Foreign energy policy fuels famine in Africa
2011-12-08, Issue 562
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PAMBAZUKA NEWS: Following your last set of reports, Oakland was looking to understand in greater depth the legal, social and economic implications of land grabs, in particular better data on land availability, better understanding of land deals, and issues around land rights. You have carried out detailed studies on a number of countries in Africa: What do they tell us about common themes related to land acquisitions in these countries that we didn't already know? And are there any important differences between the countries studied that would inform any response to these deals?
OAKLAND INSTITUTE: The new set of research informs us of the following common themes:
First, energy policies of rich countries play a key role in the current trend of land grabbing:
The trend of converting fertile African land to agrofuel plantations is accelerating as more governments and corporations promote agrofuels as a solution to climate change and dependency on fossil fuels. The United States and the European Union, for example, have set targets to replace 30 percent and 10 percent, respectively, of their gasoline with agrofuels. They both provide subsidies to the agrofuel industry so that these targets can be met: The US government gives US$6 billion a year in federal tax credits to fuel blenders to support ethanol production, and recent European subsidies supporting agrofuel production have topped US$4 billion per year. Corporations such as Europe's largest airlines – including Lufthansa – are also increasing their reliance on agrofuels purchased from African countries. This growing market for agrofuels has set off a chain reaction of land grabs in Africa that are displacing people from their homes, draining rivers to the point of extinction and replacing valuable food crops with industrial fuel crops.
Second, so-called solutions to climate change, including carbon trade and carbon credits are green-washing the land grabs that some companies are making through land intensive Clean Development Mechanism (CDM) projects:
For example, a Norwegian timber company, Green Resources Ltd., plans to replace almost 7,000 hectares of natural Tanzanian grassland with monocultures of pine and eucalyptus that the company would grow to obtain carbon credits to sell to the government of Norway. In Sierra Leone SLGreen Oil has acquired 40,468 hectares for biodiesel production that will generate carbon credits through the CDM. Canadian corporation Sierra Gold has obtained 45,527 hectares of forest and grasslands destined for carbon credit programs, including a land-use CDM project that is expected to be worth more than US$714 million over 50 years. With one hectare being approximately the size of a football field, this accounts for a lot of land. The expansion of the carbon credit system will generate billions of dollars in profits through the commodification of air and forests, but is likely to turn into a disaster for indigenous and forest dependent communities in Africa who are losing their rights over grazing land and forests, which are essential elements of their livelihoods.
Third, international development agencies are playing a key role:
So-called 'socially responsible' or 'ethical' investment funds, backed by several western governments, involved with land grabs in Africa. The trend of large-scale land investment in Sub-Saharan Africa could not take place without World Bank Group support. The Oakland Institute's research uncovers World Bank Group's orchestration of a business-friendly environment for investor access to land. From helping attract investors, to shaping policy and law that allows for streamlined and lucrative investor contracts, World Bank Group's agencies – including its private-sector arm, the International Finance Corporation, in conjunction with the Foreign Investment Advisory Service – clearly enable and promote land investment.
PAMBAZUKA NEWS: A sobering point that you make is that there is 'no going back once the damage is done' - once people have been moved off land or virgin forests and grasslands cleared to make way for agroforestry or agrofuel plantations, irreversible damage is caused to human and ecological communities - and the atmosphere. This means we need to take preventative measures rather than hoping we can reverse actions in the future. What mechanisms are open to Africans to take a stand against land grabs, when investment in agrofuels is being encouraged even at the African Union Level?
OAKLAND INSTITUTE: First of all, given the general secrecy surrounding most deals, we have seen over the past few months how important it was to expose land deals and inform communities about what was happening.
For instance, in June 2011 OI released a brief on a land deal in South Sudan and made the contract available. Signed in 2008 with the Texas-based firm NTD, the 49-year land lease of 600,000 hectares for US$25,000 includes unencumbered rights to exploit all natural resources in the leased land. Local communities did not know about this deal until they heard media coverage of the OI report on the local radio, and it is only then, in July 2011, that they started to mobilise against the project.
