As seen on India Blooms
Interlaken (Switzerland)” Sept 20 (IBNS): At least one out of every three hectares licensed for commercial exploitation in emerging market economies (EMEs) in Africa” Asia and Latin America is overlapped by indigenous community land” a report has found.
The analysis produced by The Munden Project for the advocacy group Rights and Resources Initiative” said 31% of all commercial concessions (by area) are overlapped in some way by community lands” putting at risk some $5 billion of implied agriculture production value.
The quantitative analysis found that land tenure is a statistically significant source of investment risk in emerging market economy concessions and extends across all land-dependent sectors” regardless of concession type.
The paper used Geographical Information System (GIS) mapping technology to analyze over 153 million hectares of concessions across 12 emerging market countries.
Projects ranging from agriculture and forestry to mineral extraction were analyzed in Argentina” Brazil” Cambodia” Cameroon” Chile” Colombia” Liberia” Indonesia” Malaysia” Mozambique” Peru” and Philippines.
The results quantify significant overlap between commercial concessions and indigenous community lands” identifying 3″750 overlapped concessions covering a total of 48.3 million hectares.
“The financial risk posed by insecure land tenure has not previously been examined in a systematic way”” said Lou Munden” Chief Executive Officer of The Munden Project.
“Moreover” investors and operators considering projects in EMEs do not currently incorporate it in their diligence processes. Legal” civil and sometimes violent opposition to projects can impair profitability and disadvantage local populations.
“However this increasingly common cause of disruption does not feature in the methodologies of ratings agencies or insurance companies” and is overlooked in valuation models used to examine investment risk”” Munden said.
The research was released on the eve of an international conference” held in Interlaken” Switzerland.
Co-organized by the Rights and Resources Initiative” (RRI)” the International Land Coalition (ILC)” Oxfam” Helvetas Swiss Intercooperation” and IUCN” the International Union for Conservation of Nature” the event aims to bring together government and business stakeholders involved in land investment with leaders of Indigenous Peoples and other local communities and NGOs.
Participants will seek to explore strategies to strengthen land tenure for local communities” consolidate ideas and plans to scale-up and more effectively deploy operational strategies” catalyze new collaboration and alliances” and identify next steps to take these strategies forward.
“Natural resource developers and their investors face a major challenge. Their profits—along with their ability to meet global demand—can plummet if the situation on the ground becomes unstable”” said Andy White” Coordinator of Rights and Resources Initiative (RRI).
“However” the communities that live on the lands in question face different challenges” including poverty” hunger” and encroaching development that threatens to force them from their land. The conflicts that often result are avoidable”” Whie said.
The new report aims to builds a framework for financiers and insurers of mining” agriculture” and forestry projects to evaluate land tenure risk.
Spatial data” gathered from a wide variety of public and private sources” was used to map out concession areas and community-claimed lands in the 12 countries.
Where community and concession areas overlapped” the authors calculated the financial impairment that could arise from conflict triggered by the developments.
“The first step to managing risk in any investment is to understand it. What we propose is a statistical method that identifies and quantifies the problem”” said Lou Munden.
“At present” very little data is available to investors and operators who wish to assess and manage land tenure risk” creating a highly emotive debate around the issue.
“By taking a quantitative approach that uses GIS mapping” we can start to adopt a more pragmatic approach to the avoidance of conflicts over land tenure that seldom benefit any of the parties involved”” Munden added.