Updated on 30 March 2023
Land investments encompass a wide range of activity such as forestry, agriculture for both food and non-food commodities, extractive projects including mining, industrial activities such as energy sector developments and the use of Special Economic Zones, urban infrastructure, tourism, and conservation projects. Incoming foreign direct investment (FDI) can bring capital, jobs, technology and knowledge transfer, and infrastructure development. For some low-income but resource-rich countries, resource development is seen as an important component of national strategies for economic growth.
While there is a continued focus on resource extraction in many countries, such as through timber extraction or mining, a shift to a low-carbon future may require new types of land investments. In some areas, communities located near potential land investments may also be interested in the potential benefits that such projects can bring. There may be labour opportunities, although the number of jobs created is sometimes much lower than expected, with those available paying low salaries. However, evidence also highlights the risks associated with land investments, including land conflict and dispossession, with far-reaching impacts on livelihoods, culture and social identity. Research on a wave of agribusiness plantation deals over the past 15 years has highlighted these problems.
Key concepts and terms
There are numerous cross-cutting themes that link land and investments. A few key terms are outlined below.
There are differing views on the relationship between investments in agricultural land and food security. Some claim that investments can improve productivity by allowing the harvest to enter retail markets for equitable distribution among domestic and international markets. However, considerable evidence suggests that many large-scale projects fail to achieve this outcome. Others highlight how investments contribute to food insecurity where they promote the cultivation of non-food agricultural commodities or encourage conversion of land away from food production.
Investments frequently involve land transfers, albeit in a variety of ways. For example, large-scale land investments may engage tracts of state land that are leased to investors (such as in a concession) for a specified period of time. Investors often directly contact landowners for a transfer of ownership or usage rights. However, land users frequently have a weak bargaining power over deals with investors but relent due to limited alternative options, leading to inequitable outcomes. Many transfers take place on the basis on compulsory acquisition. They can also transpire without acknowledging the rights of local users, leading to claims of land grabbing.
Land investment took significant influence from the economic downturn of 2007/8 and its associate food price spikes. Agribusinesses, in several cases under state support, looked to maintain access to food production systems, particularly in countries with low production costs. This is commonly aligned to conceptual framings such as the global land rush and land grabbing. There has been a resultant response to improve land governance such as through the ratification of the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGTs). It is also possible to see this recent surge of interest within a broader historical perspective, for example with colonial expansions in the 19th century involving a global acquisition of productive land by European powers. When imperial structures were dismantled around or after the Second World War, a new world order moved towards open trade, allowing new ways to access land around the world. A useful overview on this outlook is found in the chapter ‘A Historical Perspective on Land Tenure Security’ by Sunderlin and Holland, in Holland et al. 2022.
Foreign direct investment, whether through individuals or companies, gains perhaps most coverage where land is involved. However, there is often neglected attention placed on local investors, where elite and business leaders take an acute interest in acquiring land for their projects. Local actors can also be vital in brokering land deals.
In principle, land tenure security means that users have a greater likelihood of keeping hold of their land rather than facing a threat of dispossession for a land investment. Where eviction does occur, they are more likely to receive appropriate compensation. Furthermore, they may be more likely or able to invest sustainably and productively in their land. However, there is a risk that formalising land leaves users at the mercy of inequitable markets, and suffering diminished livelihoods (for some reflections here, see Hirsch 2011). It is also possible that private titles create social and economic development but at the expense of the environment (for such a perspective see this report by the Oakland Institute with six country case studies).
Case study: conflict, cattle and deforestation in Colombia
Colombia provides a stark image of how unregulated land investments operate where achieving coherent land governance has proved problematic. The report A Broken Canopy: Preventing Deforestation and Conflict in Colombia by International Crisis Group highlights the case of increased deforestation to provide land and feed several economic activities. This links to developments in the long-running civil conflict within the country. In 2014, the Revolutionary Armed Forces of Colombia (FARC) declared a ceasefire, then signing up to the 2016 peace accord. Following the subsequent withdrawal of FARC from many rural areas, other insurgencies and criminal organisations have taken control of forest areas to illegally expand business enterprises. The main cause of deforestation is to create space for cattle ranching. Although supplying legal supply chains, the activity is also linked to criminal interests, acting as a site to launder revenue from the cocaine industry. Land may be grabbed from local actors or taken through encroachment into protected areas. Families displaced from other regions of Colombia are backed by investors and clear land for grazing.
