The Commercial ‘Land Rush’ – human rights-based versus corporate social responsibility models

by Chris Huggins

Over the past few years, investors from high- and medium-income countries, including state agencies, have started to lease large areas of land in lower-income countries for commercial agricultural production. The pattern is likely to continue due to increasing demand for food in emerging super-economies such as India and China, rising oil prices and scarcity of water and land.

Both the numbers of land deals and the size of landholdings being leased or purchased have significantly increased over the past five years. According to the World Bank, the rights to some 50 million hectares in Africa alone have either been acquired since 2006 or are under negotiation, while NGOs like GRAIN estimate that a far greater area is affected. Countries selling or leasing farmland to investors are primarily low-income countries in Africa, and to a lesser extent Asia and Latin America. In Africa, countries selling or leasing very large areas of land include Sudan, Mozambique, Mali, and Ethiopia, and many other countries have seen smaller deals. The Agricultural Investment Agency in Ethiopia is reportedly considering offering foreign firms three million hectares of land over the next two years.

Principle investors include governments and firms from Bahrain, China, Egypt, India, Japan, Jordan, Kuwait, Libya, Malaysia, Qatar, Saudi Arabia, South Korea and the United Arab Emirates. Investors are motivated by both profit margins and domestic concerns over food security. The global agriculture sector is faring well despite the ongoing financial crisis, as demand for food is less income-elastic than other commodities. This suggests that foreign direct investment for food production is likely to increase, rather than decrease, in the future. Demand for bio-fuels is also likely to contribute to this trend, as long-term projections suggest increases in the price of oil. In addition, the impending water crisis is likely to have an impact. Governments leasing agricultural land abroad also use foreign water to grow the crops, effectively importing ‘virtual water’ along with the food.

Considerable opposition exists within international and local civil society to what is often described as a commercial ‘land grab’, though personally I prefer the term ‘land rush’.  Critics are concerned that some communities may be displaced with adequate compensation. Food security is also a worry – some land deals involve farmland currently contributing to domestic consumption being used to produce bio-fuels, or export crops. This can increase food prices in countries which are chronically food insecure. Agribusiness will tend to be isolated from the rest of the rural economy, setting up its own supply chains and transport networks and hence contributing little to the local economy. In some cases, natural areas such as forests are being converted into farmland, raising environmental concerns. Some critics also warn that the negative environmental impacts of highly intensive farming, such as polluted rivers, degraded soils, and depleted aquifers, will affect local communities.

This trend has been described by some as a new form of “neo-colonialism”, and fears have been raised regarding potential negative impacts on food security, local community relations, and environmental conditions. In August, 2008, the Director-General of the Food and Agriculture Organisation, Jacques Diouf, stated that, “The risk is of creating a neo-colonial pact for the provision of non-value-added raw materials in the producing countries and unacceptable work conditions for agricultural workers” according to an article in the Financial Times.  The ‘colonial’ element here, then, is extraction of resources from the global South in the absence of processes of value-addition at the point of extraction.

The land rights dimension of the phenomenon is often described as a problem of “ill-defined property rights”. This overused phrase is generally unhelpful, as it suggests both a lack of clarity in existing land tenure systems and a technical-legal solution (better ‘definition’). In most cases, property rights are relatively well-defined at the local level by customary systems (such as religious, community-based, or informal systems) but are not recognised by the national legal regime. The reality, then, is a land conflict, which can only be resolved through a legal-political process involving negotiation and, most likely, forms of compensation for some of the land rights claimants. This is by no means a purely technical issue.

The land tenure aspects are only a part of the complex web of social, economic and political issues which the ‘land rush’ represents. Food security and food sovereignty, labour relations and rights, water rights, questions of group politico-legal identities (particularly where land claimed by indigenous peoples is affected), the politics of the ‘green revolution’, and concerns over ownership and control of important infrastructure are just some of the more obvious issues at stake. It would be simplistic to reduce the questions to those of ‘land rights’.

For many major international organizations, the problem does not seem to be that the commercial ‘land rush’ is taking place, but the way in which it is occurring. Emphasis is thus placed on regulating the relationships between the various actors. FAO, UNCTAD, IFAD the World Bank and other powerful stakeholders including several governments are collaborating on a voluntary code of conduct for land acquisitions, which has become known as the principles for ‘Responsible Agricultural Investment’ (RAI) and which includes the following principles:

  • Existing rights to land and natural resources should be respected.
  • Investments should  strengthen, not jeopardize food security
  • Processes should be transparent, monitored, and accountable
  • All affected should be consulted, and agreements recorded.
  • The rule of law and best practices should  be respected, and economic viability should be assured
  • There should be desirable social impacts, and no increase in vulnerability
  • Environmental impacts should be quantified and mitigated.

The RAI has been generally supported by institutions such as IFPRI, which have argued for such a voluntary code of conduct. However, many civil society organizations are bitterly opposed to it.

One the one hand, the RAI principles have the merit of putting the focus on the responsibilities of the agricultural investor, rather than (for example) the ‘host’ government. However, they are voluntary, and it seems that there will be few points of leverage to push companies to comply. Existing models for regulating trade and investment , such as the Extractive Industries Transparency Initiative (EITI) and the Kimberley Process for ‘conflict diamonds’ have some ‘teeth’, in part because the resources are traded on the global market. Consumers and governments acting as transit-points for these resources can put pressure on companies through consumer boycotts, confiscation of suspect resources, or other means.  (And even though these processes have had some regulatory success, there are also significant loopholes).

