Report on Local Democracy in Cyprus - CPL (8) 3 Part II

Rapporteur: Dr Ian MICALLEF (Malta)

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EXPLANATORY MEMORANDUM

A. INTRODUCTION

1. Since 1994, the Congress of Local and Regional Authorities of Europe has been conducting a systematic programme of investigations into the state of local democracy in member states of the Council of Europe. So far, 19 countries have been investigated¹. In all cases, the investigation is conducted by a team led by a rapporteur appointed by the Institutional Committee of the Congress or of a Chamber. The report of the investigation is placed before a Plenary Session of a Chamber and a Recommendation is made. The investigation is conducted and the report and Recommendation are formulated in the light of the principles and standards established by the European Charter of Local Self-Government of 1985.

2. In October 2000, the Institutional Committee appointed Mr Ian Micallef (Malta) as the Congress rapporteur to conduct an investigation and to prepare a report on local democracy in Cyprus.

B. THE CYPRUS INVESTIGATION

3. This report is based principally upon information supplied to the rapporteur by the Government of Cyprus, the Union of Cyprus Municipalities and the Union of Cyprus Communities². Documentary material (including the texts of relevant Laws) was supplemented in discussions held in Nicosia, Cyprus in the course of two visits to the country on 18-19 December 2000 and 18-20 March 2001. On those two visits the rapporteur was accompanied by Professor Chris Himsworth (United Kingdom) as consultant, Mr Rinaldo Locatelli (Head of the Congress Secretariat) and Ms Irina Blonina (Secretariat). An additional visit of Mr De Bruycker, a Belgian consultant, was organised at the request of the President of the Union of Cyprus Municipalities on 12-13 February 2001. Details of the programme of the three visits are set out in the Appendix to this report.

4. The reporter and his team would like to thank all those in Cyprus who devoted their time and resources in providing information and other guidance leading to the preparation of this report. The representatives of the Union of Cyprus Communities and of the Union of Cyprus Municipalities and their staff were particularly helpful and welcoming and representatives of the Government of the Republic of Cyprus and of the House of Representatives were also very generous in the assistance they gave during the team’s visits. Warm thanks are also due to those mayors and community leaders who welcomed the team to their areas.

C. CYPRUS: THE GENERAL SITUATION

5. The Republic of Cyprus was created on 16 August 1960 when the country ceased to be a British Colony. The colony had been established formally in 1925 although British occupation and control of the island dated back to 1878. New governmental institutions including the House of Representatives were provided by the independence constitution of 1960. Cyprus became a member of the Council of Europe in 1961.

6. The constitution of 1960, was not however a success. The institutions intended to regulate relations between the two communities and achieve power sharing never functioned effectively, the end result being the events of 1963 and the “Green Line” division of Nicosia. The island was cut in two after the Turkish military intervention of July and August 1974. These events and their aftermath dominate the politics of the island to this day. This report is based only on the situation in the part of the island under the control of the internationally recognised Government of Cyprus³.

7. Cyprus signed the Charter of Local Self-Government on 8 October 1986 and the Charter came into force on 1 September 1988. On notification, the Republic declared that it did not consider itself bound by Art. 5 (Protection of local authority boundaries) nor by para. 2 of Art. 7 (Financial compensation etc for local elected representatives). Article 5 was, however, subsequently ratified with affect from 16 October 1998. The Constitution of Cyprus does not give any explicit protection to local self-government but it declares that all ratified international conventions - including, therefore, the Charter of Local Self-Government - have “superior force to any domestic law” (Art.169).

8. The practicalities of local self-government in Cyprus have been greatly affected by the political backdrop already described and this will continue, whatever the eventual outcome. In the meantime, the structure of local government is best seen as a divided regime. There are, on the one hand, the municipalities. These are currently regulated by the Municipalities Law of 1985 (as amended) and are discussed in section E of this report. The area outside the municipalities has been subject to different treatment. Until 1999, there was provision for “village” government, with the separate establishment in some areas of “improvement boards”. In 1999 local government outside the municipalities was reorganised by the Communities Law. This established a general pattern of community councils and these are discussed in section F. It should, in addition, be noted that, for the purposes of central government rather than those of local self-government, Cyprus is divided into six districts (one of which and parts of two others are in the northern part of the island). The District Officers’ functions include responsibilities in relation to the local authorities in their district. ⁴

D. SOME CONTEXTUAL ASPECTS

9. Before embarking on a detailed analysis of the law and practice of local self-government in Cyprus it will be helpful to consider three aspects of Cyprus’ general situation to place that analysis in context:

(a) Cyprus as a small country

10. Although Cyprus is by no means the smallest member state of the Council of Europe, with a land area of 9,251 sq.km. and a total population of about 731,000 (of whom some 642 700 live in the part of the island under control of the Government), Cyprus is a small country in European terms⁵. The size of a country is not determinative of conditions of local self-government and it is, of course, necessary that all countries which have acceded to the Charter, of whatever size, must satisfy the conditions laid down in the Charter. It is, however, the case that small countries present different problems for constitutional architects, whether they are concerned with institutions at the national or sub-national level. Physically, smallness imposes certain constraints. In addition, smallness provides the conditions where the conduct of government - even at the national level - is much more readily seen to be close to the people. Distances and lines of communication are shorter. In respect of local self-government, a small country may more readily be seen to satisfy the general values of decentralisation which present a large country with greater problems. On the other hand, the institutions of decentralisation may paradoxically be more difficult to achieve. At the level of local government, it may be more difficult to contemplate, in terms of both resources and efficiency, the range of institutional possibilities (e.g. a multi-tier system of authorities) that are available to larger countries. In addition, smallness - the overall smallness of the national community - may, in combination with other social and historical factors, create psychological barriers to the development of some reforming measures quite readily achieved elsewhere. None of these considerations, however, need stand in the way of inter-authority cooperation.