The linkages between the overlapping issues of land investment, deforestation and conflict are complex. But the potential consequences are clear, with tree loss threatening the ability of Colombia to meet its zero-deforestation goal by 2030 and undermining the prospects of peace.
Cattle on Colombia’s eastern plains, ©2011 CIAT/Neil Palmer, Creative Commons Attribution-ShareAlike 2.0 Generic Licence
International frameworks and policies
There are several international frameworks and guidelines which promote best practices for land investments. The list below is not exhaustive (as of November 2022, the Land Portal library has nearly 4,500 articles tagged under Land and Investments) but highlights some of the most important and referenced frameworks and guidelines.
Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (VGGTs), endorsed on 11 May 2012
The VGGTs are the internationally negotiated framework to improve land governance. Section 12 of the VGGTs focuses specifically on investments, including those undertaken by smallholders as well as those involving land rights transactions. It is noted that “[r]esponsible investments should do no harm, safeguard against dispossession of legitimate tenure right holders and environmental damage, and should respect human rights” (Section 12.4). It suggests that governments “should consider promoting a range of production and investment models that do not result in the large-scale transfer of tenure rights to investors, and should encourage partnerships with local tenure right holders” (Section 12.6). Further information on the VGGTs can be found on the Land Portal’s corresponding issues page. There are also technical guides linking the VGGTs to modes of responsible investment. These include:
- Respecting free, prior and informed consent
- Safeguarding land tenure rights in the context of agricultural investment
- Responsible governance of tenure and the law: a guide for lawyers and other legal service providers
- Responsible governance of tenure: a technical guide for investors
Principles for Responsible Investment in Agriculture and Food Systems, endorsed on 15 October 2014
Adopted by the Committee on World Food Security (CFS), the principles replicate the language of the VGGTs on responsible investment, establishing that states “should safeguard against dispossession of legitimate tenure rights and environmental damage” (Article 20). However, they go into significant detail on a range of topics not included in the VGGTs such as how responsible investments can contribute to food security, empower both women and youth, and support safe and healthy agriculture and food systems. There is also an extensive section on the roles and responsibilities of stakeholders in agricultural investments.
Sustainable Development Goals, adopted by UN member states in 2015
While the Sustainable Development Goals do not explicitly mention land investments, they do offer guidance to governments, investors, and others to incorporate investment support into their planning and activities. SDG Indicator 1.4.2, which specifically measures tenure security, can be viewed as particularly important in contexts where large-scale land investments may occur.
Large-scale land acquisitions and leases: A set of core principles and measures to address the human rights challenge, 2009
These UN set of principles, developed by the UN Special Rapporteur on the right to food, draw upon international human rights law, providing guidance for large-scale land investments. They focus on the human rights to food, the rights of land users, particularly Indigenous Peoples, the human rights of agricultural workers, and the rights of local populations in land negotiations.
United Nations Basic Principles and Guidelines on Development-based Evictions and Displacement, 2007
These guidelines, developed by the UN Special Rapporteur on the right to adequate housing and based on international human rights law, assist states for developing policies and laws that will prevent domestic forced evictions.
Some sets of principles carry a regional focus:
Guiding Principles on Large Scale Land-Based Investments in Africa, 2014
African Union Member States have developed a set of guiding principles that call for, among other things, respect of existing customarily defined land rights and of women’s land rights.
ASEAN Guidelines on Promoting Responsible Investment in Food, Agriculture and Forestry (ASEAN-RAI), adopted on 11 October 2018.
The 10-point set of guidelines are based on the CFS Principles for Responsible Investment in Agriculture and Food Systems, aligned to fit with the ASEAN region. Concerning land, ASEAN-RAI calls on all parties to respect tenure rights, including and understanding local customary systems.
There are many guidelines geared towards the operation of companies in land investments. Some key examples are given below:
OECD-FAO Guidance for Responsible Agricultural Supply Chains, 2016
This guide provides support to enterprises for observing responsible business standards in their work through agricultural supply chains, including information on how to engage with indigenous peoples.
Respecting Land and Forest Rights: Risks, Opportunities and a Guide for Companies, 2015 (revised in 2019)
Produced by the Interlaken Group, this guide provides guidance and advice to companies on how to understand and implement the VGGTs in relation to land-based investments, including due diligence on the tenure rights of project-affected communities.
