---------- Forwarded message ---------- From: John Ashworth <[email protected]> Date: Wed, Dec 7, 2011 at 7:19 PM Subject: [sudan-john-ashworth] Understanding land investment deals in South Sudan To: Group <[email protected]>
UNDERSTANDING LAND INVESTMENT DEALS IN AFRICA COUNTRY REPORT: SOUTH SUDAN by David Deng with support from Anuradha Mittal, Oakland Institute, December 2011 Too large a file to circulate on a Google group but available online at http://www.oaklandinstitute.org/understanding-land-investment-deals-africa-south-sudan EXECUTIVE SUMMARY On July 9, 2011, the Republic of South Sudan (RSS)became the world’s newest nation. Despite thesignificant strides that South Sudanese have madesince the signing of the Comprehensive PeaceAgreement (CPA) in 2005, South Sudan remains oneof the least developed countries in the world. In orderto meet its developmental challenges, the governmentof South Sudan has begun promoting large-scaleprivate investments as a shortcut to rapid economicdevelopment. However, recent data about the rateat which the government is leasing land to foreignand domestic companies has led some observers toquestion whether the government’s strategy can deliveron its promises. According to a recent study, in justfour years, from the start of 2007 to the end of 2010,private interests sought or secured 5.15 million hectares(ha) of land in the agriculture, biofuels, forestry, carboncredit, and ecotourism sectors—equivalent to morethan eight percent of South Sudan’s total land area.1As currently conceived, these land deals threatento undermine the land rights of rural communities,increase food insecurity, entrench poverty, and skewdevelopment patterns in South Sudan. After providing an overview of the economic, social andpolitical context, the report examines the following fourcase studies: • Nile Trading and Development: In 2008,a Texas-based company called Nile Tradingand Development obtained a 49-year lease to600,000 ha of land in Central Equatoria State,with the possibility of increasing its landholdingto one million ha. Nile Trading then enteredinto agreements with two other Texas-basedcompanies—Kinyeti Development and theAmerican Exotic Timber Group—to harvestvaluable timber in the area. Evidence suggeststhat the companies are using the agro-forestryventure as a means of advancing their oil, gas,and mining interests in South Sudan.• Commonwealth Development Corporation (CDC)and Finnish Fund for Development Cooperation(Finnfund): In 2007, the CDC and Finnfund, two governmental development funds associated with the British and Finnish governments respectively, obtained a majority interest in several forest concessions in Central Equatoria and Western Equatoria states. The company that signed the concession agreements did so without consulting either the state governments or the affected populations living in the area. In late 2010, the CDC and Finnfund reportedly sold their interest in the forest concessions to unnamed investors without the knowledge of the government or affected populations. • Al Ain National Wildlife: In 2008, an Emirati company, called Al Ain National Wildlife, entered into a 30-year agreement with the government of South Sudan to operate an ecotourism venture on 1.68 million ha of a government-owned national park. With the support of the government, the company has asked approximately 10,000 to 15,000 local residents to relocate to a new location that is at least a distance of four hours drive by car. The company had pledged to provide affected populations with a range of infrastructure developments and services prior to relocating the local population; despite having their lease for more than three years, the company has not yet delivered on its promises. • Citadel Capital and Concord Agriculture: In 2009, an Egyptian private equity firm called Citadel Capital, through one of its portfolio companies called Concord Agriculture, obtained a 25-year lease to 105,000 ha of land in Unity State through an agreement with the state-level government. According to the terms of the agreement, the company pays just USD 125,000 in annual lease payments to the state government. Despite being located on community-owned land, the affected communities have not been provided with any direct benefits under the investment agreement. The government’s support for land investments is predicated on the myth that large-scale development projects are the quickest way to improve food security and stimulate the economy in South Sudan. Evidence from land-based investments over the past six years, however, suggests that these projects are far more likely to undermine food security by dispossessing people from land and natural resources that are indispensible to their daily livelihoods. The country also lacks a regulatory framework for managing this influx of investment, reducing the likelihood that it will provide sustainable benefits to local economies. This report includes a number of key findings: First, most of the land deals fail to give due weight to the land rights of community landowners. The 2009 Land Act put in place a land administration system based on community landownership in which communities— defined mainly in terms of ethnic affiliation—own virtually all the land in the country. Even on public land, people’s long-standing relationship to their ancestral homelands, combined with the government’s failure to make active use of the land over the years, warrant heightened protections for community land rights. The transfer of such large areas of land to private interests directly undermines the establishment of a system based on community land ownership by concentrating land ownership in a small number of foreign and domestic companies. Second, contrary to conventional wisdom, the uncertainty of the transitional context is actually encouraging certain types of investment. Opportunistic companies are able to take advantage of the unclear procedures for land allocation to secure favorable deals with power brokers at the local level. This is a potential source of conflict, both directly between project proponents and affected communities, and among affected communities themselves when they are forced to compete with neighboring communities over dwindling resources. Third, the large-scale land investments that are currently underway are not complying with domestic law. Companies rarely consult with residents in affected communities, or conduct environmental and social impact assessments, as required by the 2009 Land Act. Nor do they feel pressure from government institutions to abide by “good practice” social and environmental protections. This greatly increases the risks of adverse impacts for host populations; it also increases the chances of local opposition arising when the companies come to the ground to begin project operations. Fourth, international financial institutions (IFIs) and donor countries may be compromising the sustainability of peacebuilding efforts by encouraging the government of South Sudan to make land available to foreign companies for industrial agriculture. The government of South Sudan has embarked on a campaign with a consortium of development partners, including the International Finance Corporation (IFC) and the United States Agency for International Development (USAID), to promote agricultural investment in South Sudan, despite the lack of a regulatory framework to manage the influx of investment. By prioritizing private sector interests over those of the rural poor, initiatives such as these may inadvertently undermine the new social contracts that would provide the foundation for a sustainable peace. In order to ensure that investments deliver on their lofty promises, the government of South Sudan should place limits on land-based investment until it can put in place an appropriate regulatory framework. It must also follow through on its commitments to review land leases issued during the interim period and to ensure that they comply with relevant legal standards. END______________________ John Ashworth Sudan Advisor [email protected] +254 725 926 297 (Kenya mobile) +211 919 695 362 (South Sudan mobile) +27 82 853 3556 (South Africa mobile) +44 750 304 1790 (UK/international) +88 216 4334 0735 (Thuraya satphone) PO Box 52002 - 00200, Nairobi, Kenya This is a personal e-mail address and the contents do not necessarily reflect the views of any organisation -- The content of this message does not necessarily reflect John Ashworth's views. Unless explicitly stated otherwise, John Ashworth is not the author of the content and the source is always cited. You received this message because you are subscribed to the Google Groups "sudan-john-ashworth" group. 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