31 percent of timber, mining, agriculture concessions in 12 nations overlap with local land rights


Rights and Resources Initiative (RRI) release

Date of publication: 
19 September 2013

Billions of dollars in investment risk ignored; financial report released on eve of global conference

Interlaken, Switzerland — A new analysis of land-use concessions in emerging market economies (EMEs) in Africa, Asia and Latin America shows that at least one out of every three hectares licensed for commercial exploitation is overlapped by indigenous community land.

The quantitative analysis found that land tenure is a statistically significant source of investment risk in emerging market economy concessions and extends across all land-dependent sectors, regardless of concession type. It shows that 31% of all commercial concessions (by area) are overlapped in some way by community lands, putting at risk some $5 billion of implied agriculture production value.

The paper, produced by The Munden Project for the Rights and Resources Initiative, used Geographical Information System (GIS) mapping technology to analyze over 153 million hectares of concessions across 12 emerging market countries. Projects ranging from agriculture and forestry to mineral extraction were analyzed in Argentina, Brazil, Cambodia, Cameroon, Chile, Colombia, Liberia, Indonesia, Malaysia, Mozambique, Peru, and Philippines. The results quantify significant overlap between commercial concessions and indigenous community lands, identifying 3,750 overlapped concessions covering a total of 48.3 million hectares.

“The financial risk posed by insecure land tenure has not previously been examined in a systematic way,” said Lou Munden, Chief Executive Officer of The Munden Project. “Moreover, investors and operators considering projects in EMEs do not currently incorporate it in their diligence processes. Legal, civil and sometimes violent opposition to projects can impair profitability and disadvantage local populations. However this increasingly common cause of disruption does not feature in the methodologies of ratings agencies or insurance companies, and is overlooked in valuation models used to examine investment risk.”

The research was released on the eve of a major international conference, held in Interlaken, Switzerland. Co-organized by the Rights and Resources Initiative, (RRI), the International Land Coalition (ILC), Oxfam, Helvetas Swiss Intercooperation, and IUCN, the International Union for Conservation of Nature, the event will bring together government and business stakeholders involved in land investment with leaders of Indigenous Peoples and other local communities and NGOs.

Participants will explore strategies to strengthen land tenure for local communities, consolidate ideas and plans to scale-up and more effectively deploy operational strategies, catalyze new collaboration and alliances, and identify next steps to take these strategies forward.

“Natural resource developers and their investors face a major challenge. Their profits—along with their ability to meet global demand—can plummet if the situation on the ground becomes unstable,” said Andy White, Coordinator of Rights and Resources Initiative (RRI). “However, the communities that live on the lands in question face different challenges, including poverty, hunger, and encroaching development that threatens to force them from their land. The conflicts that often result are avoidable.”

The new report builds a framework for financiers and insurers of mining, agriculture, and forestry projects to evaluate land tenure risk. Spatial data, gathered from a wide variety of public and private sources, was used to map out concession areas and community-claimed lands in the 12 countries. Where community and concession areas overlapped, the authors calculated the financial impairment that could arise from conflict triggered by the developments.

“The first step to managing risk in any investment is to understand it. What we propose is a statistical method that identifies and quantifies the problem,” said Lou Munden. “At present, very little data is available to investors and operators who wish to assess and manage land tenure risk, creating a highly emotive debate around the issue. By taking a quantitative approach that uses GIS mapping, we can start to adopt a more pragmatic approach to the avoidance of conflicts over land tenure that seldom benefit any of the parties involved.”

Key findings of the report include:

Some 31% of the total national concession areas overlap with known local-community territory, putting a production value of $5 billion at risk for agriculture alone. The largest example is provided by Argentina, where 84% of national soybean concessions are overlapped by community-claimed areas, with an average area overlap of 26% and potential impairment value of $4.6 billion. 83% of all commercial timber concessions in Cameroon are overlapped by community forests, putting a potential value at risk equal to 0.4% of national GDP. The research mapped mining concessions in Chile, Colombia and the Philippines, where 30.5% of affected concession areas are overlapped by indigenous territory. Land disputes over the Philippine Tampakan mining project have placed $5.9 billion of investment at risk in a project that is projected to add 1% to national GDP.