Similarly, OI’s brief on the giant agricultural enterprise being developed in Tanzania and known as the AgriSol deal, informed civil society groups and media about this land investment. Knowledge of this deal, which was being secretly negotiated between US investors and the Tanzanian Prime Minister, has mobilised media and civil society groups locally and internationally, and the matter is now being debated intensely in Parliament.
To state the obvious, in an ideal world, communities should be aware of the deals prior to the signature of contracts between governments and foreign investors. Ideally an Environmental and Social Impact Assessment (ESIA) study should be conducted in a systematic way, i.e. for every large investment, and its results communicated to all those concerned. Ideally communities should be consulted on that basis, so people can make informed decisions about their land and their future. Unfortunately, our analysis of over 50 deals in seven countries show that in most cases people are not consulted, or ESIA are generally not conducted, and when they are, they are not made public.
Proper information and consultation of communities is therefore critical. But it is far from enough: One should not just rely on local communities to take action for the land where they live. What is urgent is for citizens, civil society organisations, farmer groups, parliaments and political parties to engage with governments and challenge them not just on individual land deals but more broadly on the very policy choices they are making in regards to land investment and agricultural development.
This is what happened in Mozambique where different problems with foreign investors led to a freeze in large land concessions in 2009 (this governmental freeze on land grabs lasted two years, but large-scale investments have resumed in October 2011). In Tanzania too, the government has actually taken into consideration the interests of the people: some land deals were revised or cancelled because individual ministries weighed the interests of investors against the current and future land needs of the Tanzanians. Moreover, several of the large-scale investors identified did not obtain the amount of land they requested from the government – for instance the UK firm Sun Biofuels requested 18,000 ha but only obtained 8,200 ha from the government.
At international level, citizens and civil society organisations must also question the development and energy policies pursued by rich countries. Many of them are encouraging land grabs through these policies and through the direct support they provide to investors. Furthermore, as seen in Mozambique, USAID has been pushing hard to privatise land and to make it available to foreign interest.
PAMBAZUKA NEWS: In your study of 50 deals in seven countries, you've found no evidence for fair financial returns to countries or their people. And not only do agrofuels plantations displace food crops, they also need twice as much water. Weighing the lack of economic benefits against the social and environmental costs, it's irrational for countries to make deals with investors. What's driving this destructive behaviour? Why are governments so willing to accept poor deals from investors?
OAKLAND INSTITUTE: Many African governments fervently encourage foreign investment in agricultural land and often offer what some investors have called ‘mouthwatering’ incentives. Some officials seem to genuinely trust that land deals will spur growth with incoming capital, assist with infrastructure, and create employment for local people. This belief that large-scale land investment will result in much needed economic development has been strongly promoted by white-collar experts from the World Bank and officials from donor countries.
The trend of large-scale land investment in Africa could not take place without the work of the World Bank over the past two decades, which has been orchestrating the establishment of business-friendly environments for investor access to land. From helping attract investors, to shaping policy and law that allows for streamlined and lucrative investor contracts, the World Bank has clearly played a key role to enable and promote land investment.
Investors also make bold promises of economic development, ‘modernisation’ and numerous jobs. AgriSol Energy Tanzania LLC, for instance, claims they will transform Tanzania into a ‘regional agricultural powerhouse’ using genetically modified crops and other technologies to increase yields.
But not all African leaders are under pressure from rich countries or are being misled by foreign experts. While OI hasn’t documented cases of corruption related to land deals, we have identified a number of instances of collusion between government officials and foreign firms. For example, the AgriSol project in Tanzania employs several former Ministers, including one, Lawrence Masha, who, while Minister of Home Affairs, has ensured that the targeted land will be cleared of its inhabitants. In Sierra Leone, Franklyn Kargbo, the head of a legal firm involved in several land deals was appointed Minister of Justice and Attorney General, with a key role in the development of land leases and the responsibility of the ongoing land reform process.
Such conflicts of interest should not be so surprising given the money involved in land deals: Some investments are expected to provide hundreds of millions of dollars of net profit per year to the investors. We therefore believe at OI that citizens and the justice system in Africa should exercise the highest scrutiny over the land deals that are negotiated by their governments, especially when such deals involve large fiscal incentives and little direct public revenue, as seen in many cases studied by the Institute.
