As seen on The Guardian 

By Oliver Balch

Globally, over 70% of land lacks clear registration or is subject to ownership disputes. This phenomenon directly increases the vulnerability of the world’s poorest, as development agencies such as theWorld Bank now widely recognise.

Liberia’s emerging palm oil industry provides a case in point. Golden Veroleum, one of the sector’s largest foreign investors, stands accused of intimidating local landowners and trampling on communal property rights. In response, the firm says all its concessions comply with government rules, “thereby recognising the communities’ customary stake”.

Lack of legal clarity over land ownership is a “recipe for conflict and chaos”, says environmentalist Fred Pearce, author of The Landgrabbers. “Even if a company has got a piece of paper entitled to the land, it may turn out that somebody has competing rights and also has a piece of paper or at least a legal claim,” he says.

Yet most companies prefer to bury their heads in the sand. That’s partly because of precedent, says Ben Bowie, a partner at TMP Systems (the trading name of the Munden Project). Weak local governance and government collusion mean that the repercussions of ignoring competing land claims are considered “tolerable” by business.

That is slowly changing, Bowie argues. In the future, for example, the human rights group First Peoples Worldwide predicts that up to 60% of future activities by US extractive companies will occur on land occupied by indigenous people – thus pushing the issue up the agenda.

Even so, the pervasiveness of the problem, the difficulty of quantifying associated risks and the apparent lack of solutions all combine to conspire against the private sector taking concerted action. “[Business] people have seen it as a risk that they can’t deal with so they’ve just ignored it,” says Bowie.

It is significant, therefore, that next week a cross-sector group including brands such as Coca-Cola, Unilever and Nestlé is due to release a set of practical guidelines to help companies implement advice set by the UN-backed Food and Agriculture Organisation. The Respecting Land Rights guidelines, due to be published by the Interlaken Group, will focus primarily on land rights relating to agribusiness and plantation forestry.

In the coming months, TMP Systems is also set to release a web-based Land Diligence Toolkit designed to assist investors with assessing land tenure liabilities and risks. The work emerges out of a joint project with Norges Bank Investment Management aimed at evaluating non-financial risks.

Another company active in trying to fill the data gap around land registration is Thomson Reuters. The UK-based business information provider markets a software solution that enhances land registration processes. To date theAumentum service, which is primarily geared to help governments increase property tax receipts, has resulted in the registration of 65m parcels of land in around 20 countries.

The system, which uses satellite-mapping features to tie specific land titles to precise geographic coordinates, gives private investors confidence to buy or lease land, says Donald Peele, vice-president of international operations at Thomson Reuters. He cites the example of Liberia, where the company’s technology has been used on a USAid-support project to create a centralised archive of all the country’s land records.

Changing out-dated mindsets

Better data alone won’t reduce companies’ exposure, however. “Land tenure and land rights are only as strong as the underlying rule of law in any particular country,” notes Christopher Barlow, a spokesperson for Thomson Reuters. An effective land registry may very well strengthen a claimant’s legal case, but it won’t necessarily keep them out of court.

A more fundamental shift of mindset is needed, many land experts argue. Businesses have an unfortunate tendency to believe official assertions that unregistered land is state-owned and empty, says Andy White, coordinator of the Rights and Resources Initiative, a US non-profit. In reality, more than 90% of government lands have people living on them, according to one study [pdf].

Yet respecting communal rights is by no means impossible. Divine Chocolate, the Ghana-based Fairtrade chocolate producer, provides a stellar example of co-ownership with traditional rights holders. White cites the Finnish forestry company Stora Ense, which has established direct land use contracts with communities in southern China – albeit only after criticisms of a dubious initial deal with the government.

Elizabeth Auden Wily, an independent land tenure specialist, insists that progressive corporate engagement on land rights can provide momentum to efforts at making national property laws both clearer and more just.

Despite such reforms being in the private sector’s long-term interest, too few businesses are demanding change. “The incentive for government to change the law in the last decade has really declined,” says Wily. “And a major factor in that is the low will of business to require it.”