Land acquisitions in sub-Saharan Africa are on the rise and investment trends are shifting, increasing the need to close tax loopholes and improve legal frameworks, a top forestry scientist says.
Historically, such transactions have been characterized by developed countries in the Northern Hemisphere investing in developing countries in the Southern Hemisphere, but increasingly they involve one southern nation investing in another — in 2012 an estimated $1.9 trillion in foreign direct investments occurred among emerging economies, according to Andrew Wardell, research director of the forests and governance portfolio with the Center for International Forestry Research (CIFOR).
“Research shows that it’s not just the BRIC countries — Brazil, Russia, India and China — snapping up land, but such players as Malaysia, Indonesia and Singapore making purchases in such countries as Ethiopia, Liberia, Nigeria, Mozambique and Gabon,” Wardell said at a side event to the recent U.N. climate talks in Warsaw, Poland. The event was intended to showcase how the rule of law can contribute to just and responsible action on climate change.
Not much emphasis has been put on regulating investment quality in the region’s forestry and agricultural land sectors, leading CIFOR researchers, in conjunction with the International Development Law Organisation (IDLO), to conduct a systematic review of framework laws, Wardell said. IDLO, which co-sponsored the side event with the Democratic Republic of Congo, helps governments and civil society to reform laws to promote peace, justice, sustainable development and economic opportunity.
“We’ve worked with law students and law faculty staff in Tanzania, Mozambique and Zambia to undertake a rigorous and systematic review of basic framework laws associated with investments, with land and the forestry, energy and agricultural sectors,” Wardell said.
Problem solving
Preliminary research findings in the three countries confirm that in many cases, investors are circumventing the law, and often negotiate with or through traditional authorities, senior government officials, parliamentarians or prominent entrepreneurs. Investments, too, come from varied sources including banks, equity and pension funds, corporations, timber management companies and individuals.
Many countries in sub-Saharan Africa have liberal investment laws and generous tax incentives, but laws governing customary land-use rights and ownership are weak. Wardell said the research aims to identify innovative legal and regulatory practices that could provide lessons learned for other countries.
“We’ve identified quite a significant number of social and environmental impacts that are often associated with these investments — often relating to the loss of access to land,” he said.
In countries where customary laws are observed, large land acquisitions take place — sometimes involving hundreds of thousands of hectares of land, which have been negotiated through direct negotiation with chiefs completely outside any existing statutory legal frameworks. Conflicting laws can create disincentives for low-carbon initiatives.
However, there are very dynamic changes happening in law, said Robert Kubugi, a lecturer in law with the Centre for Advanced Studies in Environmental Law and the School of Law in the University of Nairobi. More African countries are making changes to constitutions, governance and public administration systems, he said.
The Democratic Republic of Congo is a prime example.
In a country where 60 percent of the total land area is covered by forest, according to World Bank statistics, firewood and charcoal remain dominant sources of energy for rural and urban communities leading to an increasing rate of deforestation, Wardell said.
The country started working to protect its environment by putting renewed emphasis on forest management, establishing a new forestry code in 2002, instituting fiscal reforms of timber concessions in 2004 and undertaking a legal review in 2011.
In many cases, investors are circumventing the law when involved in large-scale land acquisitions, Wardell said, adding that examples show that Zambia and Tanzania have adopted some innovative approaches to address some of these concerns.
Zambia has introduced a two-stage process in issuing provisional leaseholds, which are subject to meeting certain performance criteria within a fixed time period. Tanzania’s innovations have included a specific Village Land Act, and the introduction of caps on the size of the leaseholds, and the duration for which leaseholds are valid.
Seeking solutions
Research results, to be published in upcoming country reports and a comparative journal article, will present ideas about what can be learned, to avoid reinventing the wheel in every country and community, said Marie-Claire Cordonnier Segger, a senior legal expert with IDLO who also provides legal advice to the United Nations and governments in Africa, Asia and the Americas about international treaties on sustainable development.
“We’ll be looking at laws and policies that help empower activities targeting people in education, policies that consider how to raise awareness of rights, access to information, public participation, policies that consider recourse for victims of impacts, how benefits can be protected and shared, regulations that consider ways of combining customary and formal justice systems, land use rules on the ground — both traditional and formal — and how they work together,” she said.
