‘Property’, Alexis de Tocqueville wrote on the eve of the uprisings that shook Europe in 1848, ‘will be the great battlefield’. As the long shadow of the French Revolution sealed the demise of the aristocratic order and cemented the shift from feudal to capitalist property constructs, Tocqueville expected political contestation to increasingly play out between the haves and the have-nots, in a context where pre-1848 electoral rules restricted suffrage to a wealthy minority. For Tocqueville, contestation would affect not just who owns what but also ‘more, or less, profound modifications to the right of owners’.
Today, many of the world’s most pressing challenges hinge on renegotiating the contours of property; that is, the variable combinations of rights, limitations and obligations through which, in capitalist societies, humans hold ‘things’ ranging from a piece of land to factories or company shares. Extreme wealth concentrations have prompted calls for redistributive action, with concerns raised not just about skewed distributions of material assets but also about inequalities in the rights and obligations applicable to different actors. Meanwhile, measures to confront climate change and biodiversity loss often involve rebalancing property protection and environmental regulation, and moving from ‘natural resource’ appropriation to environmental stewardship. These problems are connected, because consumption by wealthier countries and groups drives a disproportionate share of environmental harm. One question is whether the necessary socioecological transformations require a paradigm shift of comparable depth to the transition from the ancien régime – reconfiguring property’s rights, limitations and obligations and even interrogating its continued relevance as the concept to frame relations between humans and nature.
Property rules are not static but constantly redefined within wider social, economic, cultural, ecological and political change. They cut across diverse legal regimes. Consider, for example, the case of coal phase-outs: determining whether power plant owners should be entitled to any compensation, and on what terms, can engage anything from constitutional property clauses to international treaties on investment, human rights or the environment. Layers of law making set the scene for tensions between national and international instruments with diverse policy objectives and philosophical underpinnings. As large compensation bills can raise the costs of public action, the shifting contours of property affect not only whose rights are protected but also scope for systemic responses to social and ecological problems.
Developments surrounding the ‘social function’ of property – a legal concept codified in several national constitutions – illustrate how contestation over property can shape the relationship between private and public interests. Social function can provide the starting point for far-reaching conversations about the limits of property in the face of pressing public interest goals, but its application has come under greater scrutiny with the rise of international instruments centred on protecting corporate property. Lessons from implementing concepts such as social function can provide insights on reconfiguring property to support socioecological transitions.
From despotic dominion to social function
Doctrinal mythologies have often framed property as an absolute right; eighteenth-century English lawyer William Blackstone famously defined property as a ‘sole and despotic dominion’ over things. Nowadays, most jurists would recognise that rights have limitations and come with obligations. While conventional conceptions frame property and regulation as opposing poles — because public regulation often compresses private property — American legal scholar Joseph William Singer noted that property is itself created by regulation that defines how rights are established, allocated and enforced, and sets limitations and obligations that emanate from the fact of having a right. As a result, the contours of property are historically determined and change over time, affecting distributive outcomes and the evolving balance of private and public interests.
Legislation typically restricts owners from conduct that can produce adverse impacts on the rights of others or on the public interest, or requires them to minimise those impacts, as is often the case in environmental regulation. Law makers have also established more fundamental limits of property, whereby allocating and protecting property is inherently linked to, and qualified by, the pursuit of certain public interest goals. In the early 1900s, French jurist Léon Duguit developed the concept of social function, whereby property does not serve private interests alone, but a public interest, too. As such, its scope and protection are limited by fulfilment of that public interest. Obligations and limits to rights, then, are inherent features rather than exceptional and specifically legislated occurrences.
