---------- 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)
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PO Box 52002 - 00200, Nairobi, Kenya

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