Since the 1990s, a new wave of large-scale land acquisitions for agricultural investments has emerged world-wide and in the Mekong region, in particular. Land grants for agro-industrial concessions are not new and can be traced back to the colonial era. However, the convergence of the food, financial and energy crises in the mid-2000s has intensified interest in large-scale forms of agriculture to unprecedented levels. In the Mekong region, significant areas of land have been granted to companies for agro-industrial investments, i.e. in Cambodia (2.1 M ha), Myanmar (2 M ha), Laos (0.4 M ha) and Vietnam (0.25 M ha). This has been expected to generate Foreign Direct Investment in the agricultural sector, boost productivity and spur modernisation, and increase government revenues in countries that were thought to be “land-abundant.”
In reality, the trend proved problematic, principally due to impacts on smallholder farming systems, limited return to local economies, and overlaps of land claims leading to conflicts and evictions. Government, investors and international and national organizations have been increasingly involved in designing and implementing mechanisms to limit large scale land acquisitions and better regulate agro-industrial investments. In the case of Cambodia and Lao PDR, governments established moratoria on large concessions.
More than two decades down the road, it is critical to learn from these developments, especially given that national governments have become increasingly aware of the limitations of the agro-industrial model and the problems associated with its implementation. It is timely to:
- review the positive and negative impacts on rural smallholder farmers, as well as the concessionaires,
- examine the effectiveness of regulatory frameworks put in place by governments,
- learn from the experiences of engagement between the private sector and rural communities, and
- explore alternative forms of agricultural development that are likely to be more inclusive of smallholder farmers.
A regional workshop on the theme ‘Responsible Large Scale Agricultural Investment in the Mekong’ will be held on 15-17 November 2017 to examine these questions with a diversity of stakeholders from government representatives, protagonists of the private sector, research institutes and civil society groups.
In the lead up to the regional workshop, this online dialogue offers a space for policy makers, development partners, private sector representatives, researchers, civil society workers and community advocates to exchange ideas and experiences on these issues.
Through this dialogue we aim to collaboratively explore challenges and opportunities related to the responsible large scale agricultural investments in the Mekong region in order to identify issues of common interest, contrast country and regional contexts and strategies, and generate a regional-level synthesis of key challenges and opportunities to contribute to solutions.
We invite participation from local, national, regional and global levels to widen our learning.
The online dialogue will be documented in a summary report, synthesising key discussion points, supported with a recap of participant contributions.
Lessons from the online-dialogue will be brought into and further discussed during the regional workshop, where policy recommendations will be formulated.
Large-scale land acquisitions: impacts and results
1. What are the most important trends in policy and practices around agro-industrial concessions and related land use in the region in the recent years? What were the expectations of the investors and governments promoting these forms of agricultural development? Have these expectations been reached?
2. What have been the impacts of the policies granting large scale land concessions, both positive and negative? Various initiatives were developed to evaluate these impacts and the performance of the investments, by government themselves or by research institutes. What are these and what have we learned from them?
Improving regulation of large-scale land acquisitions
3. The granting of large scale land concessions has been based on the premise that in the Mekong Region, there are still vast areas of fertile land “empty” and available for investments. However, most research cases point to the fact that most of the land allocated for agro-industrial concessions was already used by local communities. Because of fundamental issues that emerged during the land identification and allocation stage (lack of transparent communication, lack of consultation with local communities, etc.), this has often led to disputes over land access and to environmental and social impacts that have affected communities and also jeopardized investments. With this in mind, is it worth pursuing large scale agricultural concession models? Where and under what conditions?
4.What could be done to more effectively engage the private sector toward more responsible agricultural large-scale investments?
- From a private sector perspective, what are the advantages of developing Responsible Agricultural Investment and other corporate social responsibility practices and guidelines?
- From a civil society perspective, how could rural communities be better equipped to negotiate with investors and government prior to and after the signing of a large-scale agricultural investment contract? What are the challenges with implementing Free Prior and Informed Consent (FPIC)?
Alternatives to large-scale agricultural investments
5. The multi-faceted problems resulting from large scale agricultural investments have led to policy reviews and/or the establishment of moratoria on certain kinds of large-scale land acquisitions, with new forms of investment being incentivized, e.g. land lease, contract farming etc. Are these new forms more viable alternatives for ensuring inclusive sustainable development? What lessons from previous experiences should be applied to these new forms of investment, especially to protect small-holders? What implications might this have for future?
6.What venues/platform are most appropriate to discuss the regulatory environment with governments and private sector and why are they effective? What are their limitations? What other opportunities are there to promote this conversation further?
How to join the dialogue
The dialogue is open to anyone with an interest in land issues. To make a contribution to the discussion, first register here.
Please feel free to answer as many questions as you like and then upload your contributions to the dialogue. You are welcome to make more than one contribution. Your contributions should be brief –not more than 500 words, and may be shorter. You may also query other participants and comment on their contributions.
If you have any questions on content or if you want to discuss your contribution before the dialogue start, please feel free to contact the dialogue moderator Jean-Christophe Diepart, Mekong Region Land Governance at firstname.lastname@example.org.
If you have question technical question on user interface etc. please contact Terry Parnell, MLIKE coordinator at email@example.com or Neil Sorensen, Land Portal, at firstname.lastname@example.org
Dear colleagues and friends,
Welcome to this online dialogue on Responsible Large Scale Agricultural Investment in the Mekong Region!
My name is Jean-Christophe Diepart. I work with the Mekong Region Land Governance project and will be the facilitator of this online discussion with Terry Parnell.
Over the next two weeks, we aim to learn from two decades of large scale land-based agricultural investments in the Mekong region, examine the effectiveness of regulatory frameworks put in place by governments, learn from the experiences of engagement between the private sector and rural communities and explore alternative forms of agricultural development that are likely to be more inclusive of smallholder farmers.
The dialogue is structured around 6 main questions or themes that are outlined in the introduction. A number of discussants have been invited to make pre-prepared contributions. To ensure sufficient time to address the different aspects of this wide topic, I propose to discuss each question for approximately 2 days, in a sequence from Q1 to Q6.
While this is the intended structure for rolling out the pre-prepared comments, everyone is also encouraged to spontaneously post and respond to any of the questions/posts at any time. In fact, we are aiming as much as possible for this online discussion to be a 'conversation' rather than a series of stand-alone comments.
When you post your contribution, please mention the number of the question you are responding to in the title of your post.
If you have any questions, please feel free to contact me at jc.diepart[at]gmail.com
I wish us an exciting discussion on this important topic.
All the best,
Elegant control :Large-scale agriculture investment
Q1,2,3 In 2012, during the new democratize government period, the government adopted the new farmland law and vacant fellow and virgin land management law. But all of these laws are given favor to the investors, especially elite groups to invest in the large-scale agriculture sector. Moreover, the national land use policy which was adopted in 2016, mentioned that to establish the contract farming system in the country with a purpose of the agriculture sector to be developed. It becomes challenges than opportunities for the country before it's not yet ready to access those kinds of investments. Therefore, investors grabbed the local people land both legal and illegal ways for their large-scale agriculture investment. Although those grabbed land have been using for the generation to generation by the local people and indigenous people. As consequence, not only the local residents but also the government faced with land conflict and land grabbed cases, environmental degradation problem, social and economic threats, and the elegant control of the corporations. The stakeholders involved in the large-scale agriculture investment are still neglecting to practice the FPIC process and lack of accountability on their activities when human rights and environmental rights abuses. The government must have mechanisms which reflect with local context and in line with international standards to protect their people from the negative impacts of large-scale agriculture investments. In addition, the mechanisms must be a genuine protection and prior the benefit of the local and indigenous people than investors.
Q1 Agro-industrial concessions at a turning point in the Mekong
The granting of large-scale land concessions to develop agro business large sale farms and agro-industries have started in the 90 s in Myanmar (through the 1991 Vacant Fallow and Virgin instruction) and in the early years of 2001 -2003 in Cambodia and Laos, in Vietnam it has been much later in 2013, and has remained relatively limited, because most of the agricultural land and part of forest lands have been distributed to family farmers, which remain the majority of the population.
The boom of concession granting in Cambodia, Laos and Myanmar has taken place between 2005 and 2011, with more than 70 % of concessions areas being granted during these years. As a result, massive areas of land has been granted to companies and private investors. In Cambodia, 2.1 M ha were allocated to 277 companies, to be compared to 3.1 M ha of land owned by 1.9 M famers. In Laos, 450,000 ha to compare to 1.1 M ha of agricultural land occupied by smallholder farmers, and in Myanmar, 2.1 M ha, compared to 13.1 M ha occupied by smallholders.
