TAINTED LANDS: CORRUPTION IN LARGE-SCALE LAND DEALS Project Briefer for 2015 UN Forum on Business and Human Rights 1. What is the scope of large-scale land deals? Recent years have unveiled a significant increase in large-scale leases or acquisitions of farmland, particularly in a small number of developing countries where governance is weak. Approximately 1,073 large-scale land deals have been completed and documented since 2000, covering in total almost 40 million hectares. 2. What is the role of corruption? The regions concerned by the recent wave of investments in farmland are those where land suitable for cultivation and water are abundant, workforce cheap, and access to the global markets relatively easy. But weak governance also facilitates such deals – a 2011 report from Oxfam noted that, “[l]and investors appear to be targeting countries with poor governance in order to maximise profit and minimise red tape . . . [O]ver three quarters of the 56 countries where land deals were agreed between 2000 and 2011 scored below average on four key governance indicators.” Studies show a significant statistical correlation between levels of perceived corruption and the likelihood of land deals. Although corruption is difficult to identify and reliably measure, it is widespread in land administration and is a major obstacle to protecting local communities from the impacts of land speculation. Corruption may play a role at four different stages: (1) in the demarcation of land and in the rolling out of titling schemes; (2) in the design of land use schemes and the identification of land as “underutilized” or “vacant”; (3) in the use of “public purpose” or “eminent domain” provisions to justify expropriation from land; and (4) in the selling out or leasing out of land to investors, by the government, or by community leaders. 3. Which initiatives have been taken so far? In May 2012, the Committee on World Food Security (CFS) adopted the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries, and Forests in the Context of National Food Security in an attempt to provide recommendations to States as to how they should ensure that access to land, particularly by small-scale farmers and herders, is sufficiently protected. The Voluntary Guidelines include a number of references to the need to address corruption in its various forms. They express the expectation that States shall “endeavour to prevent corruption in all forms, at all levels, and in all settings” (Guideline 3.1, para. 5), and they provide that “[i]mplementing agencies and judicial authorities should engage with civil society, user representatives, and the broader public to improve services and endeavour to prevent corruption through transparent processes and decisionmaking” (Guideline 5.8). Moreover, the Voluntary Guidelines make specific reference to corruption in the recording of tenure rights (Guideline 17.5), in the valuation of land (Guideline 18.5), and in the design of land planning schemes (Guideline 20.4).
Serious questions remain, however, as to the willingness and ability of States to comply with the Voluntary Guidelines. In the countries targeted by land deals, the temptation is huge for those in power both to exploit natural resources in order to create as much wealth as possible within the shortest possible time (for they do not know how long they will stay in power) and to sell off the right to exploit resources to the highest bidder (in order to immediately cash in the equivalent of all future income streams that could result from exploiting the resource). Anti-bribery instruments or initiatives that impose on the home States of investors to take measures, or set out expectations for the private sector, are therefore an important complement to the target countries' efforts. Although instruments against corruption in business transactions were taken already since the late 1970s, corruption has been a concern of the international community since the mid-1990s. The 1996 Inter-American Convention against Corruption has now been widely ratified across the Americas. In 1997, the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Convention), which is now binding on a total of 41 countries (34 OECD member countries and 7 non-member countries). The African Union adopted a Convention on Preventing and Combating Corruption in 2003, and the United Nations Convention against Corruption (UNCAC) was adopted the same year: the UNCAC entered into force on 14 December 2005 and has now been ratified by 174 countries across the globe. Other initiatives are private sector-led or the result of multistakeholder processes. Anti-corruption is included in the UN Global Compact and in the OECD Guidelines on Multinational Enterprises. Furthermore, the B20 has established a task force on this issue that has sought to accelerate the sharing of best practices in preventing and addressing corruption. The Open Government Partnership, launched in 2011 to encourage accountability and transparency, has been joined by 69 countries. It has also been suggested that an initiative such as the Extractive Industry Transparency Initiative (EITI) could be extended to land deals, since the problems posed in this area are similar to those that have traditionally arisen in the oil and minerals sectors. The report, under preparation by Professor Olivier De Schutter, the International Corporate Accountability Roundtable (ICAR), Oxfam America, and Global Witness, will dedicate specific attention to the following questions: 1. Do anti-bribery instruments reach not only public servants, but also community chiefs who may be bribed to give away the land of the communities they represent? 2. Do buyers of agricultural products and investors in agricultural production have a due diligence obligation to ensure that their suppliers or subsidiaries operating in weakly governed countries are not resorting to corruption? 3. Which best practices within companies can ensure that they shall not be involved in corruption? Can best practices, if adopted by a particular company, be a defence against accusations of practicing or of being complicit in corruption? 4. Could the financial community and its duties to prevent laundering of illegally acquired funds play a more active role in the fight against corruption? For more information on the project, please contact Sara Blackwell, ICAR’s Legal and Policy Coordinator, at sara@icar.ngo.