(b) The Cyprus question

11. It is difficult to overstate the impact on the whole of political and constitutional discourse of Cyprus, of the “Cyprus question” itself. The failure of the Independence Constitution of 1960, the events of 1963 and then, above all, the Turkish military intervention in 1974 and the subsequent occupation⁶ of 37% of the island ever since have taken a huge toll. A full account cannot be undertaken here but an overwhelming consequence of the division of the island has been the suspension of normal politics. Every aspect of the present governmental arrangements for Cyprus and all discussion of future change is dominated by the question of how to bring about a resolution of the crisis⁷. As far as the future is concerned, this is nowhere more evident than in the current negotiations over Cypriot accession to the European Union. The accession of Cyprus to the European Union would have consequences on the future of the country.⁸ Prospects for regionalisation in Cyprus are similarly integrated into the resolution of the Cyprus question⁹.

12. But the same is true of constitutional discussion at less elevated levels and local government is no exception. As the Government of Cyprus does not recognise the division of the island, all legislation and all administrative arrangements extend officially to the entire Republic. Officially the Republic is divided into six districts (for central government purposes) even though the territories of one (Kyrenia) and parts of two others (Famagusta and Nicosia) are within the territory not controlled by the government. Under the Municipalities Law of 1985, there have been created 33 municipalities. Of these, 24 function “normally” in the government-controlled zone but nine lie within the uncontrolled area. In law, however, these municipalities retain their formal recognition even if, in practical terms, the officially recognised mayors and councils have lost virtually all influence on the ground. Elections of the mayors and councillors continue with recourse to electoral lists composed of 1974 refugees, wherever resident in the south of the island, and their descendants who assert a continuing connection with a municipality in the north¹⁰. Although the maintenance of these municipalities may be seen as formal, it does involve mayors in representational work on behalf of refugees and the campaign for their future return. Mayors of displaced municipalities also continue to exercise powers as marriage officers.

The same position is broadly reflected for the displaced communities, although their resources and opportunities for activities are less. Formerly only appointed, leaders and councils will be elected from December 2001.¹¹

13. If the partition of the island has produced the consequence of these displaced northern municipalities, the events of 1974 have also resulted in very practical consequences for government - both central and local. The influx of 200,000 refugees produced both immediate and longer-term problems with regard to the infrastructure provided for those who were received into municipalities or communities. Central government takes full infrastructural responsibility for settlements consisting entirely of refugees - and responsibility pro rata for mixed settlements - a situation which sometimes gives rise to disputes as to precisely how responsibility should be shared between central and local government. Another, more specific, consequence of the occupation of the north has been the division of the city of Nicosia along the “green line”. For a few purposes, notably a sewerage system serving the population on both sides of the line, the representatives of the Greek and Turkish Cypriot communities of Nicosia started to meet in 1977. These meetings led to unwritten agreements between the two representatives which are still being implemented.

14. In addition to these practical problems of survival in a divided Cyprus, the suspension of normal politics has other consequences. Whilst acknowledging the modifications brought by the Municipalities Law of 1985 and, with greater impact, the recent Communities Law of 1999, substantial reform that might bring about a structural reorganisation of local self-government, whether to unite municipalities in the area of the capital or other big cities or to combine small communities or, for instance, to confer substantial new powers, is made difficult in advance of resolution of the Cyprus question as a whole. To the extent that reorganisation might entail constitutional reform¹², this option is foreclosed by the substantial barriers in the way of amendment of the Constitution. If a resolution of the question drew closer, presumably in the context of EU accession, this would, of course, liberate the discussion of reform from the severity of existing restraints and provide an entirely new framework within which options for reform could be appraised.

(c) Accession to the European Union

15. The Republic of Cyprus has reached a very advanced stage in its negotiations for accession to the European Union (EU) and membership may now be expected between 2002 and 2004. These negotiations have not, of course, directly involved the local authorities of Cyprus but the progress towards accession does have consequences for local authorities and their Associations in at least three ways. In the first place, municipalities and communities can be expected to be closely implicated in the implementation in Cyprus of the Republic’s new obligations under the acquis communautaire and also to be involved themselves in the work of the EU’s own Committee of the Regions. For this reason, the Union of Cyprus Municipalities has already been taking steps to brief itself on both the obligations and opportunities involved. Equally, there has been some recognition on the part of the Government of Cyprus of the need to consult both Unions on relevant issues during the accession negotiations but the Unions claim that this consultation should improve.

