Viewing cable 06VIENTIANE596, THE GREAT LAND GRAB
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DE RUEHVN #0596/01 1810610
ZNY CCCCC ZZH
P 300610Z JUN 06
FM AMEMBASSY VIENTIANE
TO RUEHC/SECSTATE WASHDC PRIORITY 0067
INFO RUEHBK/AMEMBASSY BANGKOK 6668
RUEHHI/AMEMBASSY HANOI 2687
RUEHGO/AMEMBASSY RANGOON 2138
RUEHPF/AMEMBASSY PHNOM PENH 1799
RUEHBJ/AMEMBASSY BEIJING 1986
RUEHCHI/AMCONSUL CHIANG MAI 0420
RHHMUNA/CDR USPACOM HONOLULU HI
C O N F I D E N T I A L SECTION 01 OF 03 VIENTIANE 000596
DEPARTMENT FOR EAP/MLS, DRL
E.O. 12958: DECL: 06/30/2016
TAGS: PGOV SOCI PHUM EAGR PREL LA
SUBJECT: THE GREAT LAND GRAB
REF: A. VIENTIANE 142
¶B. 05 VIENTIANE 784
Classified By: Ambassador Patricia M. Haslach, reason 1.4 (b) and (d).
¶1. (SBU) Summary: Economic development is spurring a land
grab in broad areas of the country, and the poorest Lao are
paying the price. What is feeding the frenzy is a boom in the
mining industry and in agricultural commodities, principally
rubber and eucalyptus. Foreign investment projects are
contributing to the problem; ongoing and planned
mega-projects, especially in hydropower, are forcing
villagers from their land. Those being dispossessed have
little recourse: land ownership is based more on tradition
than law, and citizens have no viable means of seeking
redress from their government. Dispossession will continue as
long as the GoL puts coddling some investors above the
welfare of its citizens. End summary.
¶2. (SBU) Laos' economic growth over the past decade has been
greatest in sectors supplying commodities to neighboring
China and Vietnam. China's search for goods and raw
materials of all kinds is fueling a revolution in agriculture
in the northern provinces, as farmers abandon subsistence
practices to produce for the market. Much the same thing is
beginning to happen in the south, where Vietnamese are
investing in coffee and rubber. The mining sector is seeing
an explosion of activity, as the mining world discovers that
Laos has untapped, and largely unexplored, mineral wealth.
Private and state-owned companies from Laos' neighbors are
also investing in hydropower, as they look to provide energy
to their own power-hungry markets.
Taking the land
¶3. (SBU) Investment in these sectors is coming at a price, as
poor rural dwellers in some areas face loss of access to, and
in some cases dispossession of, their traditional lands. A
weak land ownership system is providing a handy loophole for
investors, both foreign and domestic, wishing to put land to
more "productive" use. Nowhere is the practice more
pronounced than in the agricultural sector, where villagers
in some areas face loss of their livelihoods through the
destruction of forests as investors move in to plant rubber
and eucalyptus. The rubber boom is already affecting Laos'
far-north Luang Namtha province. Chinese investors, helped
by Lao authorities, are taking thousands of hectares of
"unused" land, much of it important resources for neighboring
ethnic minority villages, and converting it to rubber
plantations. Even some areas set aside as National
Biodiversity Conservation Areas (NBCAs) are being cleared for
rubber. The trend is mirrored in the far south, where
Vietnamese investors are clearing large tracts for rubber.
¶4. (SBU) Eucalyptus is the "next best thing" in the
agriculture industry. Two major foreign corporations, Japan's
Oji Paper Company and India's Aditya Birla Group, have
received large concessions, totaling more than 200,000
hectares in the central part of the country, for planting
pulp trees. The country director of Oji, Japan's largest
paper manufacturing company, told us Oji would rely on
district and provincial agricultural officials to designate
where the company could plant. In theory only "degraded" or
"unproductive" forest land could be used. But the director
admitted that Oji would have no influence over this process.
A Lao forestry official, echoing these remarks, said measures
of "degraded" forest were subjective, and easily manipulated:
local officials could designate as "degraded" forests that
were in fact healthy and important sources of non-timber
forest products (NTFPs) for local villagers.
¶5. (SBU) Rural villagers are also seeing the loss of land to
the mining sector. The central government doles out
concessions with little apparent consideration for
on-the-ground consequences, especially for nearby villagers.
And, as with the forest plantations, mining is taking place
on lands that are the traditional sources of NTFPs for
locals. Even Laos' two world-class mining operations,
Australian-owned Oxiana Mining and Phu Bia Mining, have
created tensions with local villagers over loss of land,
alleged destruction of ancestral graves, and polluted water
sources. The impact of Thai, Vietnamese and Chinese mines,
VIENTIANE 00000596 002 OF 003
little-regulated by the GoL, has been more profound. One
mine, the Vieng Phoukha Cole Mine in Luang Namtha, provides
an object lesson. As the mine has expanded, local villagers
have lost first their paddy land and finally their homes,
with only minimal compensation.