Legal Guide on Agricultural Land Investment Contracts, 2022
This new guide from UNIDROIT and IFAD offers support on how to integrate international principles and standards (such as UN Guiding Principles on Human Rights, the CFS RAI Principles, and the VGGTs) into agricultural land investment contracts. It works through pre-contractual issues, rights and obligations in contracting, implementation of contracts, and grievance mechanisms.
Challenges and risks
For all the positive claims about the benefits of large-scale agricultural land investments, the evidence points to the risks that far from guarantee a positive outcome. The rush for land in the decade following the 2007/8 economic downturn has bred significant scepticism around perceived social and environmental problems with a limited economic return beyond a few well-positioned stakeholders. In particular, land investments have too often bypassed the rights of local land users triggering conflicts that can ultimately create significant reputational and financial risks for investors themselves. Despite considerable literature on the conditions to create a climate of responsible investment, a real-world transition is proving hard to achieve.
The mechanics of investment are frequently unsupportive to local land users where they are in direct negotiations with investors. Achieving equitable, inclusive and sustainable investments involves actors from the public and private sectors and civil society following a well-signposted regulatory pathway to set up, implement, and share the benefits from investments. Aligning national legal and policy frameworks to follow international standards is imperative here, to then be followed by practices on the ground. It is a complex process allowing economic prosperity without compromising loss of land and access to natural resources to vulnerable communities, allowing gender sensitivity, respect to human rights, and compatibility with climate goals.
Even under secure land tenure, there are risks of government appropriation, legally justified as taking place in the public interest. This has particularly been the case for large-scale acquisitions or concessions, even if the land acquired then goes unused. Periods of such acquisition coincide with global concerns over access to resources for food and other commodities, such as after the food price spikes in 2007-8. There are fears that in a post-COVID world framed with war, disruption to global supply chains, a rising cost of living, and the growing influence of climate change, will there be a new global land rush looking for cheap land and labour to maximise access to natural resources and cover times of uncertainty.
Aerial shot of cropland in Romania, photo by Czapp Árpád, public domain
Over the last decade, a major movement in the agricultural sector involves the promotion of Responsible Agricultural Investment (RAI). There is no singular approach, and some initiatives will be more innovative than others. However, it is worth noting some of the trends involved in the movement.
Responsible investments are the ones that provide:
- acknowledgement and maintenance of tenure security for local land users
- equitable sharing of benefits between actors, including women, Indigenous Peoples, and other marginalised socio-economic groups
- sustainable land management avoiding degradation and loss of biodiversity
- food security rather than food poverty, acknowledging the risks about moving towards the cultivation of non-food commodities
- transparency and effective mechanisms to solve disputes should they arise
Much work on RAI follows the lead of the VGGTs in promoting multi-stakeholder platforms (MSPs) to bring together government actors, private sector investors, landholders, and civil society groups. However, having an equitable inclusion of voices remains a challenge, so that resulting initiatives do not favour some actors over others. As an additional challenge to RAI, it should be noted that some actors have no interest in behaving responsibly and look towards personal profit through illegal and corrupt means over any concern for shared economic benefits or environmental sustainability. In such cases, the stick may need to accompany the carrot.
Case study: achieving responsible agricultural land investment in sub-Saharan Africa
In the report Investing Responsibly in Agricultural Land: Lessons from responsible land investment pilots in sub-Saharan Africa, Julian Quan and Amaelle Seigneret provide lessons obtained from collaborations between private companies investing in land and CSOs. From 2016-2019, pilot projects took place in five African countries (Ghana, Malawi, Mozambique, Sierra Leone and Tanzania) through the UK’s LEGEND (Land: Enhancing Governance for Economic Development) programme. These projects included sugar, palm oil, plantation forestry, and eco-tourism. There were notable achievements, using some of the following approaches:
As well as improving tenure security for participants, projects looked to avoid conflict between actors, improve community organisation, and consider the roles of women to allow equitable sharing of benefits.
Transparency in investment provides an essential means by which to monitor good practices. Poor transparency limits good governance, impedes accountability, and can contribute to greater risks of conflict. Major guidelines and principles focused on responsible land and agricultural investments urge greater transparency of land investments. This includes, for example, collective action 8 of the 2016 Paris Declaration for the Open Government Partnership (OGP), which calls for “transparency and open contracts in the natural resource sector”. The Extractive Industries Transparency Initiative (EITI) provides a global standard by which to measure the open and accountable management of oil, gas and mineral resources. This includes information on land use for mining and other extractive activities. There is an opportunity both to flag up progressive work, but also highlight companies lacking transparency, noting that data on large-scale land investments is frequently limited.