16. Secondly, the approach of accession provides for local authorities, as for the rest of the country, the prospect of a resolution of the Cyprus question itself. There is no dissent in Cyprus about the advantages for the country of EU membership. To a small extent the case for membership is economic. To an overwhelming extent, however, it is political. Cyprus’ application is made in respect of the whole island of Cyprus and hopes have been raised in the Republic that the rapid progress made is indicative of clear EU support not only for the application itself but probably also for a view that EU membership is not incompatible with the situation in the northern part of the island. This may, in turn, bring pressure for a resolution on the "Turkish Cypriot administration" not seen since 1974. If this were to be the case this would have the general liberating consequences for Cypriot politics already discussed.

17. One more specific consequence associated with EU membership would be a quite new imperative in the direction of regionalisation in Cyprus. Consideration is already being given to options for the designation of regions for economic development purposes (urban and mountain regions), whether within the south of a divided Cyprus or across Cyprus as a whole. A regionalised Cyprus could be expected to bring profound effects for local self-government in the country.

The solution of the Cyprus problem depends upon the resolutions of the United Nations on Cyprus and the negotiations co-ordinated by the United Nations are at present at stake. It does not seem that the willingness to find a solution is the same on both parts; in particular, the Greek Cypriot Community is for a Federal state, whereas the Turkish Cypriot Community favours a confederal system with two sovereign states. Moreover, opinions differ greatly in matters such as security and the refugees' right to return. The general international context is not necessarily favourable for a quick solution to the Cyprus problem. On the contrary, the possible future accession of Cyprus to the European Union and the candidature for the accession of Turkey to the European Union might create a new political environment favouring the relaunching of negotiations of the Cyprus problem.

In the case of Cyprus, the existing European experiences in the field of federal states could provide inspiration for the future structures. The Congress of Local and Regional Authorities of Europe, in co-operation with the Venice Commission, could offer their services to the United Nations in the case where the negotiation process gets underway in a better political context.

E. LOCAL SELF-GOVERNMENT IN THE MUNICIPALITIES

18. The legal basis for local self-government in the municipalities of Cyprus is provided by the Municipalities Law (Law No. 111) of 1985 (hereafter “the Municipalities Law”) This repealed and replaced Municipalities Laws passed between 1964 and 1984 and has itself been amended many times since. The Municipalities Law provides a comprehensive code. After introductory provisions (Pt. I), it provides for the establishment and abolition of municipalities (Pt. II); townspersons (Pt. III); elections (Pt. IV and Sched. 1); the administration of municipalities - including the functions of councils, committees, mayors, and municipal officers (Pt. V and Sched. 2); financial matters - including estimates, town funds, municipal rates, accounts and audit (Part. VI); the duties and powers of municipalities (Pt. VII and Scheds. 3-7); and some miscellaneous and procedural matters (Pts. VIII and IX) and temporary (emergency) and transitional matters (Pts. X and XI).

19. There are 33 municipalities in Cyprus, of which nine are in the northern part of the island and, since 1974, have been displaced to the Government-controlled area but maintain their legal status. There are six principal municipalities - Nicosia, Limassol, Paphos, Larnaca, Kyrenia and Famagusta (the last two of which having been displaced).. But some municipalities are much smaller. Overall, the 33 municipalities comprise 65% of the population of the country. Whilst two municipalities in Government-controlled Cyprus have populations of over 50,000 and two more of over 40,000, five have populations of under 10,000 and eight of under 5000. Provision is made for the creation (by a procedure including a plebiscite) of new municipalities in towns or villages with a population of over 5000 or where the Council of Ministers is satisfied that an area has the financial capability to function adequately and efficiently as a municipality (Municipalities Law s.4). Similarly, there is provision for the merger of an area into an existing municipality (s.5) and for the abolition of municipalities (s.6). Municipalities have separate legal personality (s.7). The name of a municipality may be changed by the Council of Ministers on the application of the municipality (s.7A) and, on the application of the relevant local administrative authorities, the municipal boundaries may be varied (s.8).

20. Every municipality is administered by a council which consists of the mayor and a number of councillors - between 8 and 26, depending on the number of voters (s.11). Councils - mayor and councillors separately - are elected by a system of proportional representation for a period of five years (s.12). Subject to certain disqualifications, all resident townspersons over the age of 18 are entitled to vote, with special provision made for the former residents of displaced municipalities and their descendants (ss.9, 13).

21. To qualify for election as a mayor or councillor, a person must be at least 25 years of age (s.15), but certain disqualifications apply (s.16). These include the disqualification of not only Government Ministers, members of the House of Representatives and judges but also a person who is a salaried public servant, educationist or municipal employee, or an employee of a “semi-state organisation” (s.16). The exclusion from membership of local councils of all state employees, however lowly or non-political the position, does place a very broad restriction on the civic rights of such persons which is difficult to justify. The explanation offered by representatives, both of the Ministry of the Interior and of the municipalities themselves was in terms of the need to avoid personal conflicts of interests in small communities and in the small community of Cyprus.

The Administration of Municipalities

22. The administration of municipalities is, in large measure, a matter for regulation by the council (s.43). General provision is made for councils to appoint committees of their choice (s.45) but every council is required to appoint a management committee of which the mayor must be a member and, ex officio, the chairman.¹³ The management committee is required to perform certain functions, including the preparation of the municipality’s estimates and to assist and advise the mayor (s.47).