The report also highlights the current problems in insuring investors against risk in these multinational resource transactions. Traditional policies that consider national governments to be parties to the transaction focus on the nation’s ability to pay its debts, not how it navigates indigenous and other local communities’ land rights. As a result, transactions in Malaysia, a nation with widespread land conflict, are easier to insure than those in Mexico, which has a lower credit rating but stronger and more secure local property rights.

Some firms offer political risk insurance, but these policies only protect against confiscation (or nationalization), currency issues, and political violence. Without provisions protecting against land disputes with local communities, the investment risk remains exposed and untenable. Provisions nullifying the policies if “coercive practices” are utilized by governments or investors also make the inevitable land disputes that much more costly.

“Investing in emerging market economies does not have to be fraught with so much financial risk,” concluded White. “But investors need to understand that in this day and age, no land is empty. The people living on the land need to be identified, involved, and respected. They are striving for a better life; economic development should not bring them harsher poverty instead.” ###

The Rights and Resources Initiative (RRI) is a global coalition of 13 Partners and over 140 international, regional and community organizations advancing forest tenure, policy and market reforms. RRI leverages the strategic collaboration and investment of its Partners and Collaborators around the world by working together on research, advocacy, and convening strategic actors to catalyze change on the ground. RRI is coordinated by the Rights and Resources Group, a non-profit organization based in Washington, DC. For more information, please visit www.rightsandresources.org.


Companies face global risks in land claim disputes

By John Heilprin, Associated Press – http://www.ctpost.com/news/science/article/Companies-face-global-risks-i...

19 September 2013

GENEVA (AP) — A new study suggests a huge risk for global businesses: Local communities are disputing almost a third of the land involved in commercial land deals in 12 countries in Africa, Asia and South America.

The study for the U.S.-based Rights and Resources Initiative highlights a topic being studied by the World Bank, development organizations and other participants from 40 countries at a conference that began Thursday in Interlaken, Switzerland.

It used mapping technology to analyze over 153 million hectares — about the size of the Gulf of Mexico — licensed for everything from agriculture to forestry to mining in Argentina, Brazil, Cambodia, Cameroon, Chile, Colombia, Liberia, Indonesia, Malaysia, Mozambique, Peru and the Philippines.

The study found at least 31 percent of the land — an area equivalent to the Appalachian region that stretches from southern New York to northern Mississippi — overlapped with indigenous land claims. It said that put at risk at least $5 billion worth of agriculture production, mostly in Argentina.

According to the study, 84 percent of Argentina’s soybean concessions overlap with community-claimed areas, potentially tying up $4.6 billion in production.

In Cameroon, 83 percent of all timber concessions overlap with community forests, putting at risk nearly a half-percent of the nation’s entire annual economic production, the study found. And in the Philippines, one mining project on disputed land is projected to add 1 percent to the country’s annual economic output.

The study focused on countries with the best data, but its authors pointed out that those with the least data present more of a risk because of the unknowns.

Andy White, coordinator of RRI, a coalition that includes over 150 organizations, said conference organizers will urge the world to adopt a goal of doubling the amount of land and forests managed or clearly owned by local communities and indigenous peoples by the end of 2018.

Jorge Muñoz, one of five World Bank officials at the conference, said there’s growing momentum to figure out how to solve these problems, and acknowledged that some criticism of the bank’s role in financing major development projects is legitimate.

But he added: “I wouldn’t say we’re part of the problem. We’re a big part of the solution.”

Chris Anderson, director for communities and social performance for British-Australian mining company Rio Tinto Group, said the conference marked the first time officials from across so many fields converged to figure out “how do we recognize people’s rights in lands, but at the same time grow their economies so they improve their livelihoods?”

“We’ve realized that none of us can do any of this alone,” he said, adding that companies “can no longer trust governments” to have all the land ownership rights worked out when they award commercial licenses.



United Nations: Natural resource development a ‘faulty business model’ that deepens poverty

The “resource curse” is alive and well in the global south, as natural resource development deepens poverty…

James Anaya, Al Jazeera – http://ramumine.wordpress.com/2013/09/23/united-nations-natural-resource...

23 September 2013

Economic development is widely assumed to bring the blessings of higher standards of living and to be a quick fix for cash poor countries. However, there are many who look at economic development and instead consider it to be a curse in the “global south” – South America, Africa, and Asia – and also in parts of the more industrialised world where indigenous peoples live.

