As the number of cases grows in which real estate must be expropriated from private individuals to build facilities of public importance, such as state roads or facilities for military security purposes, requests to grant state forest land to private individuals as additional compensation are being considered increasingly often. For such cases, joint-stock company Latvijas valsts meži (LVM) has put together a compensation-land basket comprising 79 land parcels covering roughly 214 ha.

Amendments made to the Forest Law in 2023 provide that state forest land may be used as a form of compensation. In the three years since this procedure took effect, two parcels of state forest land have been granted to private individuals as compensation: the property “Brizulīte”, covering 1.47 ha, in Sēme parish, Tukums municipality, and the property “Riekstu mežs”, covering 2.16 ha, in Ķekava parish, Ķekava municipality.

The procedure for assessing and granting property

Whether a land parcel that could be used as a form of compensation is equivalent to the real estate being expropriated is decided by the ministry implementing the project of public importance, through a fair-compensation commission set up for this purpose.

The value of the properties being exchanged is determined by a certified real-estate appraiser. The difference in value must not exceed 20%, and it is settled in cash. If the private individual covers the difference, the funds go to the state budget. The final decision to permit the use of state land as compensation is taken by the Cabinet of Ministers.

To date, in response to requests from fair-compensation commissions, LVM has offered 38 land parcels from the compensation basket that could be used as a form of compensation, selecting them primarily by the area of the property being expropriated from the individual and its location within the specific parish and municipality where that property lies.

While a private individual is deciding on the parcel offered, LVM ensures that its value does not change. To this end, LVM sets the management objective “Biodiversity conservation” for the stands concerned, meaning that no economic activity that could affect the parcel's value is carried out on it. The sooner the owner's response is received, the sooner the land can be returned to economic use.

How the compensation-land basket is put together

To ensure a systematic approach and clear principles for assessing state forest land whenever a proposal is made to use it as a form of compensation, guidelines entitled “Guidelines for Determining State Forest Land as a Form of Compensation” have been drawn up and agreed with the Ministry of Agriculture (ZM). Under these guidelines, LVM has selected 79 land parcels covering roughly 214 ha, out of the approximately 11,200 parcels it manages, that could be used as a form of compensation. LVM reviews the compensation-land basket at least once a year.

The compensation-land basket includes:

• only undivided ZM land parcels of up to 5 ha, which may be built up,
• land parcels that are leased, or that fall within hunting-rights lease areas, may be included,
• land parcels with no access for forestry transport, including cases where providing access would require investment in improving road conditions or concluding easement agreements (access from a state or municipal road may be an exception),
• land parcels with partial restrictions on forestry activity may be included.

The compensation-land basket does not include:

• potential mineral-extraction sites,
• areas under long-term timber-harvesting contracts, areas under building-right contracts, areas under mineral-lease agreements,
• land parcels currently subject to expropriation proceedings,
• land parcels where LVM plans to build forest roads and forest drainage systems,
• nature-reserve territories, specially protected nature areas (ĪADT), except landscape-protection and neutral zones, as well as ĪADT with no zoning,
• individually planned territories (areas that LVM designates for public recreation and environmental education),
• areas of concentrated natural value that LVM has identified as territories for biodiversity conservation (where these make up at least 20% of the land parcel).