23. The mayor is stated to be the executive authority of the municipality in every official activity. The mayor is required inter alia to execute the decisions of the council and is “in charge of all the services of the municipality which he guides, directs and controls” (s.46). Mayors are also empowered to act as marriage officers (s.46(1)(h)) - a power which may be delegated to other councillors.

24. The mayor receives a stipend and expenses and the deputy mayor and councillors receive emoluments and expenses provided for in the municipality’s budget, approved by the Council of Ministers (s.52).

Municipal Officers

25. Councils have powers to appoint officers to fill certain defined principal posts and “subordinate posts” (ss.53-55). One point of current controversy is s.53(1) of the Municipalities Law which states:

“The council shall have power, with the approval of the Council of Ministers, to apply schemes of service for the posts of the municipal service the specific number of which shall appear in the annual budget of the municipality with the salary scale corresponding to each post”.

This provision has proved ambiguous in practice: What exactly has to be approved by the Council of Ministers? What does it mean to “apply” schemes of service? More importantly, however, the section appears to require detailed central government approval for municipalities’ schemes of service and salaries and raises questions in terms of Article 6 of the Charter. The attitudes of the government and the Associations differ on this matter. The Ministry of the Interior has hitherto favoured the use of s.53 to achieve some uniformity of provision between conditions of service in central government and the municipalities. It is understood, however, that, if the Attorney General advises that the section is of no use for this purpose, the Ministry would not seek its amendment but would instead join the municipalities in supporting its removal from the Law. This provision could be replaced by a system whereby the national government defines some general principles on municipal administration.

Functions

26. Part VII of the Municipalities Law makes provision for the duties and powers of municipalities. There is a general statement that “The municipalities shall have competence to administer all the local affairs thereof and all the powers lawfully vested in a municipality shall be exercised by the council and the mayor as provided in this law” (s.83). Subsequent sections of the law then specify a number of functions. Within the limits of the financial means of municipalities, responsibilities include water supply, drainage, the construction and maintenance of streets and bridges, street naming, street cleansing, public health, cemeteries, certain licensing functions, and many others (ss.84, 85). Sewerage Boards which operate independently consist of the municipal councils, with the mayors as chairmen. Their duties are described in the Sewerage Systems Law (No.1 of 1971) and include the construction, supply, maintenance, expansion and operation of sewerage systems. The Sewerage Boards have their own services and staff, while their income comes from the imposition of taxes and fees on users and land owners. According to the Town and Country Planning Law (N.90/72), the planning function is exercised by the central government through “Development Plans” (Island Plan, Local Plans and Area Schemes) which define the general policy and principles. Planning control (including enforcement) is generally exercised by the Town Planning and Housing Department except in the areas of four municipalities (Nicosia, Limassol, Larnaca and Paphos) which are delegated planning authorities. Most, and perhaps all, other municipalities aspire to be planning authorities - subject, where necessary, to schemes of cooperation and coordination. Municipalities, through their Union, have asked that they should also have responsibilities for schools maintenance and for social welfare services and road traffic control.

The Financial Arrangements of Municipalities.

27. Municipalities in Cyprus are funded from a variety of sources (ss.73-79). The main sources of revenue are taxes, fees and duties (professional tax, immovable property tax, hotel accommodation tax, fees from issuing permits and licences, fees for refuse collection, fines etc) The table below indicates the percentage of each of these sources of income of the municipalities’ total income for the year 1998:

Notes:

1. Total income for the 24 municipalities in 1998 amounted to approximatelyC£51.000.000 Neither the annual state grant for municipalities nor state grants for projects are included in the above figure. The annual state grant for the year 1998 amounted to £5.038.542.

2. Only 15 of the 24 municipalities provide water.

3. 90% of the income from fines refers to traffic fines.

4. As from 1^st February 2001, tolls which were an important source of revenue for the four municipalities of Nicosia, Limassol, Larnaca and Paphos, are no longer collected by municipalities and income lost therefrom will be replaced by a state grant.

5. Slaughterhouse fees are basically collected by the Paphos municipality.

6. Tax on horse racing bets is only collected by the municipality of Ayios Dhometios.

28. In addition, the revenue of each municipal council “is subsidised annually by a grant of the Republic proposed by the Council of Ministers and approved by the House of Representatives” (s.67). Although the amount of the grant paid annually to municipalities is not prescribed in the Municipalities Law, the government has committed itself to a stable level of funding now fixed at 1% of the total of government revenues for 2001. In 2000, the aggregate general grant was C£7.8m. In 2001, this has risen to C£ 8.6m which has already been paid according to the Union of Cyprus Municipalities. The Union of Cyprus Municipalities has requested that the 1% commitment should be endorsed by statute.

29. The distribution of the total amount of grant between municipalities has become, as a practical matter, a task undertaken by the Union of Cyprus Municipalities which proposes the rules for distribution between its members. These are based largely on population figures. A third of the aggregate grant is divided equally between all municipalities, thus providing an important equalising effect. The division of the remaining two thirds is (pro rata) according to the total number of inhabitants. For the year 2000, the figures were as follows:

Note: An additional grant of C£600.000 was received by municipalities in the year, which was distributed to them on the basis of their capital expenditure. This grant aims to compensate municipalities for part of the VAT paid by them on this type of expenditure.