This fast allocation (which happened through various channels, both at the provincial and national levels, and also through various ministries), resulted in many problems and conflicts with local communities, as the areas granted, which were in principles “degraded forests” or” fallows” state lands, without permanent occupants, were in fact very often covering a significant proportion of village lands and forests occupied and managed by local communities under customary tenure since many years, and which were vital for the subsistence and livelihood of these communities.
At the same time, the quick returns expected from these operations, in terms of economic development, taxes, and local employments, failed to materialize or came slower than expected. In particular, the level of land development has lagged behind, and deforestation has increased. Recent analyses show that in Cambodia, 20% of the land granted as Economic Land Concession has been exploited whereas only 15% of VFV land granted for agro-industrial in Myanmar has been actually planted.
As a result, governments have put a halt to the concession granting policy in 2012, through a moratorium on new concessions in Cambodia and Laos. Subsequently they organised the regularization of existing land holdings within concessions in Cambodia (through Order 01), the monitoring and cancelling of underdeveloped concessions, also in Cambodia, in the following years (152.000 ha cancelled in 2015), and the development of a systematic monitoring of existing concessions in Laos, whose results are not yet public. In Myanmar, although there was not a formal moratorium, the concessions granting has also slowed down considerably since 2012, with the transition government, and the establishment of a Parliamentary Land Confiscation Commission to investigate cases of illegal land grabbing, which reallocated at least 115 000 ha of lands to original owners.
As a result, governments have started to give more attention to other forms of investments which can help modernize agriculture without granting land to investors. Contract farming, with different possible arrangements, land lease by farmers, out growers model (associating contract farmers to a nucleus plantation and agro-industry) have been encouraged in particular by the Lao, Cambodian and Myanmar governments.
I don't agree that land is empty. From what I saw a few years ago in Attapeu where HAGL from Vietnam gained huge consessions for rubber, what it meant to the local villagers was loss of land for grazing animals, loss of areas to collect FTFPs and a much greater reliance on freshwater fish and other aquatic animals to survive. And I am not sure that it wasn't all a ruse to clear the timber and who cares if the rubber works?
Part of Q4
Local villagers often have little to no choice in what happens to their traditional lands. Yes some NGOs will try to use FPIC, but big 'investors' from other countries are not at all concerned and the GoL can do very little about it, especially at the central level because decisions are made provincially in many cases (whether within the law or not)
Q1, 3,4,5 - Companies are behaving shamelessly
In fact, almost everyone seems to recognise that land given out under concession in developing country contexts are not vacant but being utilised by subsistence farmers, shifting cultivatiors and forest dependent peoples. Only companies with their heads stuck in the sand could possibly claim not to realise that villagers were utlising land.
Last week I was at an international conference on recognising customary land tenure, and it came up that land concessions where an untenable method of engaging in agribusiness. Indeed I even heard one speaker quote private sector groups as saying that the era of large scale concessions is over! Yet many agri-business companies were at the same meeting talking about FPIC and CSR with very large concession holdings (albeit in addition to outgrower schemes). Personally I can't see how a company can have a land concessions granted by a government and consider in any way that communities are deriving alternative livelihood benefit. Agri-business companies need to commit to devesting from concession model based agri-business investments, and move to countries where local communities are recognised as land owners, and incorporated in corporate agri-business structures as either landlords, or as outgrowers. Only then will presure come to bear on private sector representatives that they must consider land governance in the countries they invest, and only then will the governments in developing coutries begin to think about recognising customary tenure systems.
Q2 In Laos, Land inves. have more negative than positive effects
In Laos, important impacts of key policies related to large-scale land concessions are, on the one hand, the observed boom of investments in land across a wide range of sectors granted by a range of Lao government institutions at all administrative levels and, on the other hand, the subsequent realization also within the Lao Government (GoL) that things got out-of-hand, and that nobody had a good grasp on what was actually happening where in terms of commercial investments in lands. One key respective reaction of the GoL was the 2012 moratorium on mining and certain tree plantation concessions, and the order to key ministries to work more closely together on respective information management to be better able to identify “good” and “bad” investments.
Through the Swiss-funded DECIDE info initiative, relevant GoL institutions are being supported in integrating land concession related information from across sectors and administrative levels, and in taking a somewhat differentiated look at various aspects of quality of various types of commercial investments in lands, which allows assessment of trade-offs among e.g. economic, social, environmental and legal aspects of commercial land investments in Laos, taking into account perspectives of a range of key stakeholders.
Initial insights from the piloting of the inventory and the quality of investment assessments suggest that there are several positive impacts at the national level, including increased revenue generation from commodities produced and traded from such land concession projects and impacts on aggregate GDP growth. Many of the benefits of such commercial investments at the national level have tended not to reach the local level. Anticipated benefits of land concessions to local communities and areas—such as new employment opportunities, improved markets and transport infrastructure—have generally been quite limited, though this varies somewhat by sector and investor type. The majority of such land investments tend to have more negative (than positive) effects on rural livelihoods. For instance, many local farmers and communities have lost their farmland and communal resources to investment projects without adequate compensation. At the same time, the employment opportunities are not what local communities expected, and are often filled by migrant workers rather than the local population. Further, access to markets and transport infrastructure was in most cases not improved, as most investment projects concentrate on areas along main existing transport routes and well accessible areas.
Commercial investments in land also tend to have a significant impact on the natural environment in numerous ways including the conversion of natural forest to crop plantations, mono-cropping on steep slope increasing the risk for run-off and erosion, and an increasing use of agrochemicals in plantations, endangering the biodiversity as well as the health of local populations.
Still, there are significant differences across the country and types of investments. For instance, in rubber plantations the mostly mountainous north, investors rely much more on human labor for clearing land, soil preparation, planting, etc. compared to rubber plantations in the south, where tractors are more commonly used for land clearing and soil preparation, offering fewer jobs to the local population.
How much contribution to GDP growth and Government Revenue
Dear CDE colleagues,
I am curious to know what is you estimate of GDP increase due to large scale land agricultural developments ? And have you compared it to the losses in local livelihood ? It is easy to calculate export value, but in terms of GDP the rural revenues, which are generated in the local economy or at household level, are more difficult to measure and are frequently understimated.
Another question concerns the effect of the size of concessions or leases : from previous CDE work, it was found that smaller investments had better results and less negative impacts on the local communities. Can you confirm that ?
It would be also intersting is to find out how much taxes were actually generated by these investments, contributing to government budget.
Re: How much contribution to GDP growth and Government Revenue
An excellent question Christian and for my mind hits at the heart of the issue as to why land concessions are even promoted in the first place. One of the three factors that determine a countries' LDC status is in fact GDP. Hence LDC countries are pushed into positions through a global discourse on poverty to chase GDP growth. I have no data, but presume that subsistence farmers do not contribute much to national GDP calculations, while kicking villagers off their land, and establishing large monoculture plantations has positive impacts on national GDP calculations. As such we could say that large-scale land concessions are the result of an international poverty discourse focused around economic growth and GDP. Until the international community re-considers the definition of "poverty" and global poverty indicators such as a countries GDP, then developing countries will continue to engage is high GDP growth large scale extractive and industrial agri-business projects.
GDP, taxes, etc
Given the lack of declaration and recording of production volumes in many concessions in Laos, it is of course difficult to quantify the GDP contribution of agricultural concessions.
From the recent inventory of land concessions, it is clear that only a relatively small share of land concession projects (and their production) is actually being taxed, although we do not have any actual figures on total revenues from concessions. Land for agricultural investment projects is taxed only once the production starts. Many of those projects are currently still in a non-productive phase. Additionally, the land taxes will be collected only if the concession agreement has been signed with MoNRE, which many projects do not have yet.
The currently on-going analysis of aspects of quality of investments in land will tell more about the various positive and negative impacts of different types of concessions. Initial insights show, however, that size is only one potential factor, and that e.g. the type of land granted to an investment project (e.g. previously used for agricultural production by local people or fallow land), the ways the land was acquired (e.g. involving consultation and consent with villagers), etc. play an important role in the eventual impact of a concession.
CDE Laos team
Q2 In Laos, many on-going initiatives to evaluate concessions
Large and medium investments flowing into Laos mainly from the neighboring countries and the region - China, Vietnam and Thailand reflect huge needs of land and natural resources for agricultural products and energy. With cheap land and labor with little knowledge on quality investment and weak law enforcement attract rapidly regional and domestic investors to take advantage of this investment momentum.
However, the high GDP growth has become increasingly capital intensive, but limiting jobs creation for lao workers, income inequality as well as negative impact to environment and people land tenure security and access to natural products. Divergence between the intended outcomes of the policy and the reality at local levels could be found everywhere. Around 75- 80% of the country’s population is rural- around 5 million people. These communities rely on forests not only for their food but also fuel, building materials and medicines. The growing competing interests over land and natural resources between large-scale investment projects and local communities are increasing.
