Land rights, poverty and risky business in Asia
CSR Asia | Vol.8 Week 41 | 10 October 2012
by Michelle Brown  [email protected]

Using or acquiring land for your company can indeed be a risky business and particularly when poor communities are affected.   How companies manage the use and acquisition of land for their operations can make all the difference in terms of maintaining a social license to operate and managing reputation.

Take the case of the EcoPark in Vietnam.  In May 2012 this prestigious new development  just outside the capital of Hanoi, won an Asia Pacific Property Award recognising the best practices in the real estate sector across the world (according to Vietnam News  here ).  This website  claims that the Vietnam EcoPark represents  “perfect harmony of humans and nature”.    Clearly no one checked with local residents when handing out the awards.  Just weeks before, in April 2012, villagers were protesting the land expropriation and an estimated 2000 to 3000 police were called in to break it up with tear gas and smoke grenades in what did not appear to be ‘perfect harmony’.   This could not have been good news for the developer Vihajico nor for companies such as Savills (who are listed as the exclusive agents for phase 1) and the British University Vietnam  who were reported to be a major lessee.  Academics from around the world issued a petition to both the British University Vietnam and to Savills noting that the compensation to be paid of 6 USD/m2 and about USD 2000 per family is not enough.

In Vietnam, it is estimated that  80 percent of all complaints filed to the government are related to land disputes and recent years have seen a growing number of protests by residents who are not happy with the compensation provided.   Of course, land and potential disputes are not specific to Vietnam.

Last week Phnom Penh hosted the ‘2012 Asia Land Forum’ organised by The International Land Coalition (ILC), STAR Kampuchea and the Asian NGO Coalition (ANGOC) which brought together over 100 participants from 12 countries to discuss and build collective action on responsible land governance. The forum was supported by Oxfam’s GROW campaign .  This was around the same time that Oxfam issued a new report entitled ‘Our Land, Our Lives: Time Out on the Global Land Rush’  which focusses particularly on the purchases of agricultural land around the world which often adversely impacts the poorest and most vulnerable.  It has warned that global increases in the price of food and the value of land used for agriculture has resulted in ‘land grabs’ in developing countries.  While the research recognises that investment can have positive development impacts, Oxfam is calling on the World Bank to put a temporary freeze on investments which involve large-scale land acquisitions.

The research by Oxfam points out that as food prices continue to soar, interest in land could become even greater and that when private sector transactions are not properly managed it runs the risk of leaving the poorest and most marginalised worse off.   According to Oxfam’s calculations the “land acquired between 2000 and 2010 has the potential to feed a billion people, equivalent to the number of people who currently go to bed hungry each night”.  While this has affected Africa the most (with 30 percent of Liberia’s land sold in recent years to private investors) the research also uses case studies from Asia.  

In Cambodia it is reported that 63% of all arable land in Cambodia has been passed over to private companies.  Last May, the Premier of Cambodia halted concessions on new land to work to ensure any new investments are properly assessed, that decisions ‘do not jeopardize people’s means of livelihood' and that there can be 'real benefits to the nation and its people’ (as quoted in the Oxfam report).  Laos is reported to have announced a similar freeze.

So what is a responsible company to do?

ISO 26000 Guidance for Social Responsibility addresses land issues under Human Rights (in terms of complicity) and Fair Operating Practices (in terms of respect for property rights).  According to the  guidance, responsible organisations should make sure they are not complicit in any displacement of people from their land unless it is done in conformity with national law and international norms.  This includes exploring all alternative solutions and ensuring affected parties are provided with adequate compensation.  Organisations should make sure they have and implement policies and practices that promote respect for property rights;  ensure lawful title permitting use or disposal of property; not engage in activities that violate property rights; pay fair compensation and consider wider societal expectations.

The IFC as the private sector arm of the World Bank has a set of Performance Standards and associated Guidance Notes. Performance Standard 5 deals explicitly with land acquisition and involuntary resettlement.  Companies who are acquiring or using land for their operations or whose activities may result in physical or economic displacement of people, in addition to complying with the local laws,  should look to ensure they are managing these risks to those standards as set out in the Performance Standards.  This will include:  avoiding or at least minimising displacement, wherever feasible, by exploring alternative project designs; avoiding forced eviction; mitigating any adverse social and economic impacts from land acquisition or restrictions on land use (such as through providing compensation for loss of assets) and ensuring appropriate disclosure of information, consultation and informed participation of affected communities;  and working to improve or restore livelihoods and standards of living of anyone who is displaced.  

Oxfam’s call for a temporary freeze from any further bank financing notes that it would give space for the creation of policy and institutional protections such as: ensuring local communities have free, prior and informed consent as well as appropriate compensation; full transparency and improved land tenure governance.

It is likely we will continue to see more and more reports in the news in the Asia region regarding companies, land use and acquisition and community protests.  While this is a complex issue, working to apply best practices and international standards which includes effective engagement with surrounding communities can help companies manage this in Asia and beyond.  
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Source: CSR Asia