30. The government also contributes towards the cost of urban development projects (usually road construction projects) which fulfil certain criteria and are approved by the Ministry of the Interior. In order to qualify for this government contribution, such projects must be significant in terms of the main road network or in terms of traffic management. Usually the government covers two thirds of the cost (by means of a variety of funding mechanisms) and the municipality the remaining one third. From the point of view of the municipalities, such shared funding of infrastructural projects is often seen not so much as a government grant to them as municipal contributions to central projects.

31. Another important feature of the financial regime of municipalities is the obligation to prepare an annual estimate of revenue and expenditure. The Municipalities Law requires each municipality to submit its estimate for the approval of the Council of Ministers (s. 65). The estimate must be submitted to the Minister of the Interior in duplicate by way of the District Officer and the Minister is then required to “submit the estimates together with any suggestions and observations of his own to the Council of Ministers for approval” (s. 66). Further provision is made for the revision of estimates and also to ensure compliance by municipalities with the estimates, subject to permitted degrees of variation. On the face of it, these sections of the Municipalities Law impose a severe form of central control (and one not confined merely to questions of legality) over the budgeting procedures of municipalities. However, the government regards compliance with the statutory rules as a mere formality since the Council of Ministers has not refused approval of any municipality’s estimates (nor of a transfer between accounts) in recent years. On the other hand, there is a shared understanding that the rules are usefully retained as a protection against possible abuse at a future date. Negotiations are held between the officials of the Ministry of the Interior and the concerned municipality before the draft budget is submitted to the Council of Ministers for approval.

Administrative Supervision

32. It has been noted that, at least in the formal terms of the Municipalities Law, there are some points at which administrative supervision and control by central government are significant - especially in relation to financial and staffing matters. In practice, however, the degree of control is substantially moderated in processes of negotiation between the two partners. It does also appear, however, that there are a number of smaller controls which, though of lesser significance, could usefully be reviewed. It should also be noted that there are some concerns on the part of municipalities that the current audit procedures (Municipalities Law, ss.80-82) are used by the Auditor General to extend audit beyond the monitoring of the legality and financial propriety of municipal decisions.

F. LOCAL SELF-GOVERNMENT IN THE COMMUNITIES

33. In 1999 the new Communities Law (No.86(1) of 1999) was passed by the House of Representatives. This repealed and replaced the Village Authorities Law and the Villages (Administration and Improvement) Law to provide a general pattern of regulation of local self-government outside the municipalities. There are 356 communities in Cyprus which together include some 34% of the population and 90% of the territory of the country. Most communities (348 out 356) have populations of less than 5000. Probably 150 have populations of less than 500 and some communities are extremely small, many having been devastated by depopulation.

34. The principal consequence of the Communities Law (which is still in the process of implementation since the first elections under the Law will not take place until December 2001) is to create arrangements for the communities which, in formal terms at least, closely resemble those for the municipalities. There are parallels between the provision made for the leaders/mukhtars and councils of communities and those for the mayors and councils of municipalities. There are, however, some important differences. The Communities Law makes distinctive provision for the creation of what are called a “complex of communities” (s.7). The Minister of the Interior must declare a complex of communities following application by the communities concerned and the holding of a plebiscite of registered electors. (A community may subsequently leave the complex following a plebiscite of electors - requiring in this case the approval of two thirds of the voters) The council of a complex consists of the leaders of the constituent communities together with members of the constitutional community councils in proportion to population. The president of the council of the community complex is the leader of the largest community. Once a complex is formed the powers of the constituent councils are confined to those normally attributed to a council leader (ss.12(1) and 46. See below.) There are currently only three complexes in existence, each of which comprises two communities.

35. Another feature of the Communities Law is the provision made (s.11(5)) for the opportunity to create two separate councils in those communities comprising both Greeks and Turks. This is, however, a provision required by the Constitution but of no practical significance today. Otherwise the electoral law applicable to municipalities is broadly repeated for communities.¹⁴ There is a similar disqualification from holding of the leadership or membership of a council by anyone who int al “is a salaried public servant, an educationalist, in active police or military service or an employee of a semi-state organisation” (s.16(2)) Special provision is made by s.17(4) of the Communities Law to permit the Council of Ministers where “existing circumstances and the general public interest necessitate” to replace elections with an appointed mukhtar. It is understood that the Ministry of the Interior would not contemplate the use of the provision - unless perhaps, very exceptionally, in circumstances of a tiny population in a community (less than 50 inhabitants). The Union of Communities does, however, fear the possible abuse of the section and would wish its removal or replacement.

36. The Communities Law (s.48)provides that community leaders are entitled to compensation in accordance with the Community Leaders (Compensation) Law and general allowances are currently payable by reference to population. Certain additional allowances may also be payable for specific assigned tasks.¹⁵ No allowances or expenses are paid to councillors.