Commercial plantations, especially rubber and lately banana invested mainly by Chinese and Vietnamese companies, about ten years ago have been increasing ever since. While land use plans are not in place at grassroot level (village), absence of comprehensive laws/guidelines/instructions and weak enforcement, a large area of land (at least approximately 1,1 million (M) hectares of land have been conceded with considering that rice cultivation area in Laos is 0,98 M ha. Negative impacts from concessions and land leases increasingly affect on people’s land use, land right, environment and people’s health and benefits.
Roles and responsibilities of authorities at different level for land concessions and land leases are not followed according to the land law. Concessions and land leases are seen commonly be granted by different level without/insufficient consultation with each other. Sometimes concession companies cleared village agricultural land without consultation with communities.
Various initiatives were developed to evaluate these impacts and the performance of the investments?
Negative impacts from plantations and mining had become serious enough for the government to issue the moratorium in June 2012 for mining or land concession s for rubber and eucalyptus plantations. The moratorium was extended again in 2016 to be valid up to 2020.
In 2016, the government improved investment law for a better management of investment (17 November 2016 No 14 /NA). In the Article 74: it is about environment obligation according to international treaties and agreements to which Lao PDR is a party and in Article 104, it is about content of monitoring – inspection.
PEI-UNDP, LMDP/ELTeS-GIZ, RAI working group, MRLG and other development partners currently work actively in promoting responsible investment through investment monitoring and dialogues.
Tools were designed, tested and used in some provinces. IPD with the support of MRLG currently drafts guidelines for plantations and plans to test in some northern provinces before introducing nationwide. MAF is currently promote GAP in plantation. However, the initiatives are still new, it needs time to train and coach local government official to implement, follow up and get result to discuss on regular basis.
Khankeo Oupravanh, GIZ Land Program Laos
Q 2. Inclusive assessment of land concessions in Myanmar?
I just want to share a bit about the situation in Myanmar, where the government is now willing to revoke some poorly allocated or managed land concessions, and is mandating various studies and assessment to support this process.
Some of the land concessions the government is looking at now are the large oil palm plantations granted during the military era in Tanintharyi region, in the southern part of the country. These concessions have generated a lot of social conflicts on the ground. Resolving these issues have become a priority of the regional government.
With the technical support of the OneMap Myanmar project, a multistakeholder committee was established to perform a land use assessment of the plantations and identify which parts of the allocated land could be claimed back by the government.
This committee brings together the key stakeholders, including the regional government agencies, civil society groups, oil palm companies’ representatives, and officials of the Karen National Union. All these groups are working together to produce a precise assessment of the current land use in and around the plantations, and to check the compliance with the terms of the contracts or permits, using drones, satellite images, and ground verification. The availability of quality data has proven very useful in order to unpack the complexity of the situations on the ground.
Data, maps and information are a very important component of all the different types of assessments that we are talking about in this dialogue. But an important lesson learned of our current work in Myanmar is the importance of inclusiveness at all stages of the assessment process. Producing data, especially maps, on such a highly contested topic, can easily increase the tensions rather than help resolving the issues, if principles of transparency and consultation are not adopted.
In the early stage of the regional assessment, the first land use data produced were highly contested by many of the key stakeholders involved. As a result, it was collectively decided to jointly design and implement the data collection protocol. And only then, constructive discussions could take place, and compromises be found, resulting on an assessment that is agreed upon by all. Additionally, this technical process has helped generate a climate where different parties can discuss, exchange point of views, confront perspectives, and learn from each other, without staying systematically confined in a sterile opposition.
This experience shows that there are opportunities for the resolution of land issues generated by the poorly managed concession allocation process that has prevailed in the past. In the case of Tanintharyi, the government has demonstrated very clearly the will to take the driver seat while engaging actively in the multistakeholder process. But as the pressure over land resources will keep increasing with economic growth, this space may not remain open for ever. This might be a unique opportunity for the government and other stakeholders to work together towards the development of a process to handle these complex situations with care, fairness and transparency, in a way that benefits the local communities affected by the concessions.
Assessments are very important. But in highly conflictive environments, assessments seem to be much more effective in enabling multistakeholder dialogues when they rely on the inclusive co-production of data and knowledge.
What is the purposes and objectives of inclusive assessment?
What is the purposes and objectives of inclusive assessment of land concession in Myanmar?
If I understand you well, one is to claim land back by the government. We have the experience here in Cambodia where the government revoked the undeveloped land concessions as mentioned in Christian’s post to Question 1. In the past, the pressure over land and national resources kept increasing, from investors and from migrants. In this case, the government has no intention to resolve the land conflicts on the ground but rather giving back the same revoked land concession to new investors.
There is no question at all if the joint assessment of land concession has the concrete objectives and its purposes for solving the social conflicts. If not, there is the debate here how revoked land concession will be used in the future? Is it for new investors or it is for resolving social conflict on the ground?
It’s just my opinion and lesson learned here. It should be prevented and not allow this happens in other countries in the same way.
Re: What is the purposes and objectives of inclusive assessment?
Thanks for raising this very good question and sharing your experience in Cambodia.
From the government perspective, this assessment of the oil palm concessions is indeed done in order to claim back some of the unused land to redistribute to landless or land poor smallholders and internally displaced populations. Not to be allocated to other companies.
There is a great concern, however, from the civil society side, that it turns out just the way you describe it. Therefore, it is imporant that the multistakeholder engagement does not stop at the end of the assessment, but also includes the definition of process and criteria for the land reallocation program that will follow. Whether it will happen like this or not, I cannot say yet. It is too early. But all signs and statements made by regional government give good hopes that this is the direction it is taking.
Inclusive assessment ... how inclusive?
(Sorry to return to last weeks topic - catching up!)
It's interesting to read the map had such a profound affect and this then initiated the 'inclusive' assessment. I'm very interested for more information to be shared on this methodology, and in particular how various social issues, in particular how the needs of women and the poor were articulated and addressed for reallocation. This particular topic of large scale land investments and re-allocation is very often silent in addressing vulnerable groups within the various social structures.
I look forward to a reply since reallocation is being pursued actively in Cambodia, Myanmar and Viet Nam.
Suffering of small and vulnerable landonwers during acquisition
The large scale investment on land definitely impacting on the GDP and per capita income. The losses of the vulnerable communities are really strong with such kind government concessions. Government is taking lead to control private lands both for public and private investments. Most important issue of deprivation that women and vulnerable communities do not have any kind of land ownership documentation. While government is ready to provide the compensation for the land allocation, very few landowners particularly vulnerable people are able to collect the money as do not have any documentation. In Bangladesh, we need to provide deed, inheritance certificate, tax receipt and registration document to Land Acquisition (LA) section under the Deputy Commissioner Officer in each district. Sometimes, the LA section asked for mutation and many other documents in order to verify the ownership. Its create other kind of hassle, as most of the land owners do not have any documents so they have to move one office to another office for collecting documents.
Then land owners need to move frequently losing jobs and regular activities. Such hassle is huge. My question how much job, we can create by investing on huge area of land? How we can reduce the hassle of land owners during giving them compensation?
Q3 Desirable models are those which include smallholder farmers
There is a wide-range of models for large-scale investments in agriculture, including multiple combinations of small, medium and large-scale farming and including models that equitably include local producers as suppliers, shareholders and business partners available for consideration. Most desirable models are also those which accelerate the incorporation of smallholders into primary and processing production, rather than competing with large-scale investors and leaving them in the same poverty. With regard to geographical location, land concessions have yielded better results in cases where the governments promote more inclusive models, for example by providing necessary public investment for soft and hard infrastructure required, securing local land rights, addressing upfront power and capacity imbalances in relations between investors and local communities and properly valuing land so as to discourage excessive land acquisition.
Smallholder farmers and those holding customary tenure (in turn smallholders too) are the principal source of investment in Mekong region’s agriculture. This fact compels governments while facilitating/granting large-scale land concessions, to extend their efforts to support these particular groups, including through enabling policies, infrastructure development, access to services and information, extension services and support to farmer organizations. Governments should prioritize such support to smallholder farmers, those holding customary tenure, forest dwellers and local communities even in the context of large-scale investments which may involve combinations of different production systems, crops and target markets. In several countries in the region (e.g., Thailand and to an extent Indonesia) have shown that inclusion of small holders in large-scale concessions as a stakeholder results in better and sustainable outcomes. In addition, shorter to medium length leases are generally more advisable than acquisition in perpetuity, and stronger contracting laws that ensure that the terms of incorporation of farmers can be regulated to be fair and non-exploitative, and that the setting up of these partnerships be supported by agricultural extension staff and local NGOs.
