The Rights and Resources Initiative annual review for 2012-2013 was released recently and highlights a number of evolving trends in resource tenure that threaten to disempower communities and create inequitable development.
Land conflicts continue to wreak havoc on economic development and human rights around the globe, threatening both the financial health of investors as well as the livelihoods of those who live on the land, according to two reports released today.
“Landowners or Laborers: What Choice Will Developing Countries Make?”, a new report produced by the Rights and Resources Initiative (RRI), highlights the key choice facing developing countries in 2013. The choice confronting these nations is whether to embrace a more sustainable development path built on inclusiveness and respect for the rights of all their citizens, or instead to opt for a short-cut, handing out their people’s lands and forests to industrial investors, hoping for faster-paced growth.
“It is unfortunate to see national governments still embracing failed development models, especially when the evidence is so overwhelming,” said Andy White, coordinator of RRI. “In this equation, political stability, democracy and long-term economic gain is often sacrificed for short- term cash.” “Rarely have local communities—and ultimately their national governments—prospered through this development model,” he added. “It’s even more astounding given that investors often fail to prosper as well. This model proved unsustainable in 2012, nowhere more apparent than in Liberia. And now the conflict in Kachin shows that Myanmar could be the next country to fail with this approach.”
“The Financial Risks of Insecure Land Tenure: An Investment View”, a report produced by The Munden Project., examined a number of high-profile land conflicts involving corporate entities around the world. Companies that ignore the issue of land tenure, the report concluded, expose themselves to substantial, and in some cases, extreme risks, whether their investments are in infrastructure, mining, agriculture or forestry. Companies that ignore the issue of land tenure, the report concluded, expose themselves to substantial, and in some cases, extreme risks, whether their investments are in infrastructure, mining, agriculture or forestry.
In examining financial risk, the report detailed five case studies around the world:
• Orissa, India, where a failed venture by the metals and mining firm Vedanta resulted in a negative financial outlook from credit ratings agencies including Standard and Poor’s. The company’s actions have also been connected to an upswing of the Naxalite insurgency in Eastern India.
• Futrono, Chile, where a hydropower project failed when the energy company SN Power didn’t consult with indigenous communities and tried to proceed without consent. The company eventually abandoned its investment and wrote off US$23 million in losses.
• Zanzibar, Tanzania, where the biofuels importer SEKAB strong-armed communities while attempting to purchase 400,000 hectares for a massive plantation with severe environmental impacts. When these efforts were revealed, SEKAB’s attempt to obtain additional credit was denied and the company was forced to sell off assets at a loss of over US$20 million.
• Isiboro Sécure National Park and Indigenous Territory (TIPNIS), Bolivia, which would have been bisected by a major road project planned by the national government. The local communities were never consulted on the project, however, and the national protests that resulted delayed and ultimately sidelined construction. BNDES, a Brazilian development bank, pledged US$332 million for the project but ultimately retracted the grant; Bolivia’s relationship with Brazil suffered as well.
• Grand Cape Mount, Liberia, where the world’s largest palm oil producer, Sime Darby, planned to develop 220,000 hectares into oil palm and rubber plantations after signing a 63-year concession with the national government. Because of inadequate community consultation and compensation, operations have been repeatedly disrupted by tenure disputes.
“So many times in these land deals we see that subsistence farmers are converted into laborers who earn wages below subsistence levels,” added White. “This is not economic progress; some level of conflict becomes inevitable and investments are then halted, retracted or lost.”
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