In the case of the ‘land rush’, many commercial land deals are arranged between a small number of actors, for example, host country ‘X’, investing state ‘Y’ and investing company ‘Z’. Rather than being sold on the global market, the agricultural produce is shipped directly back to country ’Y’ for domestic consumption. Global consumers or other governments may have no access to the commodity, so there is little leverage to ensure that principles are honoured. Even for agricultural commodities to be sold on the global market, it may be difficult to track them given the difficulties and expense involved in tracing a few hundred tonnes of a particular harvest of maize, for example, amid the hundreds of thousands of tonnes being shipped around the globe at any particular time. In short, there are no guarantees that the principles will be honoured. Investors are likely to engage in ‘window-dressing’ exercises – such as some limited displays of generosity to local communities – while conducting business as usual.

Critics of the RAI approach such as the La Vía Campesina, FIAN, Land Research Action Network and GRAIN, released a joint statement in which they characterise the principles as “a move to try to legitimize land grabbing”. Some critics prefer that the commercial land rush be resisted through a number of means, including the courts. Any set of voluntary guidelines, they say, will be used for public relations purposes to put a ‘spin’ on their activities, and will marginalise existing legal standards, which should be the focus of attention. In particular, a number of experts, including the Special Rapporteur on the Right to Food, have argued that many commercial land deals violate the International Covenant on Economic, Social and Cultural Rights. Article 11 of the International Covenant on Economic, Social and Cultural Rights, requires every State to ensure for everyone under its jurisdiction access to the minimum essential food which is sufficient, nutritionally adequate and safe, to ensure their freedom from hunger. In a briefing note, the Special Rapporteur writes that:

States would be acting in violation of the human right to food if, by leasing or selling land to investors (whether domestic or foreign), they were depriving the local populations from access to productive resources indispensable to their livelihoods. They would also be violating the right to food if they negotiated such agreements without ensuring that this will not result in food insecurity, for instance because this would create a dependency on foreign aid or on increasingly volatile and unpredictable international markets, as large proportions of the food produced thanks to the foreign investment would be shipped to the country of origin of the investor or sold on the international markets.

Mr De Schutter goes on to list a range of other human rights provisions. In concluding agreements on large-scale land acquisitions or leases, States should take into account the rights of current landusers in the areas where the investment is made, in order not to violate rights to housing and land affirmed by the Committee on Economic, Social and Cultural Rights in its General Comment No. 7 (1997) on the right to adequate housing, as well as the more recent Basic Principles and Guidelines on Development-based Evictions and Displacement.

The right to self-determination and the right to development of the local populations, particularly indigenous communities, are guaranteed by the 1989 ILO Convention (n° 169) concerning Indigenous and Tribal Peoples and have been reinforced by soft law standards such as the 2008 UN Declaration on the Rights of Indigenous Peoples as well as regional human rights jurisprudence in Africa and the Americas. A range of other global and regional human rights treaties could be cited. Even states that are not signatories to such agreements are bound by many international standards to the extent that they embody international customary law.

Of course, it has been notoriously difficult to enforce many treaty obligations regarding economic, social and cultural rights (in contrast to those regarding civil and political rights). Civil society organizations, local communities affected by government actions or inaction, and international bodies have invested time, money and effort in legal battles, with some successes (the ruling on the land rights of the indigenous Endorois people in Kenya is a recent case-in-point). In general however, progress on many human rights issues is frustratingly slow, and international legal fora may prove to be rather impractical instruments for the regulation of commercial land acquisitions in a very fast-moving industry.

While the debate is often framed – as in the title of this blog – as a choice between either a set of voluntary principles or recourse to international law, it is important to remember that a commitment by corporations, governments or other actors to any set of voluntary principles or codes of conduct does not preclude legal action against them. Indeed, many people will see the principles laid out in the RAI document not as ‘voluntary’ but as legal obligations under existing legal standards. Perhaps it would be an interesting exercise to produce an annotated version of the RAI principles, with links to the particular international agreements that oblige governments and other actors to meet these standards.

The current research on specific examples of commercial land acquisition being coordinated by organizations including iied, the International Land Coalition (ILC), and PLAAS will highlight particularly acute abuses of international legal standards. Most people involved in land rights issues and a rights-based approach to international development more broadly are likely to agree that the most abusive companies (and governments) should be vigorously prosecuted using national, regional and global legal fora. Activists are likely to be identifying possible legal approaches at this moment.

Chris Huggins is researching the ‘land rush’ as part of the International Land Coalition’s Commercial Pressures on Land project. He welcomes responses to this article.

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12 responses to “The Commercial ‘Land Rush’ – human rights-based versus corporate social responsibility models

  1. Pingback: ILC Commercial Pressures on Land Blog » Blog Archive » The Commercial ‘Land Rush’ – human rights-based versus corporate social responsibility models

  2. If I had a dime for each time I came here! Amazing read!

  3. Chris when will the ILC research study on ‘Commercial pressures on land’ be released?

    Thanks

    • Chris Huggins

      Thanks for all the comments. The ILC research study is due to be published later this year, probably a couple of months from now.

  4. Having seen onsite in Ethiopia the effects of the “land rush” I have drawn some conclusions that I like to test with you! Lease rights (or registered land use rights) instead of land ownership and an open land market makes this “land grabbing” possible. In the case of Ethiopia customary or registered landholders will be compensated for land expropriated by the Government for agricultural investment (which is considered a public purpose). BUT the compensation cannot be used to buy other land because land cannot be sold, according to law. The government expropriates and leases out to foreign and national investors. Could this happen in countries where the law did not state that “land belongs to the State”?

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