27. In January 2002 the alleged victim asked for allocation, by way of expropriation, of an area that was granted in full ownership by the Municipality of Tela to its municipal labor union. The union objected to enlarging the deed of the Garífuna Community of Triunfo de la Cruz, but its opposition was overruled by the INA, leading to further investigations. At present, the area is not being used because the conflict has yet to be resolved. 28. The allocation process, as explained by the State, begins at the INA with a request to expropriate private lands when their owners are not using them efficiently. 29. The INA, the State indicates, is willing to resolve the issue and is making efforts toward that end, such as asking for reports on payment of taxes to the proper agencies, so as to corroborate the possession exercised over the properties in question. The alleged victims should follow the internal procedural steps; their appeal to the IACHR fails to recognize the efforts made by Honduras to protect its indigenous peoples and the Garífuna people. 30. As for the domestic procedure to be followed, the State explains that the allocation procedure starts at the National Agrarian Institute, either its central or regional offices, with a view to expropriating private lands inadequately used by their owners. This is a way of recovering national and community land illegally held by private individuals. The State says that this procedure may be set in motion by the INA itself or by a complaint from a group or a community filing a sworn affidavit. Proceedings take place ex officio up to a certain point, then a second stage takes place before the National Agrarian Council acting as High Tribunal for agrarian affairs, as established in Articles 58, 137 and 150 of the Agrarian Reform Law and Articles 1, 2, 137, 138, 139, 140 of the Administrative Procedure Law. The interested party is at liberty to use the above procedure and offer such evidence as it deems appropriate. After evidence is admitted and produced, a ruling is issued according to the evidence. 31. With regard to the offer of friendly mediation made by the Commission at the hearing of October 18, 2005, the State contends that its willingness to resolve the issue is apparent from the measures taken in this connection in Honduras, and that settling the matter will have a high financial cost, involving payments for parcels of land and improvements. The State is not at present in a sound financial position, it explains, and submits a copy of the position of the Tela municipal labor union opposing the request to expand the deed submitted by the petitioner. 32. At the IACHR hearing, the State said that it understands the mistakes made and that there is still a chance to settle these conflicts through its internal procedures. 33. Honduras, the State argues, does not deny the rights of these communities and is one of a few States to have issued full ownership deeds to indigenous peoples. But in this particular case the alleged victims did not exhaust the remedies available under Honduran law. Accordingly, the petition should be ruled inadmissible. IV. ANALYSIS A. Competence of the Commission ratione loci, ratione temporis and ratione materiae 34. The Commission has jurisdiction ratione loci to hear this petition because it alleges violations of rights protected by the American Convention that are said to have taken place in the territory of a State Party. 35. The Commission has jurisdiction ratione personae in terms of passive standing because the complaint is directed against a State Party, as generically provided in Article 44 of the Convention. 36. The Commission has jurisdiction ratione personae because of the active standing of members of the Triunfo de la Cruz Community under Article 44 of the Convention, which 5