RED FLAG # 12

Land use in countries in which ownership is often contested or records are unreliable or land users such as indigenous groups are unrecognized.

For Example

Relying on land use – including for extractive projects, the provision of commodities, or construction – in locations where:

  • Indigenous peoples have traditional ownership or useof land
  • ethnic/minority groups have historically been denied or dispossessed of formal land ownership rights
  • women may not have access to legal land ownership
  • owners of land may have been otherwise dispossessed or moved without consultation or adequate compensation
Higher-Risk Sectors
  • Large-scale infrastructure (e.g. ports, roads, urban development)
  • Telecommunications (e.g. phone and transmission lines; masts and towers)
  • Energy (e.g. dams, wind farms, power plants)
  • Extractives (e.g. mines, oil and gas installations, pipelines)
  • Forestry (e.g. timber extraction, pulp and paper)
  • Industrial farming (e.g. crops, livestock, irrigation projects,)
  • Tourism (e.g. resort areas)
Questions for Leaders
  • How does the company confirm that the land acquisitions or use rights granted in higher risk geographies do not in fact infringe legal or traditional ownership or use rights?
  • How does the company ensure that it does not participate in or benefit from improper forced relocations, and adequately compensates inhabitants in voluntary relocations?
  • How does the company ensure that potentially impacted communities have access to safe and effective ways to raise land- related concerns with the company?

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Understanding Risks and Opportunities

Risks to People
Risks to the Business

Operational, Reputational and Financial Risks: Research shows that company-community conflicts may generate the same broad impacts on companies as technical problems, contractual or regulatory disputes, or environmental or safety breakdowns, although they typically do not receive equivalent attention or resources. Protests, blockades, property damage, public campaigns can lead to increased staff time on crisis management, lost productivity and value, work stoppages, project suspension or abandonment, that all increase costs for the business, including through the loss of future opportunities. For a world-class mining project, community conflict will cost roughly US$20 million per week of delayed production.

Legal and Regulatory Risks: Companies acquiring or using land that results in communities getting displaced expose themselves to lawsuits and formal complaints. For example:

What the UN guiding principles say

*For an explanation of how companies can be involved in human rights impacts, and their related responsibilities, see here.

A company may contribute to negative impacts where it acquires land from a State or a third party in circumstances in which it is, or should be, aware that there may be competing claims to the land and does not conduct proper due diligence to investigate land ownership and consult with affected groups. It may also contribute to impacts where it makes it more difficult or impossible for the rightful owners to access and benefit from the acquired land.

A company may cause impacts where it fails to conduct resettlement processes in line with human rights standards and due process, including the use of excessive force to remove people from land it has acquired. It could also cause negative impacts on people’s human rights where it fails to provide adequate remedy for any damage to land, property, water access and quality, or land-based livelihoods resulting from its activities.

Companies downstream of land usage in their supply chain may be linked to land-related impacts by way of their products or services. For example, a company in the food and beverage industry that purchases agricultural commodities through a food processing company, or directly from a sugar grower or other agricultural company, may be linked to land related abuses occurring at source. Moreover, linkage may occur when a company acquires or uses disputed land despite having taken reasonable measures to verify that the land titles were fully legitimate and not the result of dispossession or any other type of denial of ownership by rightful communities.

In cases of linkage, once the company becomes aware of the claims, it may move into a situation of contribution over time if it takes no action to investigate and/or address the impact.

 

Possible Contributions to the SDGs

According to the Voluntary Guidelines on the Governance of Tenure, published by the UN FAO, securing land tenure rights and ensuring responsible land governance is key to achieving the SDGs. Addressing impacts to people associated with this red flag can contribute to, inter alia:

SDG 1: End poverty in all its forms everywhere, in particular: Target 1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

SDG 2: End hunger, achieve food security and improved nutrition, and promote sustainable agriculture, in particular Target 2.3 By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment

SDG 5: Achieve gender equality and empower all women and girls, in particular Target 5.a.1. Proportion of total agricultural population with ownership or secure rights over agricultural land, by sex; (b) Share of women among owners or rights-bearers of agricultural land, by type of tenure. Target 5.a.2. Proportion of countries where the legal framework (including customary law) guarantees women’s equal rights to land ownership and/or control.

Taking Action

Due Diligente Lines of Inquiry

Due Diligence Lines of Inquiry adapted from the Danish Institute for Human Rights’ Human Rights Compliance Assessment Quick Check.