Such a model should invariably include provisions for preventing and resolving land disputes. Past experiences have shown that when land concessions are linked to programs to conserve biological diversity, decentralization and building capacities of local governments, and participatory land use planning results were positive. In turn, there is a need to form partnerships with community-based institutions to encourage adaptive understanding of power imbalances in development planning and how understanding of local rights discourses vis-à-vis land concessions with regard to mining issues continue to evolve. In a broader sense, governance approaches and property rights regimes must be revised to be more sensitive to communities who depend on informal small-scale mining as a poverty alleviation strategy
Q3 Improving regulation - the falacy of vacant or "wasteland"
Countries in the Mekong Region continue to make the false assumption that there are vast areas of unused land available for the development of large scale agriculture concessions, but the experience in those same countries over the last decade shows it is not the case. Such land is labelled by the state in various ways; wasteland, vacant land, fallow land, degraded land to name just a few. But these arbitrary labels fail to take into account that in many cases this land is utilised and managed by communities who depend on them for their livelihoods. As least developed countries, Laos, Cambodia and Myanmar have populations that are very much dependent on the land scapes and natural resources around their village. Large scale land concessions have been promoted by these same countries to the detriment of subsistence villagers. Areas that were flush with various kinds of forest foods are cleared to make way for monoculture agriculture plantations often without any regard for the most vulnerable subsistence farmers that are dependent on these resources. The designation of “empty land” conveniently allows the governments of the region to take the traditional lands of many communities with little regard for the impacts such land acquisitions have on local people ability to stay food secure. Many of these lands are taken with promises of jobs for these same people however research has shown that in many cases villagers have a profound sense of injustice at the loss of their traditional lands that their community has managed for decades or centuries and that due to a variety of reasons, the promised jobs often fail to materialise, or go only to a select few. Governments of the region need recognise the traditional land boundaries of village communities and give those communities security of tenure, including the ability to lease land to commercial agribusiness companies. Such community land leases could be taxed by the government creating a win-win situation for all, empowering communities, providing secure investment scenarios for companies and income for communities and the government. The current practise of ignoring the traditional livelihoods of local communities when conceding land to commercial agribusiness ventures represents an ongoing failure of the state to support the interests of its most vulnerable citizens and will only continue to in-trench poverty and malnutrition in these countries.
Should be CSR, direct restitution and benefit sharing
I do agree with you on the recognition of customary land rights of the indigenous, ethnic communities.
I do not believe in the effect of stricter, heavier state taxation on investors in developing countries, where there largely exist corruption and taxes abuse & misuse. In such an untransparent budget management, there is no clear assurance for the tax revenue to go properly to social security fund, including restitution and rehabilitation for the land losers.
Therefore, I would suggest to foster the investors’ corporate social responsibility, in which direct fair compensation and benefit sharing between the investors and affected communities should be clearly taken into account.
Q3 Is it worth pursuing large-scale agric. concession models?
As a few other contributors have already noted, by now – roughly a decade after the problems of land concessions in Southeast Asia and of the global land rush more generally have been thoroughly identified and unpacked – it is clear that land concessions-in-practice and responsible agricultural investment are basically incompatible with one another. While concessions, in theory, are not a bad business model since they allocate risk to those best bear it (states and wealthy private investors), their assumption of widely available, clearly identifiable, uncontested swaths of state land has proven to be untenable. At this point, then, it is therefore essential to distinguish between large-scale agricultural investment and large-scale land concessions. The former is badly needed. The latter is not.
How might the former actually work in ways that serve rural communities? Lessons to date, from across the spectrum from success to failure, highlight that (1) private-sector actors, from investors to communities themselves, are increasingly going it alone in the face of inadequate state support; but also that (2) state support of the right kind is essential to make things work well.
Two examples: In the well-known success story of Ban Hat Nyao (northern Laos), the community organized itself, sought out markets and technical expertise to grow rubber, and conducted its own internal land use planning. But it depended on two essential pieces of state support, namely: a soft loan from a provincial bank to establish its plantation, and recognition of its land-use planning process by the District Agriculture and Forestry Office, which effectively prevented its lands from being allocated to outsiders. Second, and also in northern Laos, the boom in banana plantation deals over the last half-decade has been marked by a departure from the land concession model, as well as from the model of state-organized contract farming that characterized the rubber boom, and has instead relied heavily on direct deals between companies and landholders. These deals have been criticized on numerous grounds, from chemicals pollution, to coerced participation for some families, to exacerbating intra-village inequality – but they exemplify the dynamics of direct private-to-private investment.
If the banana boom showed some of the problems of a lack of state regulation, Ban Hat Nyao showed the potential when state support is mobilized in favor of community self-control over land use. But how to achieve this, and how to scale it up? Northern Laos’s rubber boom was notable for its failure to scale up the Hat Nyao model of state-subsidized, community-organized, independent smallholding, and the default situation – from concessions to private land-lease deals – has been ad-hoc approaches that pit community members against one another, and that even seem to be undermining good-faith efforts by some companies to negotiate with communities (see, e.g., Ling, p. 31 & 38).
Recognized community land tenure that cut across bureaucratic turf boundaries to cover village territories as a whole, would go a long way toward creating the conditions of possibility for outside investors to negotiate responsibly with communities. Communal recognition is not the same as communal ownership; land could be used and allocated internally along a mix of private and communal lines, and could even still be technically owned by the state. But responsible agricultural investment requires good-faith negotiations with the communities involved, and this is all but impossible if community representatives are worried about losing land, if not from the company in question, than from another deal that could come along next week. The proliferation of direct land-lease deals shows that there is legitimate demand for corporate land access, but actual tenure would not only incentivize long-term investment at scale to develop those lands for real, sustainable commodity chains. It would also create conditions of possibility for this level of investment to actually occur, and in doing so alleviate the reliance on speculative and extractive forms of development that characterize the status quo.
Nowadays, in Shan State, most of the lands are used by housing projects rather than agro-industrial business. Yes, some places might use for agro-bustiness. China's one belt one road initiative plan are also grabbed many lands from the local people and destroy the local environment. Most of the major agricultural business in Shan State are related with Burmese military government such as rubber plantation, sun flower seeds plantation and so on. However, in Ta Ang (Palaung) lands, most of the tea lands have not land certificate and titling from the government. There is no official policy for land concessions for the tea peasant. It also means that Burmese military government can exclude the people from their lands when they set up major investment in tea lands. Last five years ago, for instance, a Chinese company, some local cronies and retired person from Burmese military started a big tea factory in Ta Ang land and they grabbed lands from the local tea peasant.
Brief overview of the first week discussion
Hello everyone and welcome to the second week of the dialogue
First of all, let me thank all of you for your engagement so far in the dialogue. The discussion has been rich and has covered a number of grounds. At this stage, it might be useful to provide a brief overview of the points discussed so far. I see four lines of debate
This week, 3 other dimensions will be added to the debate, namely the engagement of private sector with communities, other forms of agricultural development and the existing platforms that are appropriate to discuss the regulatory environment with governments, private sector, civil society groups and communities.
But please feel free to engage in real time dialogue (and debate) with others discussants and jump in whenever you would like, even if you want to reflect on a point that was discussed last week.
I am looking forward to the rest of the discussion.
Q4 Toward more responsible agricultural large-scale investments?
Where the objectives of the private sector and civil society partner converge is where the ‘engagement’ or collaboration should begin. Civil society organisations (CSOs) should not approach companies with a pre-designed project and expect them to be ready and willing partners, but rather projects should be designed and implemented jointly, based on the expertise, priorities and needs of each partner.
From a CSO perspective, empowering rural communities to negotiate with investors / government begins with building knowledge of land rights. From here, communities need to know about the risks, benefits and long-term impacts of the proposed project in order to assess whether they want to consent or not – this information should be delivered through a meaningful FPIC process. By meaningful, we mean that the process starts well before the investment begins, is ongoing, two-way, creates space for community members to ask questions (and receive honest answers) and involves all stakeholder groups within a community – not just the authorities.
One way that Stora Enso Laos (SEL), Village Focus International (VFI) and RECOFTC Laos have collaborated towards improved FPIC processes is by developing community consultation tools, and accompanying training for SEL employees. In the Lao context, these tools have proven particularly effective in deepening women’s understanding during the early stages of investment, as women in ethnic groups often do not speak or read Lao language, so audio-visual tools – such as videos dubbed into Tri’eng and Mangkong languages – are one way to help increase women’s participation in investment decision-making.
Q4 What to do to engage private sector towards RAI?
It is noticed that not all agricultural large-scale investments are beneficial. There are some risks for all stakeholders involved in agricultural large-scale investments. Large-scale land acquisition by national and international investors conducted without due diligence and meaningful consultations with all concerned stakeholders and without used Free Prior Inform Consent (FPIC) could cause and affect rural communities, especially indigenous peoples’ community, including loss of lands and livelihoods. To generate benefits for all stakeholders involved and to promote investment, the private sector is responsible to address the needs of engagement from communities in the consultation process.