PAMBAZUKA NEWS: There have been a number of reports saying that the carbon markets have collapsed. Is the proportion of land grabs driven by carbon speculation significant enough that land acquisitions could start to decrease or slow? Or is this simply, as you call it, a 'green cover' for land grabs, in the way that proselytising and 'civilising' missions provided cover for land grabs in Africa in the 19th century?
OAKLAND INSTITUTE: Carbon markets are only one of the drivers of land grabs in Africa. So far it seems to have been less determinant in the recent increase in land investments than the promises for high returns from timber, food, and agrofuels plantations. In particular, agrofuels, produced on a large scale by agribusinesses and promoted by many governments and institutions as a solution to the world’s dependence on fossil fuels, have become a driver of land grabs in Africa. The developed world’s demand for agrofuels is being stimulated by the United States and the European Union which have set targets to replace 30 per cent and 10 per cent, respectively, of their gasoline with agrofuels. US Secretary of Energy Steven Chu has stated that the American investment in agrofuels is designed to ‘end [our] dependence on foreign oil and address the climate crisis.’ It is estimated that the European Union target may result in seven million hectares to be used for the production of agrofuels.
Policymakers and the bioenergy industry have promoted agrofuels as a sustainable clean energy source. However, agrofuels are neither sustainable nor low-carbon. Agrofuel crop monocultures require large amounts of water, nutrients, and pesticides, and most agrofuel refineries and transportation methods still rely on oil and coal. In addition, agrofuel can be processed into biodiesel, which fuels the same standard diesel engines whose emissions contribute to climate change.
PAMBAZUKA NEWS: With COP17 currently taking place in Durban, there is a strong focus on climate change and the environment. What impact will land deals have on the ability of communities and countries to deal with climate change?
OAKLAND INSTITUTE: Taking over water, forest land, and other natural resources, current investments are transforming the African agricultural landscape into large monocultures while undermining the capacity of resilience and the traditional coping mechanisms of local populations. This is particularly obvious for pastoralists, practicing semi-nomadic livestock herding. Pastoralists do not have any formal title over the land they use, and their pastures are being eroded year after year, reducing their ability to cope with drought years.
OI research in Tanzania shows for instance that the Maasai have lost critical land that they used for seasonal grazing or access to water sources for their cattle. Current construction of dams and large-scale irrigation schemes for sugar cane plantations in Ethiopia are about to take over hundreds of thousands of hectares of pastures used by the agropastoralists populations in the South Omo Valley and around the Turkana Lake.
It is safe to say that the establishment of plantations and large scale irrigation schemes reduces the amounts of water available for farming and the availability of pastures, which will make the effects of climate change, especially droughts, far worse in the future. Furthermore, the loss of forests and the development of monocropping will increase erosion and land degradation, which will in turn, make the effects of climatic shocks, droughts and floods, more dramatic in the future.
PAMBAZUKA NEWS: Given all the evidence to suggest the major role industrial agriculture plays in swelling the GHG emissions which exacerbate climate change, why is the World Bank so set on exporting these harmful techniques to Africa? And why have the EU and US retained targets for increasing their dependence on biofuels despite evidence that they increase, rather than reduce carbon emissions?
OAKLAND INSTITUTE: Whereas rich countries have declared the development of agrofuels as a priority in order to fight climate change, it seems obvious that a more significant reason is to reduce the dependency of the so-called ‘developed’ world over fossil fuels. The reduction of carbon emissions thus seems to be only a secondary objective for these countries.
PAMBAZUKA NEWS: In 2009, Mozambique stopped large-scale land acquisitions, but in 2011 this moratorium was lifted and large-scale acquisitions continued. What measures, if any, have been put in place during the period between 2009 and 2011 to protect small-scale land users from being pushed off their land? Will these measures be effective?
