Timely identification of land rights issues is better than having to address land rights problems later, after they escalate leading to conflicts that damage community relations, increase costs and undermine sustainability of the investment. Companies need to pay proper attention to land tenure issues at the investment planning stage, implying a need for improved risk assessment and due diligence.
This requires changing common approaches to due diligence used by companies and investors, moving beyond desk-based legalistic chain of title approaches to approaches that help to enable and identify the conditions required for a company to have a social license to operate. The assessment of human rights impacts and of social and governance risks related to land rights needs to be strengthened both at the financing stage, and throughout the investment cycle.
LEGEND’s thematic case study on investment planning and due diligence explains the challenges faced in three pilot projects as a result of lack of attention to land tenure when the investments were originally planned and the approaches used by partners to address them.
- "Piloting the ‘Community Land Value Chain’ in Zambezia, Mozambique" - ORAM’s work to document land rights in a forestry investment area
- "Applying the VGGT to the responsible development of a large-scale oil palm plantation in Sierra Leone" - Solidaridad’s work with a Netherlands based oil palm producer to address problems resulting from creation of a very large concession
- "From Commitment to Practice (C2P)" - Landesa’s work with Illovo Sugar to help build capacity to address land issues
Investors and companies need to take particular care to be understand land legacy issues which concern longstanding grievances and conflicts resulting from land acquisitions that took place without proper consultation or compensation and restrictions on community access to land.
- For an overview of the challenges of legacy issues for agribusiness investments in low- and middle-income countries see LEGEND’s 2016 analytical paper: Addressing legacy land issues in agribusiness investments
- Land Legacy Issues: Guidance on Corporate Responsibility, from the Interlaken Group explains the impact legacy issues can have on established investments, and how producers and investors can address historical problems fairly in their operations and in acquiring investment sites and projects.
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