04
AUG
2014

Land Rights and Business

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FarmingAfricaAs international companies continue to expand into developing markets, a range of human rights issues present themselves when those companies interact with local communities. One of the prevalent problems facing businesses large and small is the sometimes unintended consequence emerging from the physical development –  misuse of land.

The western notion of land use includes the commonly held view that land can be owned by the individual or some other legal entity and that land has value that can be traded. But this view is largely unknown in many parts of the world where traditional notions of land and its relationship to people and communities is one in which it has a spiritual, physical, social and cultural connection, a foreign concept to western notions of ownership. As the global economy continues to expand and businesses seek opportunities for growth, there is an unavoidable conflict between these two notions of land and property ownership.

Companies and investors seeking new opportunities in Africa, Asia and elsewhere face potential risks of encountering conflicts with local communities displaced by land reallocated to maximize its use: Factories are built, mines are opened and seemingly fallow agricultural land is reallocated to agribusinesses. For many businesses operating in these environments, their involvement in land use is often taking place long after the property has been taken from local communities by a national or regional government and companies are seemingly caught off-guard by locals enraged by the injustices that have befallen them.

Herein lies the rub.

In their article, Land Rights and International Law, Wickeri and Kalhan note that “[i]n rural areas in particular, the realization of the right to food is intimately tied to the availability of land on which to grow crops. Additional rights, including the right to water, the right to health and the right to work, are all tied to access to land. Identity, particularly for indigenous groups, is also tied to land. In some domestic contexts, recognition of citizenship is also attached to ownership of land, limiting the ability of landless individuals to travel and participate in the political process.”

Faced with the seemingly intractable problem of its business obligations to host states, partners and other business stakeholders versus its obligations to local people and communities affected by business development, businesses take what at first glance is the path of least resistance and move forward with planned business activities in many instances. However, in an increasing number of cases, a variety of risks reveal themselves to their peril. For example, it is not uncommon to hear of mining and energy projects delayed by social unrest arising out of land disputes, sometimes costing companies millions of dollars a day in lost earnings.

Today, an increasing number of companies are recognizing that non-technical or non-operational risks can pose as great a danger to the business venture as financial risks from the project or host country. But in order to effectively anticipate these risks, companies must undertake the necessary due diligence so as to account for the potential human rights implications. To do this, a rights-based assessment of  potential problems should be undertaken at the earliest possible time starting with the right to water, housing and the right to work. In addition, the rights of indigenous peoples needs to be addressed during the project start up phase when land rights are at risk.

An assessment of land tenure issues is not simply a desk-based exercise but a comprehensive evaluation and field investigation into all possible land-related issues. Such a thorough and ongoing evaluation sets the stage for appropriate remedies that address the potential or actual harms suffered by local stakeholders. As the UN Guiding Principles on Business and Human Rights evolve into customary international law, companies face increasing peril should they choose to ignore this reality.

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