OAKLAND INSTITUTE: Some genuinely believe, like the current Ethiopian government, seem to have decided that whole segments of their population, especially indigenous groups and pastoralists communities, don’t matter. As a result, as seen in Gambella and South Omo region of Ethiopia, people’s land is taken away by force to make it available to investors for the development of large scale plantations.
The World Bank Group describes the exchange between developing countries and foreign investors as having enormous potential – a ‘win-win’ situation – and over the past two decades, has established a host of pro-investment structures in African countries to promote private sector development, improve countries’ investment climates, and remove barriers to foreign investment in agriculture and other sectors.
PAMBAZUKA NEWS: South Sudan's transition to a newly independent state has made it especially vulnerable to land acquisitions. Can you explain how large companies and international financial institutions have taken advantage of this situation?
OAKLAND INSTITUTE: Legacies of conflict have left a South Sudanese state that is weak and unable to effectively extend its control into rural areas and lacks a regulatory framework for managing an influx of investment. At the same time, cash strapped new government is supporting land investments, believing that large-scale projects are the quickest way to improve food security and bring in the necessary revenues. As a result, as long as the agreement has a gloss of legality, the companies can claim that they have obtained leasehold rights. 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. In many respects, investments in postwar South Sudan are managed like those during the war: If you have the political and military clout, anything is possible.
This situation is compounded by international financial institutions (IFIs) and donor countries who are 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 above-mentioned concerns.
PAMBAZUKA NEWS: You looked extensively at the 325,000 ha AgriSol project in Tanzania, that will rely on the relocation of 162,000 people. In terms of the structure of the deal (price per hectare, length of lease, corporate tax, other incentives), please describe how this shows the way in which these deals are structured in favour of large agribusinesses?
OAKLAND INSTITUTE: While claiming to benefit Tanzanians and contributing to the country’s food needs, promoting livelihoods of small holder farmers, AgriSol’s internal documents reveal its true intent and the true cost for Tanzania in promoting such foreign investments. For instance, our new Brief rebutting Agrisol’s PR campaign reveals:
- AgriSol Energy will pay Tanzania .55 cents a hectare in fees and rent for a 99 years lease.
- AgriSol’s push for ‘Strategic Investor Status’ includes its demand to receive incentives including a waiver of duties on diesel, agricultural and industrial equipment and supplies ; a 30 per cent exemption from corporate tax, production of agrofuels, and request of the government to commit and provide a timetable for the construction of a rail link for Mishamo.
- Its feasibility studies call for it to negotiate with the government for input subsidies, which for now are targeted for the smallholder Tanzanian farmers. This demand will divert scarce public resources from smallholders to large foreign investors.
- The model of ‘modern agriculture’ envisioned by Serengeti and AgriSol links crop production, livestock production, and agrofuel production through partnerships among various agribusiness conglomerates in the value chain. Its partners include Monsanto, Stine, and John Deere, among many others (as evident from the slide presentation to its investors) and the application of this model in Tanzania will basically open the country to a massive influx of the world’s largest agribusiness companies.
PAMBAZUKA NEWS: You raise an interesting point about the relationship between the structural adjustment programmes of the last three decades and current land grabs in Zambia. How have SAPs paved the way for land acquisitions to take place?
OAKLAND INSTITUTE: As evidenced in our country report, during Zambia’s economic crisis of the 1970s/80s, World Bank/IMF SAPs were forced upon Zambia in 1990s, as a condition of debt-servicing loans. These loans came attached with conditionalities including efforts to promote economic liberalisation, privatisation, and foreign investment.
This resulted in Lands Act passed by the Parliament in 1995 which facilitates investment in mining, agriculture, and tourism and with its passing, land could now be bought and sold freely like a commodity. Traditional leaders, civil society, church leaders, and other stakeholders expressed concern with the Bill, arguing it would put poor people at a disadvantage and undermine the authority of traditional leaders with regards to administration of customary land. The Lands Act combined reserve/trustland into customary land, strengthened state leasehold rights at the expense of customary rights, eased restrictions on foreign ownership of land, facilitated the conversion of land from customary to state, and removed the ability of the state to repossess undeveloped land. In 1996, the Zambia Development Agency (ZDA) was formed to be a ‘one-stop shop’ to facilitate private investment, to privatise state assets, and assist investors through various government processes while the creation of the Zambia Investment Centre (ZIC) was a requirement of the 1995 Investment Act, mandated by the WB/IMF’s PIRC II loan.
