Land Tenure Risk: Why it Matters for Companies, Investors, and Communities

by Foley Hoag LLP - Corporate Social Responsibility
Contact

Sugar cane fieldTwo important new reports focus on land tenure conflicts between companies and communities.

In September, the Rights and Resources Initiative released a report entitled, “Global Capital, Local Concessions: A Data-Driven Examination of Land Tenure Risk and Industrial Concessions in Emerging Market Economies.” The report, drafted by the Munden Project, attempts to quantify the percentage of company land concessions that overlap community (particularly indigenous) claims, referring to this overlap as “land tenure risk.”

Using quantitative analysis of GIS data, the authors found that 31% of all commercial land in fifteen emerging economies overlapped documented community land claims, or three of every ten concessions. Given that many community land claims are not even documented, these numbers probably under-account for the extent of the problem. In short, the potential for land disputes abounds.

Given that national constitutions and courts may protect such traditional land rights — even if governments do not when awarding concessions — such lands are the source of legal and operational risks. The report highlights the economic losses companies have suffered when communities have engaged in direct action to halt projects that they believed were on their traditional land. The authors emphasize the need for companies, investors, and insurance companies to factor the cost of land-related conflict into their valuation models.

The report specifically explores steps that investors could take to better quantify the risk related to land tenure when investing in large-scale projects.  Specifically, the report suggests that investors in a given concession examine:

  • The extent to which the concession and local land claims overlap;
  • The national context, including:
    • the degree of corruption in land grants;
    • the extent to which the legal system protects land rights of traditional users;
    • the frequency of legal land disputes;
    • the frequency of violent disputes over land; and
    • the frequency of overlapping claims at the national level.

The report also suggests that investors examine company operational policies on community engagement, noting that such policies should not simply rely on government assurances or the transfer of formal legal title, but rather provide a means to resolve the land claims of traditional land users.

In early October, Oxfam America released a report entitled “Sugar Rush” focused on conflicts over land tenure. This report focuses on the land acquisition of the agricultural sector, particularly sugar producers. Oxfam alleges that sugar producers sometimes displace traditional owners from their land with no or inadequate compensation, thus negatively affecting an array of human rights.

Oxfam calls on consumer-facing companies that use sugar — such as Coca-Cola, PepsiCo, and Associated British Foods — to require their suppliers to acquire land by obtaining the free, prior, informed consent of the land’s traditional users.  Oxfam indicates that such consumer-facing companies should identify the sources of their sugar, including the location in which it was grown.  Oxfam also argues that companies should adopt policies of no tolerance for land grabs, and should urge governments to prevent land grabs.

Taken together, these two reports reflect the fact that questions as to the propriety of land acquisition are more important than ever. If trends hold steady, the percentage of arable land compared to the world’s population will continue to decline, increasing land tenure risk. Investors, in addition to civil society, will place increasing pressure on companies to demonstrate that they or their suppliers acquired their land through the free, prior, informed consent of the traditional users of the land.

In this context, companies and investors should consider the following:

  • Land tenure risk is significant in emerging economies;
  • Conflicts over land can delay projects for years and may result in project cancellation; and
  • Companies need to better account for and effectively manage the risk of such conflicts.

In particular, companies should not simply rely on government assurances that they have clean title.  Even if such title stands up in court (and it may not), companies potentially face years of tension or open conflict with neighboring communities. They also could be considered to be complicit in human rights abuses related to population displacement. Ultimately, companies should seek to engage directly with potentially affected traditional land users to negotiate for access to land, and should consider adopting a policy on free, prior, and informed consent.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley Hoag LLP - Corporate Social Responsibility | Attorney Advertising

Written by:

Foley Hoag LLP - Corporate Social Responsibility
Contact
more
less

Foley Hoag LLP - Corporate Social Responsibility on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.