Simpson, a Canadian investor, purchased the land in Mestia from Giorgi Svanidze. “The land purchase agreement was legal and was registered in the Georgian National Agency of Public Registry (Svanidze had been an owner of this land for several years),” reads the MIA statement. Simpson’s official representative in Georgia was David Kukhilava, a resident of the town of Jvari. The MIA statement cites Kukhilava as saying that the total sum of extortion was 220,000 GEL, with 70,000 GEL being the first payment only.
Kukhilava refused to comment on the case, saying only that the situation was “very complicated.” He identified William James Simpson as his partner and said he had no knowledge of whether Simpson worked for any organization in Georgia.
A Jim Simpson from Canada currently works as a manager for the Capital Partners of Georgia (CPG), an investment company founded in 2008. Giorgi Svanidze is one of the company’s founders. According to CPG’s website, the company aims to increase foreign direct investment in Georgia and conducts a number of construction projects. It also purchases tracks of land in the regions.
In a phone interview with The FINANCIAL Giorgi Svanidze from CPG denied purchasing the land in question in Mestia and said he knew nothing of the case.
The land featured in the case comprises 22,000 sq. meters and includes a ruined building of the former Soviet tourist complex Ushba. According to the MIA statement, Simpson planned to build a new hotel there.
Many pieces of land in the mountainous regions of Georgia belonged to various families for centuries. The locals know and respect such traditions, never falling victim to disputes with neighbours. Relying on a family heritage and knowledge of the surroundings, they know which family owns which piece of land. Furthermore, Mestia still boasts an elders’ council: an unofficial body residents turn to in case disputes do arise, thus by-passing the court and any official procedures. “They have these very ancient rules that still exist there,” Khatiskatsi said.
Even though the lands of Svaneti were collectivized during the Soviet era, after the collapse of the USSR the locals divided the land according to the distribution prior to the Soviet times. Many families, however, have not privatized their tracks.
“The lands were not privatized legally but the thing is that we have to take into consideration the rules that still exist in the mountains and we have to encourage these people to fall under the existing regulations,” Khatiskatsi said. “And it is a responsibility of the local government to assist these people who are not very qualified in these procedures and to help them as much as possible.”
The problem with privatization in the mountainous regions is primarily due to the prohibitive price of land and various procedural difficulties. During the last year-and-a-half privatization of the lands in Mestia was, according to TI Georgia, suspended, thereby preventing some families from laying legal claims on their land.
Reportedly, Naveriani’s family has a document dating back to 1903 which certifies that the family purchased the land that year. Comments by Shota Utiashvili, head of the Department of Information and Analysis at MIA, released on July 14, however, read that “…there is only one type of document, which confirms real estate ownership in Georgian legislation, and it is a record at the Georgian National Agency of Public Registry, which is equally valid for lowland and mountainous areas.”
The problem with land ownership in Mestia might not be exclusive to this case. Another family, Japaridze, not related to Naveriani, also lost their land to a foreign investor in a similar pattern, according to TI Georgia.
“In the end it might become a problem for many families,” Khatiskatsi said. “If this continues and if many families really do not own their land then foreign investors could buy the land, leaving the locals without property there.”
Residents in Mestia rely on the land for agricultural purposes, sustaining their livestock by growing fodder on their tracks.
Furthermore, Mestia has recently become the third region to be designated as a tourist destination by President Mikheil Saakashvili. It follows in the footsteps of Sighnaghi, Kakheti, and Anaklia, on the Black Sea coast. The region’s capacity to accommodate an all-year-round ski resort made it an attractive destination, especially considering that this tourist magnet could be effectively paired with a sea resort in Anaklia.
“When Sighnaghi was announced as one of the tourist spots, there were lots of different talks and discussions about how property was taken from different people and how they were not paid enough or just forced to leave their places, given some compensation but not really the amount that was the market price. Then this started in Anaklia and the next spot was Mestia,” Khatiskatsi said.
TI Georgia said that they have been providing assistance to land owners from Anaklia in three separate land dispute cases. “Two of them withdrew, probably after being paid by the Government (at least a little bit),” Khatiskatsi said. “Now we have one client with serious damages.”
Asked to comment on the issue, Utiashvili said that geographical location was not relevant. “Our position is very clear: the Georgian law says that property is yours if it is registered in the Public Registry,” he said. “Any other form of ownership, be it some sort of customary, tribal, traditional are illegal basically, so be it Anaklia, Svaneti or elsewhere we will sell the land that is state owned and not touch the land that is private owned, but the only thing supporting the judgment is whether it is registered in the Public Registry.”
The announcement of Svaneti as a ski resort and Anaklia as a seaside resort occurred in Bakuriani on January 18, 2010. “These resorts have big … potential and working on the development of corresponding infrastructure has already started,” reads a statement on the website of the Ministry of Economic and Sustainable Development of Georgia. The Senaki-Mestia road is planned to be rehabilitated in 2010, “which will allow the functioning of a unique summer touristic [sci.] product – allowing the combination of … both the sea and skiing,” the statement reads.
Four NGOs (TI Georgia, the Georgian Young Lawyers Association, the Human Rights Centre and the International Society for Fair Elections and Democracy) released their original statement on July 10, 2010, arguing that the arrest of Neli Naveriani was not only political, but was also conducted in a manner that violated the detainees rights. The MIA replied with a statement on July 14 denying the arrests were political but were instead based on evidence uncovered during an investigation. This was later rebuffed by a July 16 statement from the same four NGOs.
Neli Naveriani is a leading member of an opposition party, according to the July 10 statement. She was elected to the local council in 2010 and was among “the first people to publicize the violence perpetrated against the members of opposition parties in Mestia on 3 May,” the statement reads. Naveriani also undertook investigation of the budgetary spending of previous councils and attempted to identify and resolve land disputes in the region.
The case also revived discussions on corruption and whether some investors, be they Georgian or foreign, are unfairly allowed to gain access to land while others are denied the same privilege. “We are talking about the decrease of corruption on a lower level, but there is a lot of talk about elite corruption but unfortunately it is just talk and thus very hard to prove with facts since elite corruption belongs to a very small part of society that is closed,” Khatiskatsi said.
According to Shota Utiashvili, the Mestia case speaks of corruption from a different direction: that aimed against business interests and foreign investment. “Unfortunately, this case proves that there are still problems related to corruption, which require the efforts of everybody, including the Government, mass media and NGOs to eradicate them. The 10 July statement by four NGOs cannot be considered part of such an effort,” read his comments published on the MIA website. The comments also deny any connection between Naveriani’s political activities and her arrest.
Naveriani and her three relatives are currently in pre-trial detention and unavailable for comment. According to the MIA statement, the police have started an investigation into this criminal offense (case number 083100054), punishable by Georgian Criminal Code’s Article 181, 2nd part, A and G clauses.