Communities Administration

37. Staffing arrangements are dealt with in Part 6 of the Communities Law. Councils are empowered to employ both council officers and workmen (ss.49-52). However, s.49(1) makes a council’s determination of the number of posts (of officers), the schemes of service and the salary scale for each post subject to the approval of the Council of Ministers. The Minister of the Interior is also required to approve a council’s regulations prescribing “the procedure to be followed for the filling of vacant posts, the general terms of service of the officers of the council, their duties as well as the exercise of any disciplinary power on them” (s.49(2)). In addition to these formal restrictions, the actual recruitment of employees is in practice curtailed by constraints on financial resources. It is understood that in only 80 communities out of a total of 356 is there any employee at all! One consequence of a general absence of paid employees is that duties fall back on community leaders¹⁶, with some administrative assistance from the staff of the District Officer¹⁷ against payment by the communities.

Powers

38. Formally, the powers of communities (and complexes) closely resemble those of municipalities. The Communities Law vests a large number of powers in councils (as with municipalities, “to the extent of their financial means”) which are listed in the Law itself (ss.81-98). Thus councils are stated to be responsible for domestic water supplies; sewerage systems; the construction and maintenance of streets and bridges; refuse collection and disposal; the construction and operation of public baths; and the construction and operation of slaughter houses. Formally, councils also have a very large number of regulatory and licensing functions but, in practice, the lack of resources and staff impose severe restraints. Only one community currently has powers of building regulation but the Union of Communities would wish this extended, at least in relation to small developments. Where the District Officer carries out the function in lieu, it is understood that fees are remitted to the communities. As in the municipalities, the community leader is stated to be “executive authority of the council” (s.46(a)). The leader “presides over the council’s services”; represents the council; and executes the council’s decisions. The leader exercises duties under the Registration of Births and Deaths Law, but, unlike mayors in municipalities, is not a marriage officer - the Union of Cyprus Municipalities has expressed the view that mukhtars should be given that role. The leader is formally required to “maintain law and order in the community” but it is understood that this is a relic from earlier times.

39. Despite the very broad powers formally granted to communities councils, however, it is very apparent that the actual exercise of these powers is in practice severely restricted. Powers are indeed exercisable only to the extent of the financial and human resources of the councils and these are very limited.

Finances

40. Even in respect of the financing of communities, the legal rules are very similar to those of municipalities. Communities may derive income from a wide range of sources - all payable into the Community Fund (s.65). In addition to specified fines and penalties and donations and bequests, councils are entitled to “taxes, fees, tolls or rights” recovered under the provisions of the Communities Law. These include the “immovable property tax” (ss.74-80); fees for hotel accommodation (s.83(k)/(t) and Sched.3); fees for professional licences (s.86 and Sched. 4); as well as fees for hawking licences (s.92), building permits and refuse collection.

41. The Communities Law requires each council to set an annual budget (s.64). A council must submit its budget to the District Officer for approval. It is stated that the District Officer has one month within which to examine the legality of the budget and that the budget may be rejected only if it contravenes the provisions of the Communities Law (s.64(3)). Nevertheless, the Union of Communities expresses the opinion that in practice the control of the District Officer goes beyond a legal supervision.

42. Grants from central government are also payable (s.65(a)). In practice, however, the position of communities is much weaker than that of municipalities. First, for most communities, local funding resources are precarious. The sources to which the communities theoretically have access at their own decision are, in practice, not very productive. In some cases, the reason is technical and, for instance, the professional tax relies on a person’s business address which will, for many, be within the area of a municipality rather than within the rural community in which the person resides. There is also, however, a distinct reluctance to impose a tax such as the property or professional tax which may have the effect of making the community unattractive to the resident population and deter new inhabitants. Secondly there is no guaranteed annual general grant to communities as there is for municipalities and, above the level of trivial projects, most communities are entirely dependent upon specific grant assistance for any project they wish to undertake. Projects are approved - or indeed proposed - by the government through its District Officers on a project-by-project basis with financial assistance available on the basis of percentage levels prescribed in advance by the Ministries of the Interior and of Finance for each community by reference to assessed income from their own resources. The consequence is that, in effect, most communities can undertake no expenditure without the express approval of central government. Communities are seen to be carrying out not their own projects but those of the government, to which they, the communities, make a financial contribution. In the case of communities entirely inhabited (and pro rata, where not) by persons displaced by the Turkish military intervention the entire cost of development projects is borne by the government. Across development projects as a whole, there is a Government contribution of about C£13m per year to total expenditure of about C£15m.

The financial weakness of most communities is a matter of concern to their Union which urges inter alia the provision of a general grant to communities equivalent to that paid to municipalities, even if this were at the expense of funding for specific projects. A general grant would provide staff and the practical opportunity to carry out functions (such as street maintenance) on behalf of the large percentage of the population of Cyprus resident in communities. (It is understood that recent negotiations between the Union and the Ministry of the Interior in which the Union has sought not a general grant but a reduction of 10% in community contributions to development projects have been suspended. The Union would like at least the equivalent of 1% of the national budget to go to the communities, as it does to the municipalities. There is even a case, it argues, for more than 1% since the municipalities are, for the most part, generally richer than the communities.)

Administrative Supervision

43. It will be apparent from earlier paragraphs that central government supervision and control is much stronger in relation to communities than municipalities. In particular, the District Officer, as the government’s local representative is given wide powers under the Communities Law.