All too often, development projects consist of a private, multinational enterprise working with a national or local government to obtain access to a natural resource, extract it, and then transport it elsewhere for processing. Residents of the country have access to the extraction jobs but processing, manufacturing and other higher-paying jobs that require technical skills are cultivated elsewhere. At the same time, profits from the project largely do not reach the people who bear the brunt of its environmental and health impacts.

Economists have examined countries relying on natural resource exports for economic growth found that the higher the reliance, the slower the growth. Even worse, this development model often leads to greater corruption and inequality. The typical government-business transactions that provide access to these resources have been referred to collectively as the “resource curse,” an oft-cited yet oft-ignored point that applies to many different sectors of natural resources, from minerals to forest products to raw food staples such as palm oil.

A faulty business model

The reasons for the resource curse frequently boils down to one simple problem: this business model does not recognise the rights of the indigenous peoples and local communities living on the land in question. I am referring to the indigenous inhabitants of the Amazon, for example, or other communities like them throughout the world where the government’s claim ownership of the land and the right to give away the resources as they deem best, and too many private enterprises are willing to play along.

The tragedy is that resource deals in the developing world often target the very people that rely on the land for their survival. They are often deprived of their property, the crops that feed their families, and the forests and land that support their livelihoods without being fully incorporated into the decision-making process. However, the land is not empty and the communities that are there were established generations if not hundreds of years ago. In the case of indigenous peoples, their connections to the land invariably have a longer history than the government deciding what to do with the land. According to the Rights and Resources Initiative, ownership of roughly one-half of the global south is contested, directly affecting the lives and livelihoods of over two billion people. This is no surprise, since over sixty percent of the developing world’s forests are administered by governments – who all too often give it away for pennies per hectare, for the sake of “quick-fix” development.

Deprived of participation and self-determination these folks see their forests and fields quickly shorn of forests, biodiversity and wildlife, destroying their own hope for meaningful economic development and undermining their distinctive cultures.

For an example, consider the push for alternative fuels to help slow climate change, which has led to large-scale biofuel plantations. When a previously forested landscape is cleared to plant jatropha or other biofuel vegetation, emissions result from the industrial clear-cutting methods as well as the decomposition of the plants and woods. It takes decades for the emissions savings from biofuels to compensate for tree-clearing – and if peatland is cleared and drained, it takes centuries. This is not sustainable, and it harms the people whose material welfare and cultural patterns depend upon the land and its resources.

Role of the media

As a United Nations investigator, I have travelled the world and seen first-hand how these issues play out. Time and time again, I find that the attention brought by the spotlight of media coverage keeps all stakeholders honest and helps them act in a more responsible and sustainable manner.

But what keeps me up at night is when there is no spotlight – where resource transactions run roughshod over the people whose very existence is seen to stand in the way of progress. Protests, whether through legal action or street theatre, have few teeth when they can be disregarded without worry. And the transgressions and human rights violations that take place in the dark are unfathomable; one estimate found that the global rate in which activists were murdered doubled between 2002 and 2011, and now exceeds two deaths a week.

We as a global society are at a moment, however, where we can turn the page and write a new story of development, one in which the blessings of the land are shared equitably. The United Nations is leading the negotiations for new Sustainable Development Goals, which will guide economic development and poverty reduction for the next 15 years. These goals should include targets for the recognition of land rights that include rights based on traditional use and occupancy; this would direct attention and much-needed funding to ensure that economic development works to genuinely benefit Indigenous Peoples and the local communities that are on the front lines of natural resource exploitation.

Notably, industry, governments, Indigenous Peoples, and civil society are starting to work together to shape a shared vision in these negotiations. Their coordination – which will be advanced at a strategy conference in Interlaken, Switzerland this week – holds the promise to answer their shared problems of insecure land rights and contested ownership.

We have always viewed the natural resources of the Earth to be a blessing, yet the history of “resource development” on the lands of Indigenous Peoples mostly speaks to the paradigm of the resource curse. It is time to embrace the land and its bounty like they do, transforming development so that all can share in its wealth.

  • James Anaya is the United Nations Special Rapporteur on the Rights of Indigenous Peoples. He recently completed a report for the UN Human Rights Council on “Extractive Industries and Indigenous Peoples”, available at http://unsr.jamesanaya.org.