Global land rush: Contract transparency is crucial, but not enough

Greater transparency was a key theme at the World Bank land conference last week. Transparency is critical, but without greater accountability to local communities it is not enough.

Lorenzo Cotula's picture
Insight by 
Lorenzo Cotula
17 April 2013
Children stand on a dirt road in a village in Burkina Faso.

A village in Burkina Faso. Land investment in Africa is growing driven by rises in global food prices, companies who see market opportunities in biofuels, and overseas countries anxious to secure their food supplies through direct investment. Photo: Tex

The growing challenge of large-scale land acquisitions in developing countries has featured prominently in discussions over the past few years at the annual World Bank Conference on Land and Poverty. This year, transparency in contracting for land deals was an important theme at the conference, which attracted hundreds of development practitioners, government officials, activists and companies.
A representative from Global Witness articulated a powerful case for transparency, and discussed the “who”, the “what”, the “when” and the “how” of improved transparency in contracting processes. The head of the secretariat of the Liberia Extractive Industry Transparency Initiative shared Liberia's experience with publicly disclosing agribusiness contracts, alongside forestry and extractive industry concessions. The Land Matrix, an initiative that is shedding light on deals for which reliable information is hard to come by, was also discussed at the conference.

Much secrecy surrounds the negotiation of land deals, and improving transparency is an important battle worth fighting for. Transparency in contracting is a crucial precondition both for meaningful local deliberation and for public scrutiny of public and private sector action. Citizens have the right to know how governments manage resources on their behalf.

As I argued in this presentation scrutinising land contracts is particularly important because they reflect the ‘real deal’ beyond the promises of company and government officials. Greater transparency in the contracting process would send out a clear signal to investors and add pressure to secure fair terms for local communities.  

Grounds for optimism

Mounting pressure for greater public scrutiny provides some grounds for optimism. Several international ‘good practice’ guidelines support disclosure of contract terms unless compelling reasons require otherwise, such as the recently revised International Finance Corporation’s performance standards and the UN Principles on Responsible Contracts. The UN Food and Agriculture Organisation’s Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests call for transparency in land allocations. A new, ambitious Open Contracting initiative promotes transparency in public contracting, including land concessions. Finally, a few governments have disclosed their land contracts, including Ethiopia, while in Liberia disclosure is a legal requirement.

Legislation in the investors’ home countries can help too. In the United States, the Dodd-Frank Act of 2010 requires disclosure of payments to governments made by extractive industry companies listed on US stock exchanges, and the EU adopted comparable legislation last week. Similar arrangements requiring companies listed in richer countries to disclose their land deals overseas would go a long way towards increasing transparency — though in today's difficult economic climate, there is little political appetite for this.

Looking beyond transparency 

But greater transparency and even full contract disclosure are not enough. An investment contract comes after a decision-making and negotiation process. Public consultation is critical before the deal is made though effective community engagement in the early stages of project design. International best practice points to the principle of free, prior and informed consent. Different people have defined this principle in different ways. But a strict interpretation means that proposed investments can only go ahead if they secure the consent of local groups. It also means that such consent must be free of coercion and based on provision of adequate information. There are major challenges in making this principle work in practice, but also growing guidance and experience.

After the contract is signed, disclosure can only improve accountability if those who are affected by decisions, and the public at large, can get organised and use the information disclosed. Non-governmental or local producer organisations, parliamentarians and the media can play a particularly important role in scrutinising public action, including the contracts that a government is signing up to. Much depends on the political space, and local groups may need support when scrutinising often complex contractual arrangements.

Pathways to accountability from below

Transparency is only one piece in the complex mosaic of interventions needed to improve accountability. A recent IIED report exploring pathways to accountability  in the rush for Africa's land found that, today, citizen efforts to hold governments and companies to account are undermined by:

The report also found that people who feel wronged by large land deals are mobilising to seek justice through a wide range of strategies — from peaceful protest to court action, through to alliances with national and global players. It is this growing demand for accountability from below that holds greatest promise.

There is a need to reform the national and international legal frameworks regulating land and investment in ways that increase local control and downward accountability, and to strengthen citizens’ capacity to influence policy processes, claim their legal rights and advocate alternative visions of development.

Greater transparency is a key part of making this happen, and a critical step in the right direction. But unless these wider challenges are properly addressed, the emancipatory potential of hard-fought advances in transparency is unlikely to go far enough to make a real difference to villagers living off the land.

Read Accountability in Africa's land rush: what role for legal empowerment