44. A list of central government powers include the powers concerning the schemes of service and appointments procedures for council officers (s.49) and the power to allow the community leader or a council member to be secretary of the council (s.51); the power to approve council budgets (s.64(3); the power to approve payments from the Community Fund (s.66(d); the power of the District Officer to approve the borrowing of money (s.83(a), (b) - and also the District Officer’s powers under s.83(f) (acquisition of water rights), (h) (sale of surplus water), (m) (charitable contributions), (t-d) (payments to departing staff), (t-g) (cancellation of debt recovery), (u) (water pipes). The District Officer has to be informed of cases of disqualification from council membership (s.16(54)). Resignations as community leader, deputy community leader or member of a council are to be submitted to the District Officer (s.36(1)). The District Officer has a general power to exercise control over the legality of the decisions of a council (s.42(1); the District Officer and Council of Ministers are involved in expropriation procedures (s.63); the District Officer approves the naming or renaming of streets, etc., (s.82(e)). Many of these powers of supervision and control date back to a period prior to the development of elected local self-government in rural Cyprus. Some are doubtless of little operational significance. Other controls are, however, real and represent a noticeable subordination of local democratic decision-making. Taking into consideration the position of the Union of Cyprus Communities, the recommendation will bring to light the controls which pose the most problems or seem to be excessive.

G. GENERAL ASPECTS

Local Authority Associations

45. The two local authority associations of Cyprus - the Union of Cyprus Municipalities and the Union of Cyprus Communities - perform significant functions on behalf of their member councils and in the interests of local self-government in general. Both appear to be well-organised and broadly representative of their councils. Both have good working accommodation and their own staff. Both associations make representations to central government. Both are also consulted by central government although both complain that their views are not always fully taken account of by government. The Union of Cyprus Municipalities enjoys a generally stronger position, reflecting the greater strength of their member councils and the special role of the Union in the distribution of central grants has been mentioned. On the other hand, relations between the two Unions are conducted on the basis of an assumption of equality between the two and they cooperate well on matters of mutual interest although cooperation could be strengthened in relation to external affairs. The Unions, especially the Union of Cyprus Municipalities, have international connections with their counterparts in European countries and these have been of increasing importance as the prospects for EU accession grow. The Union of Communities is also seeking overseas contacts, including within the Congress.

Legal Protection of Local Self-Government

46. Although there is no explicit protection given to local authorities by the Constitution of Cyprus, they do have the general right of access to the courts enjoyed by other public or private persons if their rights guaranteed either by the Constitution or legislation appear threatened. Since the Constitution protects international conventions (see para 7), the Charter of Local Self-Government could be invoked in legal proceedings and there appears to have been at least one instance where this has occurred¹⁸. Certainly, local authorities can, where they can demonstrate a direct interest, use the courts to challenge Government decisions or omissions which they believe to be based on a false interpretation of the relevant legislation¹⁹, even though the possibility of challenging the legislation itself may not be available.

H. CONCLUSIONS

47. On the basis of the findings set out in the earlier sections of this report, it is possible to reach some broadly optimistic conclusions about the state of local democracy in Cyprus. In line with the principal requirements of the European Charter of Local Self Government, local government in Cyprus is given legal recognition in the Municipalities Law 1985 and the Communities Law 1999; there are many thriving local authorities regulating and managing a substantial share of public affairs in their areas; there is a broad commitment to democracy and popular involvement; and, especially as manifested in the two local authority associations, there is a vibrant recognition of the ideals of local self-government in general. That said, however, there are also some weaknesses in the current system of local self-government in Cyprus, all of which are well recognised by those in the country itself. It would not be possible to set these out in great detail. Less still would it be possible here to set out a list of proposed reforms. It would be presumptuous to do so. It may, however, be useful to sketch out two strands of further enquiry and of possible future reform which might be embarked upon.

48. The first is simply a project of legal and administrative modernisation. The two principal laws on local government are relatively recent and have been subject to further recent amendment and revision. At many points, however, it is widely acknowledged to be the case that such processes of revision and redrafting have not been taken far enough. The laws still contain many relics from the past and would benefit from review. It may be that much of the older material is recognised as simply inoperative and, therefore, inoffensive but it would be preferable if statutory changes, however formal, could be made. The advantages of clarity and certainty in the law are obvious. If this is accepted, a comprehensive review - perhaps by a joint working party representative of both central and local government - might be the best way forward. Its remit would include scrutiny of the provisions on central government control of local staffing and budgetary arrangements as well as less significant controls such as that over street-naming. Of course, such a review would demand resources; at some point it might encounter difficulties produced by the current immutability of the Cyprus Constitution; there may be a feeling in some quarters that the time is not ripe for a review in advance of broader constitutional progress on the Cyprus question. In the meantime, however, the texts of the two laws remain unsatisfactory and modernisation is required.