  • Are the State policies and laws that ensure tenure rights non-discriminatory and gender sensitive? Does the State ensure equal tenure rights for women and men, including the right to inherit and pass on these rights?
  • Does the State recognize as indigenous any groups that claim indigenous status and does it recognize indigenous people’s rights with regard to land, as set out in the Declaration on the Rights of Indigenous peoples?
  • Before purchasing land, did we investigate all existing claims and conflicts and consult with all affected parties, including both legal and customary owners, and if indigenous peoples are involved, did we obtain their free, prior and informed consent?
  • Considering that government maps do not always accurately reflect the traditional land usage of indigenous peoples, are we verifying this information, such as with the help of a person with deep expertise in and understanding of indigenous cultures and local tenure arrangements?
  • When purchasing or leasing property from governments or large- scale land owners, did we investigate past occupation of the land to ensure that no forced relocations had been performed, unless done in conformity with international standards?
  • Do we conduct due diligence with regard to the ownership and usage of land from which we derive key commodities or services through our supply chain, where such land is in regions with weak protections for traditional land rights or a history of land- related conflicts?
  • Do we ensure that we do not participate in or benefit from improper forced relocations, and that we adequately compensate inhabitants involved in voluntary relocations?
  • Does the company honor the rights of local or indigenous peoples on company-controlled land?
  • Are our employees and security personnel trained to interact appropriately with indigenous and other local communities, allowing safe and unimpeded use of the land and its resources without harassment or intimidation?
  • Do we have on-going processes in place to engage with local communities in order to understand any land-related impacts that may arise from our activities? Are we confident that local communities – women as well as men – feel able to raise issues with the company as part of those dialogues?
  • Does the company have a broader community engagement or indigenous people’s policy and process, which includes the principle of Free, Prior and Informed Consent?
  • Do we have processes in place to integrate issues raised by communities into company decision-making in a timely fashion?
  • Does the State provide access to impartial and competent judicial and administrative bodies to resolve disputes over tenure rights, including effective remedies where appropriate?
  • Do we have mechanisms for hearing, processing, and settling any grievances of local communities? How confident are we that communities trust those mechanisms and feel able to use them in practice?
Mitigation Examples

*Mitigation examples are current or historical examples for reference, but do not offer insight into their relative maturity or effectiveness.

  • There are a growing number of examples of multi- stakeholder collaboration to tackle systemic risks related to land. For example, Illovo Sugar Africa, the largest sugar producer in Africa and subsidiary of AB Sugar in the UK, has come together with NGOs, governments and global donors to improve land tenure rights in the countries where it operates. The Maragra project, based around a plantation in Mozambique, targeted about 1,600 farmers to “make them more aware of their rights under Mozambique’s land laws; recorded the rights of smallholder farmers through a process of community land mapping; and created a robust grievance mechanism for farmers and the local community.”
  • B2 Gold identified resettlement is a salient issue at its Fekola mine in Mali, specifically the potential for lost access or rights to land, or disruption to livelihoods. It developed a Resettlement Action Plan (RAP) and a resettlement-specific ESIA. The company established a community grievance mechanism with appeal available to a multi-stakeholder Resettlement Committee and further appeal to regional government development committee. The option to pursue the complaint through the formal legal system was available to complainants throughout. B2Gold reported that themechanism allowed it to “adjust and improve its approach throughout the resettlement process.”
  • Establishing conflict resolution mechanisms and properly addressing competing claims to the land can help counter- balance the often unfair or inadequate procedures that allow commercial interests or the local privileged to prevent community land claims from being formalized.
  • Instead of or in addition to social investments in schools and/or health facilities, “practitioners are stressing the importance of an “intelligent” community relations spend that focuses on hiring the right staff who are committed to building the kinds of relationships with local communities that prevent and mitigate the risk of conflict.” (See Costs of Conflict and Getting it Right: Making Corporate-Community Relations Work).
  • ‘Front-end loading’ a budget for community relations to help address social risks provides an opportunity for the community relations function to influence the risk picture of the project as a whole.” (Also see Costs of Conflict).
Alternative Models
  • Some of the alternative models that companies have explored are joint land ownership between communities and companies, as well as options for combining lease and profit-sharing. Land management contracts that prioritize profit-sharing may be an improvement on flat-rate leases. Outgrower arrangements can function as a method of compensation or an alternative to outright land purchase or lease; Landesa offers various resources including a review of best practices literature.
  • Land-based joint-ventures may encourage entry into more competitive commercial agriculture by disadvantaged smallholders and community landowners. However, strong support is needed to ensure their capacity to make business decisions and realize sufficiently near-term returns or livelihood benefits. Canada offers several examples of joint ventures between First Nations businesses and logging companies. See this guide on benefit sharing agreements written for indigenous peoples, businesses and governments.
Other Tools and resources

Guidance for Companies

Key Standards

Other Useful Materials