RCEP trade deal will intensify land grabbing in Asia

Rice farmers in Salavan Province, Laos. Under a proposed law, Laos will allow foreign investors to purchase land. Some groups say the law will discriminate against locals  farmer, including ethnic minorities and threaten national sovereignty. (Photo: Phil Douglis/Vientiane Times)
GRAIN | 15 July 2019 [FR]

RCEP trade deal will intensify land grabbing in Asia

The Regional Comprehensive Economic Partnership (RCEP) is a proposed mega-trade agreement that involves 10 countries of Southeast Asia and six of their trading partners.[1] If adopted, it will be the biggest trade deal in the world. RCEP will not just change rules on the export and import of goods and services; it will change how governments decide on rights to land and who has access to it. Therefore, it has the potential to increase land grabbing across Asia – already a huge problem in this region. The implications are far-reaching, with millions of farmers' and fisherfolks' livelihoods at stake in RCEP member countries where the population is struggling to feed itself.
Land is a basic necessity in agriculture. Land grabbing by foreign investors and agribusiness deprives and compromises the lives and livelihoods of small farmers and indigenous communities who are trying to sustain food production. At the same time, land concentration tends to make countries more vulnerable to fluctuating food prices, speculation and the need for imports.  
Among RCEP member countries, over 9.6 million hectares of farmland have already been transferred from rural communities to foreign corporations over the last decade.[2]The largest transfers happened in Australia, Cambodia, Indonesia and Laos. Interestingly, most of the land grabbers came from other RCEP countries. 
Companies such as the Singapore-based Wilmar and Olam, the South Korean conglomerate Daewoo or the Chinese agriculture company Beidahuang Group are among those that have acquired hundreds of thousands of hectares of farmland concessions across the RCEP region. In Cambodia and Laos, the majority of foreign farmland owners come from neighboring RCEP countries Vietnam and Thailand, followed by Chinese and South Korean conglomerates. 
Since RCEP talks began in 2012, we are also seeing the rise of e-commerce and information technologies that are attracting new corporations into farmland investing among RCEP member countries. China’s e-commerce giant Alibaba has reportedly acquired 29 dairy farms in New Zealand totaling 12,000 hectares. And the aggressive growth of indoor farming has companies from China, Japan and South Korea investing in food production in Singapore and Vietnam.[3]
The RCEP trade deal has the potential to exacerbate and escalate this trend of land grabbing. The negotiating text is secret, but according to leaks[4], RCEP proposes rules that will facilitate the transfer of lands from small food producers to big agribusiness. These provisions are found in two chapters: the investment chapter and the services chapter. Both oblige governments to remove barriers to foreign investment, including in agriculture and in service industries that revolve around food and farming. 
  • One major rule is called ‘national treatment’. Under RCEP, every country must treat the multinational corporations of other RCEP countries as if they were domestic companies. That means that, unless they make special exceptions when they sign the text, countries like Indonesia, the Philippines and Thailand which currently restrict foreigners’ ability to own farmland will no longer be able to do so. This applies as much to food retailers as it does to food producers or financial institutions investing in them.[5] In short, RCEP countries will have to open land markets to all RCEP-based investors without restriction – and it is clear these investors have an appetite to acquire land. 
  • Both chapters also contain ‘standstill’ and ‘ratchet’ clauses. That means that governments have to freeze their current levels of market opening, and if they liberalise more they cannot go back.[6] In the past decade, RCEP countries like Laos and Japan have adopted a raft of legislative changes to remove protections on farmland that small farmers and indigenous communities traditionally enjoyed, exposing them to the takeover of their lands for large-scale corporate farming.[7]
  • RCEP’s investment chapter includes the very controversial ‘investor-state dispute settlement’ mechanism. This will give companies from the RCEP region the right to sue governments where they invest at private arbitration tribunals if their expected profits are hindered by government actions.[8] This could readily apply to agribusiness and food service industries.
Call to action
Civil society organisations across RCEP member countries are very concerned about how this trade deal will impact food and farmers. RCEP is putting people’s livelihoods as well as their rights at risk, while aggressively providing protection and privileges to corporations. And the struggle is already threatening lives: land defenders in RCEP countries, especially India, the Philippines and Myanmar, are being harassed and killed, mostly in struggles against agribusiness companies.[9]
In this context and with so much at stake, we must demand:
  • RCEP negotiators must make the full text available to the public for informed public debate, which is urgently needed about this proposed trade deal.
  • Any risk that small farmers’ and indigenous communities’ will lose rights to farmland and control over their territories must be a cause to reject RCEP. 
  • RCEP member governments must have the freedom to restrict investors’ rights to farmland.

What can we do?

Going further

[1] The South East Asian countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. Their trading partners are Australia, China, Japan, India, New Zealand and South Korea.
[2] GRAIN, June 2016, ‘The global farmland grab in 2016: how big, how bad?’, https://www.grain.org/en/article/5492-the-global-farmland-grab-in-2016-how-big-how-bad
[3] NZ Farmer, March 2018, ‘Alibaba-related company rolls out more NZ milk offerings to online savvy Chinese’, https://www.farmlandgrab.org/post/view/27972 and Son Ji-hyoung, ‘Indoor farming expert says Korea, Japan need to up investment’, Korea Herald, November 2017, https://www.farmlandgrab.org/post/view/27681
[4] Existing RCEP leak texts can be found here https://bilaterals.org/rcep-leaks.
[5] ‘RCEP draft investment text, article XX National Treatment’, October 2015, https://www.bilaterals.org/?rcep-draft-chapter-on-investment and ‘Chapter on trade in services in the Regional Comprehensive Economic Partnership, article XX National Treatment’, August 2015, https://www.bilaterals.org/IMG/pdf/services_consolidated_text_-_5aug2015-2.pdf
[6] ‘RCEP - trade in services chapter: proposal for a ratchet’, August 2015, https://www.bilaterals.org/?rcep-services-chapter-proposal-for and RCEP draft investment text, article XX on reservation/non-conforming measures, October 2015, https://www.bilaterals.org/?rcep-draft-chapter-on-investment
[7] GRAIN, April 2015, ‘Asia's agrarian reform in reverse: laws taking land out of small farmers' hands’, https://www.grain.org/en/article/5195-asia-s-agrarian-reform-in-reverse-laws-taking-land-out-of-small-farmers-hands
[8] ‘RCEP draft investment text, article XX Investor State Dispute Settlement’, October 2015, https://www.bilaterals.org/?rcep-draft-chapter-on-investment
[9] Global Witness, 2017, ‘At what cost? Irresponsible business and the murder of land and environmental defenders in 2017’, https://www.globalwitness.org/en/campaigns/environmental-activists/at-what-cost/
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