For more effective engagement of private sector toward responsible agricultural large-scale investment, few areas need to be addressed:
a. Awareness raising to investors:
Through the experience, only small number of investors, national and international, which engage in the national and regional events on responsible investment, social responsibility, human rights and rights of the people on land, especially the customary tenure rights of indigenous people. Therefore, it is very crucial to organize multi-stakeholder events at national and regional levels which require investors to participate in these events in the aim to:
b. Sharing success stories
The establishment of “Investor Champion Groups” in the country and in the region, is very beneficial. Those investors who are in Champion Groups could share their success stories, lesson learnt and good practices at national and regional events in the aim to influence other investors.
sharing successes as well as documenting failures
Sophorn - I especially like your point about sharing success stories, because so often we (meaning 'we' CSOs) tend to view the private sector as greedy, all-powerful, and without a care for communities. But this is not the case for all investors. Of course, there are agribusinesses whose business practices are in no way 'responsible', and who bring many negative impacts for local people and the environment, and it is important to document this. But many investors are growing more and more aware of the risks associated with large-scale land concessions (as mentioned by some contributors in the dialogue above), and so are seeking alternative models of investment (i.e. - contract farming, outgrower schemes). Creating space at national, regional and global levels for investors - and governments - to share their experiences about these alternative models (especially success stories) could be a key step towards promoting more responsible investment.
Q4 What civil society can do?
First, rural communities should find out who is developing large-scale agricultural investment projects in their areas. Through the experience, it is really difficult for the communities to find out this information because it is usually involved with mixed interests of private investors and the government. In some cases, the investors are from abroad which makes it even more difficult to contact. The communities will only know about the projects when the investors move in and start developing the areas. The better option is the communities can get assistance from other organizations, including local, international NGOs and the media because they may have information on planned projects.
Second, after knowing that there is a development project, the communities should request information from the investors or government such as detailed information of the projects, its potential impacts and what the project investors will do to prevent or reduce them. It is also important for community to request for copies of environmental and social impact assessments (EIA) in their native language because it can help to ensure all members of the community are informed and understand the potential impacts.
By experience, Investors and Government don’t work or dialogue with all members of the community, therefore, the community with the support from CSO can elect representatives for the engagement with investors and government. It is also a better way to help preventing the negotiating process being “captured” by a few community members who may be more interested in personal benefit rather than community benefit.
Third, the capacity building is very important and needed for the community representatives. When investors approach communities, it is often the government officials from district or provincial level who come to speak on behalf of investors. Therefore, it is important to train community representatives on how to engage with investors, negotiation skills, and roles and responsibility as the community representatives. Furthermore, community representatives need to know more on their legal rights and rights on the land, land law and international conventions as well as the rights to FPIC.
Q4 What are the challenges with implementing FPIC?
The lessons learnt shows that without support from CSOs, it is challenging for IP communities to claim the rights to FPIC due to lack of understanding national and international laws and their rights to land.
Moreover, it’s challenging for communities to demand their rights to FPIC and their participation in negotiation process with investors and with government. Also, the rights to FPIC are not often recognized and FPIC is still something the companies and government agencies do not fully understand and implement. The investors always insist that they get the concession rights from the government for development and affected communities have to dialogue with their own government and not companies.
Furthermore, there may be national laws in a country which change the way that FPIC can be claimed through the participation of affected community in EIA process. For instance, in Cambodia, the process of Environment Impact Assessment (EIA) is based on the sub-decree on Environment Impact Assessment Process adopted in 1999 and the Prakas on General Guideline for Preparing Initial Environmental Impact Assessment and Full Environmental Impact Assessment Report (2009). The process of EIA on a development project, affected communities and public participation should be made in three main stages: Project scoping stage; EIA report review stage; and Project monitoring stage. Affected communities and public participation or consultation also can be conducted in other stages outside of the above mentioned 03 stages as required by stakeholders. However, only a small number of projects completed the EIA process under the existing EIA Sub-Decree with limited engagement from affected communities. Therefore, it is clear that the EIA process is considered weak in effectively engaging with affected communities, addressing and reducing the impact of the developed projects.
Q4 Addressing the power imbalances btw communities and investors
Responding from the civil society perspective, the reality is that rural communities are rarely provided sufficient information or meaningfully consulted about large-scale investment projects, including agricultural investments, that affect them. We have never seen a case in which a business involved in a large-scale plantation in the Mekong region has genuinely sought and obtained the free, prior and informed consent of a community before moving ahead with its business activities. The typical line we hear from businesses is that the government granted them the concession over the land, and it’s not the business’s responsibility to ensure that no local communities were living there and have claims to the land. This is despite human rights standards, and in some cases national laws, that squarely place responsibilities on business to conduct due diligence and impact assessments in relation to land rights and other impacts on local communities.
Rural communities must become better equipped at seeking out information about proposed large-scale agricultural investments in their villages and proactively responding to this information at early stages. Communities need to be able to access support from high quality legal aid and corporate accountability organizations so that they can understand their rights and how to claim them, including through dialogue with investors. (In an ideal world, government agencies should exist to provide investment information to communities and support their interests.)
Because the reality is that there are deep power imbalances between communities and investors in the region, communities need to find ways to gain strength to level out the playing field. In addition to crucial factors such as community organizing and solidarity, one important way to do this is by understanding exactly who the investors are and what motivates and influences their decision-making. Following their money up to their shareholders and financiers and down to their buyers and other customers, and then identifying points of leverage to influence them is one important method of leveling out the playing field. Accessing complaints mechanisms that provide independent professional mediators/facilitators to support dialogue between the community and the company can be another important aspect of fair negotiations, and ideally, a process of FPIC. Dialogue should aim to reach agreement on environmental and social safeguards around an agriculture project that ensure full respect for local tenure and other rights, and benefit sharing for the local community. If full respect for tenure and human rights and benefits to the local community are not possible, the investor should accept a community decision that the project is undesirable and should not proceed at all.
How can we access to independent profess mediators/facilitators?
I agreed and liked your point on independent professional mediators/facilitators. But from the experiences in Cambodia, you know very well, it’s difficult for us to find and access them. The question is, can CSOs/NGOs people be independent and neutral for such a position? From government and company, especially local authorities perceive CSOs/NGOs as bias and they don’t want to cooperate.
In Cambodia, we can access more to arbitrators than mediators, especially in the labor disputes. In your opinion and experience, can arbitrators support dialogue and fair negotiations between the parties?
Q5 - Concessions, leases and contract farming
At first glance, contract farming or land leases appear to be more beneficial alternatives to large plantations or concessions. For instance, in the “3+2” contract model applied in Laos, investors provide inputs, technical advice and market access, while farmers use their land and labor. In land lease arrangements, investors pay land holders to use the land for a fixed period. Both forms of investment avoid the conflicts over land acquisition and compensation that are common with economic land concessions. Similarly, research on different forms of land consolidation in Vietnam (by Oxfam and IPSARD, 2013) concludes that models in which farmers keep their land use right certificates offer better protection than those in which farmers give up land use rights to companies. If the investment fails, or the market changes, farmers still have land and can potentially shift to other crops.
But the benefits of these alternatives really depend on the details. How is produce shared between the company and farmers? What prices are offered, and are these guaranteed? What is the role of local authorities (such as village heads or commune/district officials) in the contracts or lease agreements? Having government as a witness to contracts helps reduce risks for both farmers and companies, but if the contract is actually signed between companies and authorities (and not farmers), how voluntary is farmers’ participation? And what happens in case of farmers’ non-compliance with contracts, for instance selling crops to third parties for a higher price?
When leases and contracts are negotiated, there is typically an “asymmetric information” problem: farmers and local authorities know little about the technical inputs and market price of the crop, while companies know this information well. Thus, initial agreements and percentages of shared benefit tend to be in favor of the company. When farmers and local authorities learn more later on, conflicts can result. Compared with large-scale concessions which often create conflict at the beginning because of land acquisition, conflicts over contract farming tend to arise later once products are available.
In addition, contract and leasing mechanisms are no safeguard against environmental damage resulting from land clearance or overuse of chemicals. In northern Laos, Chinese land leases for banana growing have caused significant water pollution, leading authorities to ban new plantations. In this case, there is not much difference between large-scale land acquisition and alternative models: investors and farmers could take steps to limit environmental degradation, but their short-term incentives are to maximize yields and look the other way.
It’s important to remember that land concessions, contracts and leases are all part of a commodification of agriculture that reverses centuries of sustainable practices by farmers and forest dwellers. In this sense, the true alternative to the problems of large-scale investment is a return to the roots of smallholder and community management, trusting in farmers’ local knowledge. Government policies should ensure that farmers who make this choice have secure land tenure and are treated fairly in the market. Farmers should have the freedom to organize themselves into producers’ groups, community associations, and cooperatives, which have been shown to increase farmers’ access to information and collective position in the market. If farmers do choose to enter into contracts with outside companies, stronger associations and intensive, equal dialogue at the beginning of the process will enable them to protect their interests and promote compliance.
contract farming - an inclusive alternative for smallholders?
