Parliament Reviews New Bill to Regulate Uninhabited Island and Lagoon Leases

The Maldivian Parliament has accepted a government bill aimed at reforming the legal framework governing the leasing of uninhabited islands and lagoons. The proposed legislation seeks to repeal the existing Maldives Uninhabited Islands Act and establish more comprehensive procedures for the allocation and management of these natural assets. Submitted by Saudullah Hilmy, Member of Parliament for Thinadhoo North, the bill outlines how the President will designate uninhabited islands for specific uses, including tourism, fisheries, agriculture, industrial development, and social or state purposes. Under the proposed framework, local councils will maintain authority over leasing islands within their jurisdictions, except for those designated for tourism and industrial purposes. Conversely, the ministry responsible for the specific use of a lagoon will manage its leasing process. The bill allows for commercial leases to be granted to Maldivian-registered companies, sole proprietorships, and re-registered foreign entities, while individual citizens and registered associations may lease islands for non-commercial purposes. For large- and medium-scale industrial activities, as well as aquaculture, lagoons may be leased provided the investment meets a minimum threshold of USD 64,851. The bill sets a standard lease term of 21 years for islands designated for specific purposes, with a maximum allowable extension of up to 50 years. Islands not designated for a specific purpose may be leased for shorter terms of five years, with a possibility of a single five-year extension. Financial penalties for non-compliance are significant. Violations on islands under the five-year arrangement can attract fines up to USD 32,425, while breaches on other leased islands or lagoons may result in fines as high as USD 64,851. Rent and acquisition fees will be determined by the ministry responsible for financial matters. To ensure stability, existing lease agreements will remain valid after the law takes effect, though they will be subject to the new legal provisions, excluding existing payment schedules. The bill was accepted with the support of 57 Members of Parliament and has now been referred to the Committee of the Whole House for further review.