PAMBAZUKA NEWS: You mention that the World Bank’s policy glosses over critical issues of human rights, food security and human dignity, while the IFC’s ‘Performance Standards for Social and Environmental Responsibility’ lack appropriate measures on community engagement, transparency and human rights. To what extent do you think that the inclusion of such criteria would compel investors and governments to implement ‘responsible’ land acquisition deals?
OAKLAND INSTITUTE: If the World Bank was to emphasise human rights, food security, and human dignity, it would mean it would stop advocating for investor friendly climate at all costs. Its ‘doing business’ ranking would be based on the prevalence of social and environmental standards instead of the lack of such basic principles. While that might not compel investors and governments to implement responsible land acquisitions, deals, it would definitely take away the pressure that “development” agencies have over the poor country governments.
PAMBAZUKA NEWS: You’ve said in the past that decisions about how to use water and land resources in Africa for Africans should be determined by Africans through democratic processes. What examples of good practice we can build or draw on?
OAKLAND INSTITUTE: Our new research shows that unlike large-scale irrigation, a focus on efficient small-scale irrigation, sustainable agriculture and water management methods can improve the lives of local smallholders, enhance food security and prevent environmental degradation from water depletion. All over Africa, sustainable water management and smallholder irrigation schemes have led to substantial increases in crop yields.
For instance, In Zimbabwe, sustainable water management and water harvesting systems such as those established by the Zvishavane Water Resources Project have proven very effective in increasing yields, building resilience to climate shocks and improving income and food security. In Burkina Faso like in other Sahelian countries, the introduction of Soil and Water Conservation (SWC) techniques such as planting pits (i.e. zai), stone lines (i.e. bunds) and level permeable rock dams has led to enhanced productivity, economic security, population stability, enhanced biodiversity and improved water tables. With the introduction of such techniques in the 1980s, farmers achieved 50-60 percent higher yields of both millet and sorghum.
- In Mali, the establishment of the System of Rice Intensification (SRI) among smallholders in the region of Timbuktu resulted in reduced quantity of water used while rice yields increased to 9 metric tons per hectare, an increase of 50 to 100 percent over yields obtained under conventional irrigated production techniques.
- In Ghana, the production of staples such as millet and sorghum show, on average, better yields under small-scale irrigation than under large-scale irrigation. Research has showed that small-scale irrigation in Ghana contributed to 1.5 metric ton / hectare of millet compared to 0.50 metric ton / hectare under large-scale irrigation.
- In Kenya, biointensive agriculture, a low-cost agricultural technology designed for small farmers, has been shown to use 70 to 90 percent less water than conventional agriculture (due to the establishment of higher soil organic matter levels, continuous soil coverage by crops, and adequate fertility for root and plant health).
- In Lesotho, the improvement in peasants’ access to the water supply and the use of small-scale irrigation technologies, such as drip irrigation and treadle pumps have improved water conservation and the crop yields of subsistence farmers, who have been increasingly able to sell excess produce in the local market
PAMBAZUKA NEWS: What has the Oakland Institute have in store for us in the next period?
OAKLAND INSTITUTE: Stay Tuned ☺
Special Investigation Phase Two: Understanding How Land Deals Contribute to Famine and Conflict in Africa
The Role of False Climate Change Solutions
The Myth of Economic Development
The Myth of Job Creation
The Role of the World Bank Group
Eight Myths and Facts About AgriSol Energy in Tanzania
Land Grabs Leave Africa Thirsty
The Role of Development Agencies
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* The Oakland Institute is an independent policy think tank, bringing fresh ideas and bold action to the most pressing social, economic, and environmental issues of our time.
* Responses to Pambazuka’s questions were provided by Oakland Institute’s David Deng, Felix Horne, Frederic Mousseau and Anuradha Mittal.
* Please send comments to editor[at]pambazuka[dot]org or comment online at Pambazuka News.
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