I agree with you that it is important to problematize efforts to position contract farming as an inclusive alternative for smallholders to outright land acquisitions by agri-business capital.
Many of these so-called inclusive agribusiness models are premised on the idea that greater efficiency and equity can be achieved by matching the complementary assets of agribusiness companies, namely their access to technology, capital and markets; and those of smallholders, namely their labour, land and local knowledge.
But this win-win narrative is questioned by a body of studies that suggest contract farming schemes may result in equally negative impacts on smallholder farmers as land acquisition, including loss of control over land use decisions, increasing inequality, capture of benefits by local elites, and even eventual loss of land. Situating contract farming within livelihood terrains and political-economic realities in which they operate is thus critical for interrogating its potential impacts.
In Myanmar, various large-scale agribusiness concessions in the central areas first gravitated towards contract farming because they were unable to meet production quotas set by the government that came with the concessions. However, this largely amounted to adopting a “quasi-feudal system”. Today, models and arrangements have diversified substantially in countries such as Laos and Myanmar, and more research is needed to assess the opportunities and impacts of different arrangements.
While there are some positive examples in the region where contract farming has benefitted farmers and offered new livelihood opportunities (e.g. Manorom et al 2011), in many other cases farmers are too poorly organised to reap potential benefits, and many are vulnerable to exploitation. A report on CP maize contract farming in Myanmar’s Shan State provides damning evidence of the risks associated with contract farming that fall on smallholders - many of whom are dispossessed through debts incurred by new patterns of capital engagement with farming. In this case, differential patterns of accumulation and dispossession for low- versus high capital households are largely influenced by poor households’ reliance on high-interest loans from local money brokers.
Nevertheless, some studies employing value chain analysis point to areas where private investment can be better channelled in ways that distribute benefits more evenly. For example, there are suggestions that FDI should target food processing and food retail, rather than food production (as it has high employment multiplier effects).
Rather than incorporating smallholders into relations of dependence with agribusinesses, what is needed is public investment that supports small-scale farmers to become more productive in a free-exchange market. Increasing security of tenure is critical, but it also needs to be accompanied by appropriate agricultural support, including the provision of public infrastructure, such as roads, extension services, information, affordable inputs and access to cheap credit. This stands in contrast to many government's approach to reforms, which envisages limited or no role for smallholder farmers in economic development.
Q5 Adapting policies and practices to new forms of investment
For decades, one of the top priorities of the Lao Government is to improve the laws and regulations aiming maximize the shared benefits of the investment projects to all parties and also to mitigate the risks and side effects of activities. According to the newly revised Investment Promotion Law (IPL) 2016, it defines principles, regulations and measures regarding the domestic and foreign investment promotion and administration in order to enable convenient, expeditious, transparent and proper investments, as protected by the Government, aiming to ensure the rights and benefits of investors, the state, collective and people, enabling the regional and international integration, contributing to the continuous growth of national socio-economic development in line with green direction and sustainability. Moreover, the moratoria on certain investments are needed to introduce aiming to review and introduce a proper approach to effectively manage and promote investments for contributing to the goals of economic growth.
Under the IPL law, it clearly incentivizes 09 business activities, and one of those is investing in agriculture with the focus on Clean, toxic-free agriculture, planting seed production, animal breeding, industrial plantation, forestry development, protection of environment and bio-diversity, activities promoting rural development and poverty reduction. In recognizing the important roles of the small and medium enterprises of industry sector to the economy, the small and medium agriculture producers play similar role to ensure the income generation of people in the rural area. Lao Government has promoted different forms of investments and types that based on the experiences and best practices that learnt from other countries. The contract farming and lease arrangement between local farmers/people are among the practices have been practiced aiming to small farmers and local people would be able to engage business deal directly with investors. These two approaches have generated benefits to local farmers in the form of rental fees and job creation. However, some agriculture projects posted negative consequences to environment and as well as financial difficulty to local farmers. There are several factors contributed to these problems, some of the key factors are lack of specific regulations in place, insufficient laws enforcement of the authorities and weakness of local farmers.
In response to these issues, the Lao Government, with the support from MRLG, has drafting the instruction/guidelines for investment in food crops planation. This legal document will set a clear guidance for enforcement authorities at all levels, private sector and local community for licensing and managing of agriculture investment in public land and private land by aiming to ensure and protect the benefits of investors and local people and be able to integrate to regional and international market and contribute to the social-economic development in the green growth direction. This guideline and its related tool would strengthen the management and consistency of enforcement. Moreover, it would strengthen the local community on exercising their rights and how to mitigate risks associate with lease arrangement with the investors.
In complementing to the above instruction/guideline, the Lao Government has strengthened on the monitoring system. The tools and technical aspect of the monitoring have been co-developed with GIZ. In addition to that, we also have a multi-stakeholder platform, including government agencies, civil society organizations and private sectors, aiming to engage those three parties who are driving land use change, regulating the investment; presenting the local community. The ultimate goal of this diverse working group is to work together on challenges and best practices related to agriculture investment of large and small scale.
In the future, when the local farmers get strong and be able to co-work with investor responsibly, the government would put more focus on sufficient and strict enforcement of authorities at all level. Given regulations in place, sufficient laws enforcement and the strength of local farmers, the agriculture investment in Laos will be a responsible and mutual benefits one.
Re: Adapting policies and practices to new forms of investment
Phouvong, you raise a very high level argument for improving the framework of investment in Lao PDR, and it is appreciated that this is being revised towards more responsible investment. However, you also intimate the important point that in many cases ‘Laos is also not quite ready’, especially not ready for heavy-handed monitoring or enforcement. The question then becomes, how to get ready?
At the same time however, there are strong needs of farmers to be more proactively supported, so they are able to compete with larger scale and monopolistic investments. This is arguably very important, particularly if there is really to be true sentiment to the point you raised on ensure smallholder farmers and local people continue to support the rural economy.
Q6 Venues/ Platform to discuss regulatory environment
For any platform to be effective, trust among stakeholders needs to be built in the first place. Sometimes, multi-stakeholder initiatives (MSI) with trusted facilitators can serve this purpose and open the dialogue. Nevertheless, in many countries in the Mekong Region, individual dialogue with each stakeholder is necessary for trust building before they feel comfortable to have open conversations with each other. For example, companies from emerging markets, especially small and medium-sized enterprises (SMEs), have not had much experience in participating in multi-stakeholder events or in directly communicating with governments or communities. Preliminary engagement with each stakeholder can also help identify common grounds and gaps, making subsequent multi-stakeholder dialogues more effective. In any case, trustworthy facilitators or brokers, like NGOs, can play an important role.
We find evidence-based and solution-oriented discussions are generally effective when it comes to regulatory issues in this region, as they are perceived to be constructive and practical. Therefore, research sharing and capacity building workshops often provide good entry points to engage stakeholders and lead the discussion to action. For instance, the government of China has official think tanks at different levels to support policy-making; cooperating with them on research projects can provide indirect access to discussions with the government which would otherwise be difficult to attain.
In recent years, there have been increasing multi-stakeholder meetings or workshops at the national level, which are suitable for building a mutual understanding on general policy issues. It can also contribute to more coordinated governance by bridging gaps between relevant regulation and responsible government offices, like that on land and investment. However, in-depth discussion and concrete action points are often limited, which might lead to frustration, and a growing number of similar events might overwhelm the same stakeholders. Some companies, especially SMEs, which are more drawn to pragmatic discussion specific to their own operation, might lose interest if discussions fail to generate tangible outcomes. It is also challenging to ensure proper representation of all stakeholders over dividing issues. Therefore, it is necessary to complement national MSIs with discussion on specific legislation, sub-national MSIs and sectoral discussion in relation to specific commodities and so on.
We have seen positive communication and cooperation on specific issues at the local level, which can in turn provide experience on the ground for upper-scale discussion. Strengthening such a dialectical process between different platforms at different levels can improve policies and their implementation like, for example, the land use plan.
Similarly, regional MSIs that include key countries can provide a more comfortable environment for some countries to discuss their regulatory issues without feeling being singled out or bashed. Regional dynamics, if facilitated in a constructive way by sharing and learning, can contribute to race to the top. Moreover, regional platforms are particularly suitable for discussion of international and regional guidelines and standards. However, my observation is that there is often a long way between discussion and action to improve regional and national governance.
Given the nature of FDI, cross-border platforms are also important. Building bilateral platforms between the governments of the home and host countries can improve joint governance. However, it is yet to be further explored how other stakeholders can contribute to this process.
