Most transactions on land acquisition are done between host governments and private corporations.
The investments in land are realized through acquisition or long-term lease contracts and they are predominant – but not only - in poor or developing countries, where the land system is based on informal and traditional laws.
The main actor is the private sector, including agribusiness, investment banks, hedge funds and commodity traders. However, in the last past years, States and sovereign wealth funds have begun to play a very significant role. In many instances the government is charged with negotiating the deals and, in turn, provides incentives to the private sector to invest.
National governments hold the real power, yet most governments and their bureaucracy are not in a position to handle these complicated processes adequately. Land for large scale acquisitions is legally acquired based on local land law. The problem is that the local law regarding land ownership and land tenure is often vague, out of date, or does not sufficiently protect the rights of small-holder farmers, particularly women, and is not recognized by international agreements.
So, many land deals are not be made on equal terms between the investors and local communities.
Smallholders, who are under thread of being displaced from their land, cannot effectively negotiate terms favorable to them when dealing with such powerful national and international actors, nor can they enforce agreements if the foreign investor fails to provide promised jobs or local facilities. Thus, unequal power relations in the land acquisition deals put the livelihoods of the poor at risk.
This inequality in bargaining power is exacerbated when the smallholders whose land is being acquired for foreign investment projects have no formal title to the land, but have been using it under customary tenure arrangements.
Where local users have vague or non-existent land and water rights in legal international terms, the foreign investor will have its contractual rights to fall back upon as hard rights, enforceable under the chosen dispute settlement forum in the contract.
Many African countries have been encouraged to sign treaties that protect investments against expropriation in order to open the door to foreign investments. These investment treaties have clauses such as “national-treatment”, “most-favored-nation”, “fair and equitable treatment” and “full protection and security” that protect the investors and make that any unilateral termination of land deal by host governments is considered as an expropriation of the investor’s assets that will require payment of compensation.
The host country selling or leasing the land considers the benefits of the deal mainly in the form of employment creation, agricultural development and infrastructure that would come from the investors and will help the economic development of the country. Many of those expectations are weak in the contracts and often do not come to be realized, they are more “promises by word of mouth” than legal obligations. Governments often bet on big producers using laborers to work the land, instead of small family farmers and pay little attention to patterns of shifting cultivation, shepherds, or communally used areas, and therefore claim all these lands to be “unused.”
Land prices offered by governments are often lower than private-to-private deals and the amount paid by the acquisition of the land is not disclosed. In quite a number of cases the investor does not pay the water consumed, while in others the investor is required to pay just an annual water fee independent of the quantity of water used. Many investors get tax incentives and pay none or very little in taxes. In most cases contracts are not made public. Often these contracts do not have clauses ensuring the use of local labor.
The social and economic impacts on local communities could be disastrous, undermining their human right to adequate food, water, work and shelter.
National governments should protect the rights and interests of local communities and land-rights holders. But governments often fail, because of corruption, and they align themselves with investors, enticing them with low land prices and other incentives, and even helping them clear people from the land for personal gain.[i]
Without national and international measures to defend the rights of people living in poverty, this modern-day agricultural land-rush is likely to leave too many poor families worse off, often evicted from their land with little or no recourse to justice.
Few states have their own laws on international investment in land. Legal avenues under national law are limited; villagers could only redress the issue through international human rights law, focusing in human rights to food or to property. But the substantive protection offered by international human rights law also presents shortcomings. For instance, the African Charter on Human and Peoples’ Rights affirms the right to property, but does not require states to compensate right-holders for losses suffered; it merely requires compliance with applicable law.[ii]
The local population who is the most affected is often left out from the land deals and is not even invited to participate. On many occasions the impact of the deal on the local population is not even mentioned. Yet more and more farmers and producer-associations and community-based organizations are making their voice heard with regards to the negotiation process and the policies promoting land grabbing.
There is also a need to put in place mechanisms that favor transparency in the negotiations and the deals and to monitor the agreement to make sure that the social and environmental safeguards are in place.
An additional problem is that a good number of investors do not have experience in agriculture, while others lack knowledge of large scale farming. This can have terrible consequences for the local people, for the environment and for the future of the area.
Finally, there is the need to underline that land acquisitions are often made through investment contracts that are formally correct, do not violate any international or national rule, because any specific set of rules about this topic does not exist yet. In order to understand if land acquisition is a form of land grabbing or not, it is necessary to analyze whether acquisitions or concessions are one or more of the following:
It should be to national governments to perform these analyses, but often they do not because of corruption and because they set themselves up aligned with investors, in exchange for personal benefits. Even when foreign capital or banks that follow responsible policies are involved in land acquisition, investments are rarely made with responsible standards.
Local communities may find protection remedies, which are internationally recognized, but this opportunity is often denied to them.
Where national governments fail to protect the rights and interests of local communities, it is necessary, that the international community take appropriate action to make the problem known, to find solutions to favor good and sustainable investments in land.
[i] Source: J. VON BRAUN. R. MEINZEN DICK, Land grabbing by Foreign Investors in Developing Countries: Risks and Opportunities, Washington DC, 2009, pp. 2 s.s.