Several national constitutions have linked property to social function, particularly in Europe and Latin America. Examples include Article 42 of Italy’s 1948 Constitution and Article 58 of Colombia’s 1991 Constitution, which also refers to the ‘ecological function’ of property. Some social function clauses emerged in the context of major political change and of sustained demands to transform socioeconomic relations. For example, Italy’s constitution was developed after the demise of the country’s fascist dictatorship and the end of World War II, with political parties from communists to moderates negotiating the foundations of a new republic. In this context, coupling recognition of private property with the flexible notion of social function reflected a compromise between different political forces and a way to leave to future legislators the difficult task of defining more specific parameters. Social function ideas have also emerged in other countries that experienced political transition and redistributive imperatives, even if the law does not explicitly affirm the social function of property, such as in post-apartheid South Africa.
Social function in practice
In many ways, the notion of social function consolidates property relations. In linking property to a public interest, it legitimises property as a legal foundation of economic ordering. Affirming the social function of property does not necessarily acknowledge or address the violence and dispossession that underpinned the historical development of property law – including, as Brenna Bhandar noted, in the context of colonialism and racialised domination. And unlike ‘rights of nature’ approaches grounded in Indigenous knowledge and the intrinsic value of ecosystems, the social function of property reinforces an anthropocentric perspective whereby humans appropriate nature – the cardinal principle of extractive activities.
But while the notion leaves considerable scope for diverging views about which considerations to prioritise, linking property to social function tends to qualify the protection of acquired rights, enabling potentially significant compressions of those rights for a public interest, and the creation of obligations, if certain conditions are met. Over the years, legislators in different jurisdictions have relied on social function clauses to justify interferences with property in diverse policy areas, from land use planning to housing to agrarian reform, producing highly variable socioeconomic outcomes and at times engendering confrontations with the courts that review the constitutionality of legislation. Social function has also been invoked to consider public interest criteria when determining compensation for expropriation – as in Italy, where constitutional jurisprudence has evolved towards a stronger connection to market value but admits that compensation payments could in certain circumstances be less than full value.
Giving effect to social function in different domains can disaggregate property into variable patchworks of rights, limitations and obligations, depending on the asset and socio-political circumstances. In principle, this could enhance space for what legal scholar Bernadette Atuahene has called ‘transformative’ conceptions of property. Following histories of large-scale racialised land dispossession, such as in Southern Africa, a transformative conception would facilitate, rather than hinder, land restitution and redistribution, partly by differentiating legal regimes so that a family home or farm enjoys stronger protection than commercial assets.
The social function presents ecological dimensions, too. In Colombia, the Constitutional Court invoked the social and ecological function of property to dismiss a challenge to environmental legislation giving effect to the precautionary principle (judgment 293/02 of 2002, para. 4.3). (The petitioner unsuccessfully argued that permitting environmental measures without absolute scientific certainty would enable arbitrary compressions of rights, including property.) The Court also relied on the social function of freedom of enterprise, affirmed in Article 333 of Colombia’s Constitution, and on the right to water and the concept of sustainable development, to strike down measures that exempted certain mining projects from environmental restrictions in the páramos, a fragile mountain ecosystem (judgment 035/16 of 2016, paras. 123–180). The Court highlighted the public interest of protecting the páramos, noting that these ecosystems are significant biodiversity hotspots; they provide the source of water for most of Colombia’s population; and by naturally capturing carbon, they help to mitigate climate change.
Property clauses and international law
The ways in which legislators and courts interpret social function evolve over time. This partly reflects shifting public perceptions and policies but often also tensions between constitutions and other legal instruments. Within domestic law, constitutional social function clauses often coexist with liberal property constructs in the private law sphere (for example, Article 832 of Italy’s Civil Code). And from the 1990s, greater reliance on markets has placed pressure on social function principles. International law also affects conceptions of property. The growing emphasis Italy’s Constitutional Court has placed on the need for a ‘reasonable relationship’ between market value and compensation for expropriation owes much to the jurisprudence of the European Court of Human Rights, which repeatedly critiqued a legal regime that at one point could result in compensation payments of around 30% of market value, further reduced by taxation.