Community, customary and indigenous land rights
As investors seek out new frontier areas with land availability for resource extraction and agricultural production, they increasingly come into contact with the land of indigenous peoples or other ethnic minorities, potentially situated in and around forest areas or in hilly and mountainous zones. There is much evidence of land deals, both large-scale (such as under Economic Land Concessions) or small-scale, ignoring the land claims of such marginalised groups, who frequently operate under customary systems of tenure. There is a body of thought that formalising land under customary tenure has the potential to allow users to exert bargaining power and retain an ability to decide upon its use. However, there are many who show concern that formalisation processes bring neither the hoped-for autonomy to communities nor the means to retain control over how they use their land. As a result, there is much advocacy for the recognition and protection of customary tenure in its own right as a basis to support indigenous peoples. This latter approach is found in the VGGT.
Another perspective concerns how indigenous groups and ethnic minorities invest in their own land to gain market-access, increasing economic returns and improving their livelihoods. While there are examples of local entrepreneurial endeavours as communities enter commodity value chains, such attempts do not come without considerable risks, acknowledging that the market may not treat all users equally. Indeed, there is a risk of investment through land users taking out loans leading into debt traps that result in land loss through distress sales.
Further marginalisation takes place as increased competition for land results in monopolisation by national elites who utilise ambiguities in national legal systems at the expense of customary claims to grab land for investment projects (and for other reasons too) and evict existing users. In order to promote foreign direct investment, some states have promoted new land and investment laws which provide unclear stipulations for landholders under customary rights, thereby facilitating such acquisitions and increasing the risk of dispossession 1. Both large-scale and small-scale investments as a result of new crop booms can place pressures on land use in indigenous territories, causing Indigenous Peoples to push further into marginal forest zones with resulting environmental risks, particularly through deforestation.
An important global mandate on indigenous rights is the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted in 2007 by 144 countries. Part of this declaration sees the promotion of Free, Prior and Informed Consent (FPIC) where indigenous groups must be consulted and give their approval for investment projects that use their land. However, many countries retain an ambiguous relationship with the concept of indigeneity, denying its status on claimants and failing to incorporate actions like FPIC into their legal systems.
It is also worth noting that rural communities are often highly differentiated, and the impact of investment projects and emerging land markets benefit some members over others. Therefore, it is important to take a broad view of local impacts and the potential for differentiated socio-economic outcomes. One consequence here is the impact of investments on migration, where the squeeze on resources forces local community members to move out of the area, whether further into forestlands or to new challenges in urban areas.
Case study: Rubber investment in Mondulkiri province, Cambodia
A notable case of land conflict involves a rubber investment set up in Mondulkiri province in eastern Cambodia. In 2009-10, the Cambodian government allocated two Economic Land Concessions (ELCs) to a joint venture linking to Socfin Group, a French-Luxembourg conglomerate which manages rubber plantations in Africa and Asia. There was no legal obligation to follow formal FPIC principles and engage with a local indigenous Bunong community, who lost customary lands following the investment. Yet violence broke out when land was cleared for the plantation development that included community burial sites. After five years of negotiation, the company offered options for land relocation, cash compensation, contract farming in rubber, or to keep the same land. An agreement in 2020 included the recognition of 500 hectares of communal land, which could then be formally registered.
The case study shows how ignoring the potential for conflict can hold up agricultural investments to the detriment of all sides. In particular, withholding the principle of FPIC for community involvement set the project on a pathway to violent conflict.
Further information on the story can be found in the academic article The FPIC Principle Meets Land Struggles in Cambodia, Indonesia and Papua New Guinea and reporting by the Mekong Region Land Governance project on recent settlements.
Photo: the signing process for the dispute settlement over the Socfin rubber project in Cambodia (Credit: Sothath Ngo)
Urban land tenure and investment
As concentrated conglomerations of economic activity, cities are highly attractive to investors. However, the nature of investment here differs somewhat compared to the large-scale investments looking to utilise land and natural resources in rural areas. For example, urban land markets are highly dynamic sites where rapid increases in value can prove extremely profitable. Peri-urban areas are perhaps some of the most interesting and dynamic parts of cities, where new investments are found next to long-standing communities and their practices. In these areas, forests or farmland become desirable sites for conversion into industrial, residential or infrastructure projects, as cities expand their boundaries. The initial value of such sites often fails to account for the mark-up once conversion has taken place, thereby offering the potential for high profits to investors. In countries with a centralised control of spatial planning, there may be a formal acquisition of land, legally justified as taking place in the public interest, the question then being whether the resulting compensation (in a new piece of land and/or money) is deemed appropriate to the previous landholder.