¶6. (SBU) The hydropower sector may have an even bigger impact
on village lands. The Nam Theun 2 project, now under
construction, is forcing the relocation of about 2,000
villagers, but at least social/environmental mitigation
measures associated with the project have ensured adequate
resettlement arrangements for these people. Other projects,
privately funded, have not contained safeguards. The planned
Nam Ngeum 2 Dam will necessitate the relocation of several
thousand villagers to distant areas like Muang Feuang
district in Vientiane province, infamous for its poor-quality
land. The experience of ethnic minority villagers displaced
from other dams built in recent years, like the Nam Mang 3 in
Vientiane province or the Houay Ho in Attapeu province,
demonstrates the government's lack of concern for the welfare
of the most vulnerable minorities forced to take up lives in
¶7. (SBU) Even urban dwellers have been impacted by government
policy aimed at making land available to investors at the
cost of pushing out the original tenants. Around 200
families, many of them members of the military and police,
face eviction from a 40-hectare plot of land bordering
Vientiane's international airport, to make way for a
Chinese-funded trade center. So far the government has made
no announced plans for where the former residents will be
resettled. If the past is a guide, they may be relegated to
Vientiane's outskirts. Hundreds of people displaced by the
construction of the Nong Chanh Park in central Vientiane
three years ago were resettled in a dusty field miles from
the city, leaving many of them bitter over the experience.
The "Boten Golden City," another Chinese investment in Luang
Namtha province, has already forced the relocation of three
long-established villages to marginal lands (reftels).
Weak laws and weak rights
¶8. (SBU) Weak land ownership laws is a major factor in this
phenomenon. Laos is one of the least-populated countries in
Southeast Asia, at 27 persons per square kilometer. Low
population density has meant that, for centuries, villages
were free to exploit nearby lands without competition.
Villagers rely heavily on nearby forests for their
livelihoods: NTFPs are a major source of food and materials
in all rural areas. But the country has never developed a
clear-cut system of land ownership. Land titles, even in the
cities, are a recent phenomenon. In rural areas they are
by-and-large non-existent. Farmers have by tradition "owned"
lands by agreement from others in the village, with fields
handed down through generations by consensus.
¶9. (SBU) The Lao government has made only weak efforts to
address the problem. Beginning in 1989, the government
undertook a program of land-forest allocation, to formalize
what had up to then been very informal arrangements of land
ownership. A 1997 Land Law furthered the process,
establishing transfer and inheritance of land and
guaranteeing rights of citizens to own and use land. Both
laws were designed in part to address concerns over
deforestation, and discouragement of swidden agriculture, a
traditional farming practice seen by the government as
contributing to forest destruction. The Australians have
tried to assist the process of providing permanent title to
land through a long-term "land titling project," aimed at
giving deeds to Lao for their property. But this project has
emphasized urban areas, and has hardly scratched the surface
of land ownership outside Vientiane and a few major cities.
¶10. (SBU) Making matters worse, Lao citizens have no way to
seek redress for loss of their land. Although the 1997 Land
Law acknowledges private ownership of land, the concept
remains foreign to most Lao officials, who regard the state
as the ultimate owner. The National Assembly in theory
provides a forum for Lao to bring their grievances; National
Assembly members hear concerns of their constituents and
bring them to the government. In practice this system breaks
down: the UN, which conducts a large project to improve the
Assembly's responsiveness, has identified constituent
services as one of the Assembly's critical shortcomings.
VIENTIANE 00000596 003 OF 003
¶11. (SBU) Ignorance and greed may be the biggest factors
working against the victims. The Lao government is keen to
attract investment dollars to meet economic growth goals,
regardless of local consequences. Anecdotally, government
officials at both the central and provincial level have a
plate of tricks to benefit from concessions, for example
selling off logs from areas designated as degraded forest.
District and provincial officials, who in the case of
plantation forests are the ones determining areas to be
planted, have unchallenged authority in their areas. Local
governments and courts in effect have the final say on
matters of land jurisdiction and often have strong incentive
to divest poor villagers of their land, both for personal and
"official" reasons. Faced with the power of the state,
villagers have no recourse but to accept their losses.
¶12. (C) Intent on giving an open door to some foreign
investors, the government has few compunctions about
trampling on its own citizens, ignoring their traditional
lands and livelihoods and utter dependence on their
environment for their survival. In the near-absence of
meaningful rule of law, those affected are at the mercy of
sometimes venal, usually uncaring, bureaucrats administering
the land use system. As Laos' reputation grows as an "easy"
place for investors in sectors like hydropower, plantation
forests and mining, more and more of Laos' poorest citizens
are likely to find themselves dispossessed of their
traditional lands. End comment.