The rise of international investment treaties and arbitration added distinctive questions, within a ‘neoliberal’ project mobilising the ‘rule of law’ to promote economic integration based on market principles and private enterprise. Investment treaties protect foreign investment and are not usually formulated in the language of rights — rather, they express state parties’ mutual commitment to guarantee certain standards of treatment to each other’s investors. But by defining investment broadly, setting standards of treatment and providing legal remedies, the treaties influence the protection of corporate property — whether, for example, public regulation interferes with foreign investors’ rights or ‘legitimate expectations’ to such an extent that it must be accompanied by compensation.
Despite the diversity of their formulation, these treaties tend to place investment protection at centre-stage. Concerns that broad protections can make it more difficult for states to act in the public interest have prompted treaty recalibrations, for example environmental exceptions or ‘right-to-regulate’ clauses, but most treaties do not feature the inherent and more encompassing qualifications that notions such as social function entail. Expropriation clauses typically link compensation to commercial value alone – going beyond a ‘reasonable relationship’ between the two, required by the European Court of Human Rights. Arbitral tribunals have ruled out that public interests such as environmental protection could justify reductions in compensation payments. And while a minority of investment treaties refer to investor responsibilities through non-mandatory clauses, very few treaties establish investor obligations towards those affected by investments or to protect the environment.
Some states with constitutional social function clauses have signed investment treaties that omit explicit references to social function. Expropriation clauses in most of the bilateral investment treaties that Italy has concluded since the year 2000 feature a reference to restrictions on property established by national law or courts; but even there, operational rules on expropriation are similar to those typically found in other investment treaties, including compensation at market value.
These evolutions outline potentially conflicting approaches towards reconciling public and private interests. In disputes about compensation for a coal phase-out, for example, investment treaties would tend to anchor the amount to market value, while an ecologically informed reading of social function could produce a different outcome. Differences affect other aspects as well, and this can lead businesses to seek damages under investment treaties for measures grounded in social function. As Colombian jurist Federico Suárez Ricaurte noted, several arbitrations under Colombia’s investment treaties partly arose from Constitutional Court judgments. This includes three arbitral proceedings related to environmental restrictions on mining in the páramos, which the Constitutional Court justified in part through social function notions. In one such case, a split arbitral tribunal found that measures to protect a páramo did not constitute expropriation but involved inconsistent state action, breaching the ‘minimum standard of treatment’ clause of the trade agreement with Canada. (See this commentary by Jimena Sierra and this webinar organised by the IEL Collective.)
The ‘great battlefield’: shifting the contours of property
These developments illustrate the interplay between conceptions of property originating from different law-making processes: while national constitutions are often negotiated between diverse domestic political forces, investment treaties are concluded between states – frequently in contexts of unequal negotiating power, particularly in relations between global North and South – and are often informed by an international diffusion of treaty drafting approaches more than by constitutional provisions and jurisprudence in the respective states. The interplay has placed pressure on a legal concept designed to further social and ecological aspirations in national polities.
Such evolutions have taken place just as urgent global problems – from climate change and biodiversity loss to social inequalities – require far-reaching transformations that partly hinge on problematising absolute property claims. In fundamental terms, resetting the relationship between humans and nature highlights questions about the continued relevance of the property paradigm that has sustained an ecologically destructive economic model, and about the necessity of learning from Indigenous conceptions that frame that relationship around interdependence rather than appropriation. But divides between social function clauses and investment protection standards point to variability, and thus scope for change, even within prevailing property constructs. Across legal regimes both national and international, redefining the contours of property is a key site for negotiating socioecological transitions.
The blog is based on a talk given in scope of the Sustainable Global Economic Law lecture series at the Amsterdam Law School, available here. Parts of the discussion about social function under national law build on Lorenzo Cotula, ‘Tenure Rights and Obligations: Towards a More Holistic Approach to Land Governance’ (Food and Agriculture Organization of the United Nations, 2021), http://www.fao.org/documents/card/en/c/cb5191en. I am grateful to webinar participants, and to Vladimir Bogoeski, Jimena Sierra, Federico Suárez and Eva Vermeulen, for their helpful comments. As usual, the views expressed are the author’s alone.
(Photo: Michael Gaida)