Last but not the least, establishing a regulatory environment is not only a matter of governments and companies. Communities, being one of the most important stakeholders, should always have their voice in the discussion. We have encountered challenges of bringing in community representatives to platforms at national level or above. Substantial work on organizing communities and capacity building is needed.
Online dialogue closed on Tuesday 24.10
The online dialogue will be closed next Tuesday 24.10 and not today as announced.
All the best
Q4/Q6 Engaging with private sector or policy/regulatory reforms
First of all thanks to Jean-Christophe for extending the deadline for this online dialogue!
Having been involved in monitoring and field research of large scale agricultural investments in Lao PDR and Cambodia for quite some time, I often ask myself how the interests of the concerned local communities can be most effectively protected, by directly addressing the private sector concessionaires or by trying to engage the Governments in policy dialogue and regulatory reform.
From my experience there are virtually no examples available where local communities in both countries have been able to defend their interests against an investor entirely on their own. Even after capacity building and strengthening of community representatives by CSOs they will in the vast majority of cases still highly depend on the support of these CSOs for advocacy work, legal action or dialogue with government representatives and concessionaires.
Certainly, approaches like the 'Follow the Money' initiative constitute very valuable attempts to engage with the private sector representatives, but we must also be aware of its limitations as this appraoch could only be effective when international funding sources have been involved. In other cases we can refer to existing CSR mechanisms of the companies involved, RAI principles and other internationally applicable safeguards. Yet, for example in Cambodia over 60% of the economic land concessions for agricultural and forestry purposes have been allocated to Cambodian companies, with some of these only later getting engaged in sub-leasing activities to foreign companies or joint ventures. Virtually all these concessionaires have very close affiliations with the Cambodian Government. Some of these ELCs have been allocated more for political reasons than for macro-economic purposes. The same is true for some of the FDI as well.
So, how can we engage this type of companies? In both countries we have examples of more "progressive" private sector representatives, who want to play by the rules and are more sensitive to community concerns, such as Stora Enso in Lao PDR or Grandis Timber in Cambodia. I agree with some of the posts saying that positive examples need to be shared and widely communicated. We already have enough knowledge and documentation of negative impacts! Yet, our positive examples are few and far between and, as mentioned above, the vast majority of concessionaires do not feel the need to change their style of work. What could be the incentive for them to change their attitudes? I always thought that successful mediation of their land conflicts with neighboring communities and the fact that they would "live in peace with their neighbors" after settlements have been reached would constitute a strong incentive. Yet, we have not seen this effect by the "settled" HAGL case in Cambodia and it seems too early to publicize the results of other intiatives yet. In Cambodia there are still many concessionaires who do not seem to mind the fact that they have been operating in constant conflict with the neighboring communities and displaced villagers for many years.
On the other hand, exactly these conflicts were among the main reasons for the Cambodian Government to initiate the review process of the ELCs in 2012 which led to the cancellation or voluntary return of some 35 ELCs in late 2014 and early 2015. Since then a number of intiatives by various donors and CSOs have been undertaken to engage with the Cambodian Government and the working group in charge to jointly assess the cancelled ELCs, to discuss their future use and allocation as well as to deduct some policy recommendations from these exercises. Unfortunately, none of this work has so far resulted in any clarification of land tenure rights in these areas, any re-allocation of the cancelled ELC land to local communities or designation of the few remaining forest areas within this cancelled ELC land for conservation purposes. Instead, in the past 3 years we have seen concessionaires simply remaining on the land and pursuing their activities, demands for compensation and even legal action by the ELC owners against the Government and in the vast majority of cases heavy encroachment by outsiders into the cancelled ELC areas. Once again the policy dialogue activities and cooperation with the concerned government stakeholders has (at least for now) not yielded any positive results. Even according to some involved officials the situation in some of the 35 cancelled ELCs has become so confused and chaotic that no solutions of the land disputes are in sight.
Land deals plagued by a lack of transparency
Let me begin by stating that I am environmental scientist and am not an expert on the policy and regulatory frameworks that govern large-scale land acquisitions in the Mekong. These land deals have been plagued by a lack of transparency in their selection and implementation and have largely ignored the fact that - while land may not be formally tenured by an individual or company - it is likely providing essential ecosystem services that support the livelihoods of rural communities and enhance tropical biodiversity. A key step forward for achieving more responsible and equitable land investments is for georeferenced data on pending and current deals to be made publicly available. This can allow for a more impartial assessment of the potential environmental and social consequences of such investments and help to provide crucial information in the location selection process. Examples of the types of quantitative assessments that have been done using this spatially explicit information include a study in Cambodia showing that economic land concessions have accelerated forest loss across the country (Davis et al., 2015, Nature Geoscience) and a study in Indonesia demonstrating that forest conversion to oil palm plantations has substantially enhanced the nation's greenhouse gas emissions (Carlson et al., 2012, Nature Climate Change). Such information can also be an effective tool for enforcement, where variously satellite-based datasets can objectively examine (in near real time) whether investors are adhering to the environmental stipulations of their contracts.
From the perspectives of both the environment and livelihoods, the large-scale land concession model seems to be largely deficient. Land investments are viewed as a means to promote foreign investments, facilitate agricultural technologies transfers, and enhance rural development and agricultural production. However, a large body of scientific and anecdotal evidence tells us otherwise. Government resources may be better spent focusing on ways to support the livelihoods of rural communities more directly. For instance, programs aimed at increasing irrigation infrastructure or subsidizing fertilizers for smallholders can offer promise in this regard. Overall, there is a need for greater dialogue with local communities and greater regulatory and enforcement capacity, tailored to local needs and considerations.
A brief synthesis of the dialogue
As we are now closing the dialogue, let me thank all of you for your engagement in the discussion. It has been an interesting conversation.
The dialogue has been a useful way to reach consensus among participants about the role of large-scale land investment in the Mekong region and the need to discipline the process towards more responsible investment and true engagement with local communities affected by them.
Following the sequence of the questions set out to frame the debate, we have moved from a stock-taking discussion on 20 years of the current large-scale agricultural development model to an exploration of alternative models that are more inclusive of smallholder farmers. Along this journey, consensus was built on various line of debates:
1. Twenty years of large-scale land investment in the Mekong: highly contested outcomes
A new wave of LSLA initiated in the 90’s, in full swing between 2007-2011, has reconfigured the agrarian structure of countries in the Mekong region, namely Cambodia, Laos and Myanmar. Substantial areas of land were allocated for large-scale investment to companies that were recognised (at least at the policy level) as the new engine of rural development, despite the prevalence of smallholder farmers in the national labour force.
Yet, the idea of granting land to companies was rooted in a misleading view that land for large-scale development was available in the first place. In fact, many discussants have argued that land granted as agro-industrial concessions was already being utilised by communities who depend on it for their livelihoods and managed under different forms of customary tenure arrangements (private and collective). The overlap of land claims between concessionaires and rural communities has been a fundamental cause of conflicts, which is seen as a tremendous social cost of the large-scale agriculture movement of today.
On the other hand, large-scale land-based investments offer mixed results. The level of implementation of concession is very limited (15% in Myanmar, 20% in Cambodia according to recent estimates). The trickledown effects on the local economy, for instance through job creations, did not materialise or are not as expected. The relevance of the taxes and royalties paid by concessionaires as a contribution to the national revenue and GDP - one of the main tenets of the concession model - was questioned by one discussant, who pointed to the lack of transparency in national budget management. Other discussants suggested the actual share of smallholder farmers to GDP is largely under-estimated, and biases the appreciation of land concession contribution to the national economy.
Participants also agreed that the rules and guidelines put in place to regulate the investments were most often not followed, and noted the general lack of transparency revolving around the management of these large-scale land deals. They also pointed at the weak coordination of authorities – across sectors and across levels – to approve and regulate land deals. Protective measures for smallholders such as the recognition of local land use plans, access to grievance mechanisms, or proper compensation were thought to be mostly inefficient. A dimension that has been quite neglected by the proponents of the large-scale model is that land acquired for agro-industrial investment is also likely to provide essential ecosystem services that maintain watersheds and enhance tropical biodiversity.
2. State-sponsored evaluations of land concession: a contrasted view
Regional governments and administrations have become increasingly aware of the shortcomings of the large-scale model. In Laos and Cambodia, moratoria of new concessions were established in 2012. In Laos, the government has initiated several evaluation processes of on-going concessions efforts. With support from the Swiss government, the Lao administration has tried to establish an integrated information system on concessions to examine the quality of investments in land. With technical assistance from GIZ, the Lao Ministry of Planning and Investment has also engaged in the design of a system to monitor the quality of the investment. In conjunction with the new Lao investment law, regulatory guidelines are also being developed.