49. At some points in the current system of local government in Cyprus, reform needs to go further than statutory revision and a new balance needs to be struck. This is to some extent an issue for local government in the municipalities but to an even greater extent in the communities. There appears to be a broad acceptance of the need for reform in the direction of strengthening the local authorities themselves. The small size and lack of financial and staff resources of many authorities creates something of a vicious circle which makes it difficult to create the conditions of real local authority autonomy. For authorities to have more powers and more freedom from central direction and control, they need greater size, whether by amalgamation or by more systematic coordination and joint operation across wider areas and across larger populations. In the urban areas, including that of the capital Nicosia, the coordination of contiguous municipalities and communities needs to be strengthened in order to create much greater local capacity to plan and provide services and to remove the need for the present level of reliance upon intervention - and the inevitable accompanying control - by central government. In the rural areas where many communities are tiny, the need to strengthen local institutions is very clear. Central and local government have different perspectives on the current role of the District Officer. He or she may be the benign coordinator of local affairs and representative of the district to the higher echelons of central government. The District Officer may, on the other hand, sometimes appear intrusive and dictatorial. What seems to be agreed is that, for the role of the District Officer to be diminished, a substantial strengthening of local government would be required. The barriers to such reform should not be underestimated. While it might be within the formal competence of the House of Representatives to ordain the necessary changes, obstacles in the shape of historic commitments to the names and places of local communities are powerful barriers. It cannot be easy to persuade today’s mukhtars that it is their obligation to abandon their inheritance.

50. Some response is required, however, to the present situation. The communities represent a very substantial section of the population of Cyprus and their rights under the Charter require protection. There needs to be a way of establishing a virtuous circle in the direction of greater local institutional strength. Perhaps the answer lies in the much more widespread use of “complexes” of communities? Perhaps there is a need for greater centrally-offered inducements in the direction of greater cooperation and joint action? Perhaps there is a need for new forms of mandatory cooperation? Equally there may be some advantage in sowing of the seed corn of greater powers and greater financial freedom, perhaps on a pilot or experimental basis in certain areas? Whatever the measures deployed, however, the need for reform is clear.

51. It might, of course, be advantageous if the more technical form of review described in para 48 could be combined with the substantive review in paras 49-50. If this were the case, another reforming measure might be to merge the two existing laws into a single Local Government Law. This need not have the consequence of losing the distinctiveness of the forms of local government in the two types of area. It might indeed provide the opportunity for drawing more clearly the distinctions between the two. The goal of a single law incorporating an integrated vision of local self-government might be an additional catalyst in the direction of beneficial change.

APPENDIX

1. First visit (Nicosia, 18-19 December 2000)

2. Visit of Professor De Bruycker, Belgian consultant, and Mr Locatelli, Head of the Congress Secretariat (Nicosia, 12-13 February 2001)

3. Second visit (Nicosia-Larnaka-Kakopetria, 17-20 March 2001)

¹ Italie, Turquie (1997), Albanie, Bulgarie, Lettonie, Moldova, Royaume-Uni, Ukraine, Russie (1998), Allemagne, Ex-République yougoslave de Macédoine, Finlande, Pays Bas, Saint Marin (1999), Estonie, France, République tchèque (2000), Lituanie, Slovénie, Chypre, Irlande, Hongrie, Slovaquie (en cours).

² Municipalities have a status equivalent to that of cities; communities have a rather rural character and do not have the status of municipalities.

³ The Turkish Cypriot "administration" has been denied any international recognition.

⁴ Indeed, the scheme of service for District Officers still refers to their having responsibility for the “supervision, direction and control” of local authorities in their district.

⁵ Others, such as Malta, Liechtenstein, Luxembourg, Andorra and San Marino, are smaller.

⁶ See the opinion of the European Court of Human Rights in the case "Loizidou v Turkey" (1997) 23 EHRR 513.

⁷ At the time of writing, Cyprus is involved in negotiations, the current stage of which began in New York in December 1999. There have been five rounds so far and there may be a sixth.

⁸ See paras 15-17 below.

⁹ Ibid.

¹⁰ Refugees are entitled to two votes in local elections - one in their place of residence and one in the displaced northern municipality.

¹¹ Communities Law, ss.5, 11(2). Displaced communities elect a leader, deputy leader and three members.

¹² Or, for instance, to confer constitutional status on the Charter.

¹³ The Municipalities Law also provides for a deputy mayor (s.36) elected by the councillors from their own number. The deputy mayor inter alia chairs the management committee in the absence of the mayor.

¹⁴ S.11(3) of the Communities Law gives recognition to what are called “municipal areas” which are (mainly historically created) neighbourhoods within communities where leaders/mukhtars have limited powers.

¹⁵ Schedule 2 of the Communities Law provides for payment of certain further (largely archaic) allowances.

¹⁶ There is specific provision that where a council does not employ a secretary or an officer with appropriate qualifications, the community leader shall exercise the duties of a treasurer (s.73).

¹⁷ The Communities Law also contains an unused provision (s.51) which enables the District Officer to fund a secretary for a community.

¹⁸ Pandelides v Leanzi (1991) 3 CLR 273. But that case raised doubts about the status to be accorded to the Charter. Without the issue having been raised in argument, the court questioned whether some provisions of the Charter were self-executing.

¹⁹ For instance, the Municipality of Nicosia challenged (unsuccessfully - but the decision is under appeal) the government’s decision to locate the Cyprus Stock Exchange outside the limits of the Municipality. There was also a Supreme Court challenge to the government’s interpretation of s.53 of the Municipalities Law. More routinely, there have been actions brought against the government under the streets and buildings legislation.