In such a dynamic environment, land speculation frequently takes place with acquisitions held for their potential return rather than a direct usage. This highlights an abstracted market value for land. But what is often lost in the monetisation of land is its spiritual, religion, social, and/or cultural value to local users. At its most extreme image, urban land becomes commoditised beyond any social function, an existential threat to the communities living within. Looking once again at peri-urban areas, the contrasting views on the meaning of land can clash, where local communities find their social and cultural order under threat by an infiltration of urban elites looking at its monetary potential. The use of digital technologies, such as blockchain technology, and cryptocurrencies, further abstracts land values away from its social and environmental importance. Therefore, questions must be asked as to whether land investments improve the liveability of cities, such as increasing the provision of green spaces to support social and environmental needs.
Land markets can have serious implications in crowded areas where available land is scarce to house a burgeoning population. A particularly vulnerable group are those living in informal housing, at risk of forced eviction to make way for urban development projects. The principle of integrated land planning allows profitable investment projects but not at the expense of cheap housing or essential public services. However, in many countries, planning remains notable by its absence, which leaves the door open for investors to access lucrative plots and push vulnerable groups further into peripheral areas. Indeed, while unskilled and cheap labour is essential to drive urban economies, the rising value of land markets makes it increasingly difficult for such groups to obtain a secure and reliable standard of living in cities.
Planning is necessary to integrate new developments within a resilient environment able to cope with the increasing impacts of climate change. It has never been more important that land investment projects undertake the necessary Environmental and Social Impact Assessments to ensure their integrity in fitting within the broader structural framework of a city. With many large cities situated in downriver delta areas, there are significant challenges coping with rising sea levels, salinisation of water supplies, and loss of wetland areas that act as natural regulators of underground water systems. As cities continue to expand, both in terms of the space they occupy and their populations, investments need to fit responsibly into such increases, accounting for social and environmental needs.
Mumbai urban slums next to high-rise developments, Creative Commons Zero - CC0
A key data source for land investments is the Land Matrix. This is an independent global land monitoring initiative that promotes transparency and accountability in decisions over large-scale land acquisitions (LSLAs) in low- and middle-income countries across the world. The Land Matrix website collates data on land deals and investors, and also produces analytical briefs exploring the data findings. For example:
- The 2021 Analytical Report III: Taking stock of the global land rush notes an overall lack of compliance of land deals to global standards and principles on responsible land investment practices over the last 10 years. It further warns of a new rush instigated by the COVID-19 pandemic.
- The 2022 report Little progress in Practice: Assessing transparency, inclusiveness and sustainability in large-scale land acquisitions in Africa measures the compliance of large-scale land acquisitions in Africa to investment principles within the VGGTs. Of 730 deals assessed, 78% showed unsatisfactory levels of VGGT uptake and implementation.
The Columbia Center on Sustainable Investment hosts the online Open Land Contracts repository. This contains publicly available investor-state contracts for land, agriculture, and forestry projects, covering 1,572 documents over 64 countries.
Global Forest Watch provides information and alerts about the status of forested areas. It’s online global map includes layers of data on land use for commodities (such as logging, mining and oil palm), and infrastructure (such as major dams).
The Extractive Industries Transparency Initiative (EITI) provides open data on countries that have implemented its global standard, along with corresponding corporate information on activities and revenue concerning the extraction of oil, gas and mineral resources.
 The International Institute for Environment and Development (IIED) has conducted several important pieces of research and analysis looking at linkages between investment policy and land rights. For example, recent work looks at the interface of land rights with investment treaties, or this blog concerning agribusiness plantations in Ghana.
Disclaimer: The data displayed on the Land Portal is provided by third parties indicated as the data source or as the data provider. The Land Portal team is constantly working to ensure the highest possible standard of data quality and accuracy, yet the data is by its nature approximate and will contain some inaccuracies. The data may contain errors introduced by the data provider(s) and/or by the Land Portal team. In addition, this page allows you to compare data from different sources, but not all indicators are necessarily statistically comparable. The Land Portal Foundation (A) expressly disclaims the accuracy, adequacy, or completeness of any data and (B) shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. Neither the Land Portal Foundation nor any of its data providers will be liable for any damages relating to your use of the data provided herein.