In Cambodia and Myanmar, both governments are actively engaged in revoking or reducing some concessions, and have committed to returning some unused land to smallholder farmers. Despite good intentions, some discussants have questioned these intentions, arguing that governments are also considering reallocating land to other companies or to other State projects. In Cambodia, due to the lack of clear guidance on how the return of land should take place, the status quo benefits concessionaires who have retained control over land, or a cohort of new opportunistic ‘farmers’ who have massively encroached inside cancelled concessions.
3. Mapping land concessions: a source of tension between stakeholders, but also a tool for land reallocation
An experiment piloted in Myanmar with support from the One Map project comprises a spatially explicit land use assessment of concessions areas, namely oil palm in Tanintharyi. Equipped with high-quality spatial data and time-series land use maps, the pilot aims to establish a process by which stakeholders could identify which part of the concession land could be returned to farmers or claimed back by the government. Maps and spatial data have turned to be great tools to facilitate the process. However, maps elicit tensions between stakeholders, which is particularly vivid in a country like Myanmar, characterised by legacy conflicts. To address these tensions, the methodology put in place has turned out to be much more effective when enabling a process wherein different stakeholders have a say in designing data collection protocols. In highly conflict-prone environments, this is seen as a necessary condition for discussions, negotiations and compromises to take place in a constructive environment. These are important lessons learned for countries in the region which are also involved in land reallocation.
One discussant called for more spatial transparency and wide public disclosure of data and information, to allow for impartial assessment of the economic, environmental and social consequences of such investments.
4. Putting the State [back] on centre stage
Some discussants reconsidered the central role that states should play in regulating but also in supporting alternative models of agricultural development, which are more sustainable and more inclusive of smallholder farmers.
There is little doubt that the role of the State is important in infrastructure development, provision of market information, and extension services, as well as in enabling policies to effectively integrate smallholders in primary production. But the State is also pivotal in the direct support of smallholder communities, and has the power to help processes actually work better. The case of Ban Hat Nyao in northern Laos illustrates this argument very well. In this region located in the northern part of Laos, communities have organised themselves, acquired technical experience and skills to grow rubber, and sought out access to markets, to become well-managed smallholder rubber production schemes. Yet, some key elements, directly provided by the State, were crucial to make this endeavour a success: a soft loan by a provincial bank to establish a plantation, the recognition of a locally-produced land use plan at district level, and the enhancement of an institutional environment enabling the communities to use the plan to effectively prevent the land from being allocated to outsiders.
Beyond the particular situation of Ban Hat Nyao, this case provides two important lessons: 1) State supports that catalyse smallholders’ efforts for more efficient agricultural production, access to international market and organisational autonomy can turn out to be a high-return investment and 2) the recognition and securing of land tenure create conditions for investors to negotiate responsibly with communities and allow the investment to materialise in real production, and not only in speculative control over land.
5. The CSO interface between investors/companies and local communities: a multiplicity of approaches
The engagement of the private sector with rural communities is subject to heated discussions and controversies. A largely shared view amongst discussants is that companies are not behaving responsibly with communities. They usually fail to adhere to their responsibility of due diligence and impact assessment, incumbent upon them by international human rights standards and national laws. Instead, companies usually pass the blame onto governments for failing to conduct proper land identification and FPIC.
In this context, three engagement approaches between private sector and rural communities were presented and discussed, in particular with regard to the role that Civil Society Organizations (CSOs) play in bridging the interests or negotiating the positions of both stakeholder groups:
i) when convergence between the objectives of companies and civil society partners exists (which is often not the case), a CSO can facilitate the incorporation of smallholders in the production scheme of the companies. This can be done by providing information about the investments and engage in meaningful FPIC before the investment begins.
ii) If such agreements can’t be found a priori between a CSO and a company, it is essential to raise awareness of investors and encourage engagement in responsible agricultural investment practices and discourage irresponsible agriculture investments. An important element of the approach is to make sure communities have access to environmental and social impacts assessment reports (and have the capacity to understand them) to directly negotiate with Company and State representatives.
iii) In order to address power asymmetries and level out the playing field between communities and companies, a third approach involves supporting communities to map out the upstream segments of the investment (identifying financiers) as well as downstream segments (identifying buyers and customers). This would allow communities to access high-level complaint mechanisms that provide independent services for fair negotiation between both parties.
6. Towards more inclusive agricultural development models?
Contract farming, nucleus/out-grower schemes or land leases arrangements offer better prospects than large-scale land concessions, particularly as smallholders retain control over their land and other means of production. These models are promoted on the premise that greater efficiency and equity can be achieved by combining the assets of investors (capital, access to market, technology) with those of smallholders (labour, land, knowledge of local environment).
In a number of cases (eg Myanmar or Cambodia), such alternative models have emerged as a result of conflicts revolving around unregulated large-scale land concessions or because of the inability of companies to meet production quotas set by the government.
Discussants have suggested that in theory, these models offer more viable and inclusive alternatives. However, they have pointed that contract farming is not necessarily a panacea; its outcomes very much depend on the terms of the contract/agreement signed between the companies and the smallholders. This relates to the distribution of the value added, the prices offered, the management of the credit scheme associated with contracts, the role of local authorities, and how the environmental costs are accounted for. Given the asymmetry of information between companies and farmers, particularly regarding market and price of inputs and outputs, it is important to level the playing field and make sure the exclusion from land - that characterises the large-scale land acquisition – turns into market-based exclusion. One case of contract farming in Shan State shows how monopolistic control of a contract farming scheme can quickly lead to debt-related land dispossession amongst the peasantry.
7. Improving laws, regulations, monitoring …. and beyond
Current efforts by governments in the region have contributed to the intensification of laws, guidelines and monitoring systems to regulate investment projects with a view to maximizing the positive benefits for all parties and reducing negative impacts on farmers. These concerns for improving investment frameworks in Laos and other countries towards more responsible investments are seen as a move into the right direction.
But a number of discussants have also pointed out the need to go beyond just more rules and regulations. To them, it is equally important to provide more direct and proactive support to enable smallholders to compete with larger investments and reduce their dependence and vulnerability vis-à-vis agro-business lobbies.
8. A platform to discuss regulatory environment: building trust and seeking solutions
An effective platform where the regulatory environment of agricultural investments can be discussed between the government and the private sector is essential. And building trust among stakeholders is a prerequisite to that. The role of facilitators is essential to making sure each individual participant in multi-stakeholder dialogues feel comfortable and willing to engage in constructive two-way communication.
Without a doubt, sharing of experience and lessons learned, and building mutual understanding is an important aspect of such a discussion. However, one discussant has insisted on the need to offer a space where in-depth and specific issues are addressed in ways that generate tangible outcomes or concrete action points for participants.
Thank you again to everyone for making this a lively, interesting and constructive discussion. Special thanks to all contributors and to all those from outside MRLG partnerships who offered very useful perspectives.
The dialogue will remain open until Friday (27th) in case you would like to react to these final remarks or share your views on this dialogue more generally.
All good wishes
Use government leasing model like in Hong Kong
Anyone who invests in this project becomes a land owner with the eventual ability to exploit others who are not. This is immoral and socially unjust, although it may seem like a good idea at the time. All of the land should be purchased by the government and then leased out to those who find it worthwhile to take the opportunity to make good use of it. However, what use they choose should be entirely up to them, without government control--this not being land nationalization.
This proposal will create a national economy similar to that of Hong Kong, where nearly all the land is leased out in this way and there is no need for taxation because the national income from leasing is sufficient. It is the equivalent of Henry George's Single Tax (or land value taxation), but easier for the any of the present-day landlords to accept, since they sell the land at current prices and can then lease it relatively cheaply, leaving them with money to invest in its capitalistic development. The government will need to borrow money for this purpose, which once begun will last for perhaps 10 years until the leases catch up. They can issue special land bonds instead of money, if this is likely to ease the danger of inflation were newly minted currency were to be paid.
on bringing back the state
Thank you Jean-Christophe for summarising the dialogue into a neat and thought-provoking narrative.
Just a small footnote on the point of bringing [back] the state centre stage, and some the challenges around that which Florian also raised in his post. Many have remarked on the way in which public and private interests are increasingly blurred in the Mekong region, as private sector actors collude with state agencies and individuals to access land and resources for profit generation. Jim Glassman (2010) notes in his book Bounding the Mekong, “States and markets are not only intertwined but mutually produce one another”. States acting as entrepreneurs can be seen in the state-owned or quasi-state owned companies and public-private ventures. In so far as the notion of a ‘private state’ has any grounding, it is perhaps most clear when it comes to SEZ development, but more difficult to quantify on land deals in the region. We see states being shareholders of companies and people using their position within the state bureaucracy to do business, as in the case ‘tycoons’ in Cambodia who make donations to the state to access land and resources for profitable business ventures. In the context of ‘state capture’ by private interests, monitoring and understanding internal political processes and power plays is important if points of leverage are to be identified. However, lack of transparency in the workings and machinations of governments in this region makes this a difficult task.