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October 03, 2011

Land investment in Africa is much more than a legal matter

by Chido Makunike

London-based New Forests Company (NFC) was formed in 2004; its management’s aim being for it to become East Africa’s biggest forester, which it has achieved. As a new company in an enlightened age different from the notorious plantations that began in Africa's colonial days, it was also expected to implement a friendlier, 'win-win' model of plantation investment.

A new report by NGO Oxfam International suggests it has not met the latter expectation.  In the report The New Forests Company and its Uganda plantations, Oxfam tells of NFC's 90,000 hectare forest concessions spread across Uganda, Tanzania, Mozambique, and Rwanda. It plants and harvests timber on 27,000 hectares of of ‘underutilized and/or degraded’ land in those countries.

''The plantations contribute jobs and revenue, along with the timber products those countries need as they develop and which would otherwise be logged from natural forests.'' In line with NFC's claims of being an environmentally and socially clean ('ethical')operator, it hopes to use carbon credits as an additional revenue source, according to the Oxfam report. ''NFC runs education, health, and income-generation programmes with local communities,'' and is ''developing a system to quantify the positive social impacts'' of its interventions.

NFC is well-connected politically at all levels in the countries in which it operates, and has been able to attract investment from varied international sources. It has an overall very good pedigree. On its website, the company describes itself as a ''sustainable and socially responsible forestry company which will deliver both attractive returns to investors and significant social and environmental benefits.''

Given how contentious land is, particularly in Africa, Oxfam says in the introduction to the report, ''NFC appears, on the face of it, to be the design blueprint for how a young modern business can conduct
a major land investment in Africa in a responsible and ethical way.''

However, Oxfam alleges that despite this pretty public picture of New Forest Company, it had obtained many of its forest land parcels under dubious, controversial circumstances, some of them almost reminiscent of old style colonial land grabs of decades ago.

Asks Oxfam, ''Given all this, how is it possible that thousands of people in affected communities have
alleged that land clearances, which have taken place to make way for NFC’s operations in Uganda, have been accompanied by distress and violence, and have left many in a state of poverty?''

The Oxfam report then goes on to catalogue examples of an estimated 22,500 people who are said to have been forcibly removed from their land by Uganda's National Forestry Authority (NFA) to make way for NFC. These people were declared to have been ‘illegal encroachers’ on the land.

NFC staff are accused of taking part in evictions, although the organization denies this, stating that relocations were 'voluntary' and in any case only the responsibility of a government body, the NFA. NFC does admit evictions took place to make room for it, but that the number of those affected was no more than 15,000. and that its staff were only on hand 'to observe the eviction process' by the Ugandan NFA.

Evictees claim that the evictions were often violent, and have left them landless and impoverished. Among their complaints are the lack of consultation, lack of alternative land and inadequate compensation.

Most of these are not people with legal title to the land. As all over Africa, most peoples' claim of occupancy  of land is according to 'traditional' norms which predate the colonial-era introduction of central governments, western law and title deeds. The continuing, still not fully resolved conflicts between the two clashing systems is one reason almost every African countries has latent 'land issues,' some more obvious than others. In all countries the two systems co-exist and operate side by side, but increasingly, as in this case, they clash.

Central government may now be the legal title holder of land such as in dispute in the NFC case, but that is not to say that it is easy, straightforward or without consequence for that ownership right to be exercised over communities that can sometimes trace their ancestry on those lands back centuries; long before modern governments like Uganda's came onto the scene. How do you weigh government's present-day legal ownership of that land against the 'traditional' occupation of it by communities, going back decades or centuries?

Yet on the other hand, and largely unexamined by organizations like Oxfam because it is not their ideological inclination to do it, is modern-day central government's right and responsibility to put land to use which has the potential to scale up benefits for the entire country. As the needs of 'development' creep in and grow, how long and how justifiably can communities resist eviction and resettlement only on the basis of long traditional tenure? Is it just the conditions of eviction (forced, violent, uncompensated, etc) on question here, or whether the government should have at all exercised its legal right to evict 'encroachers' and put in place what it perceives as more economically useful tenants?

How best can the sensibilities of local communities and 'national' needs as adjudged by governments be balanced? Is it always possible or justifiable to bend in favor of local sensibilities, or can a bigger national-benefit case be sometimes made in favor of over-ruling those local sensibilities? Is a foreign land investment always, necessarily a 'grab?' If so, is it sometimes justifiable for a government to 'grab' land from locals for the perceived 'greater good?'        

For societies still very much in transition from the old 'traditional' to the new western-imposed 'modern' mores, the answers to these questions are from as clear cut as they might at first have seemed to the host government and the investor in this case. In the colonial days such evictions were simply justified by the fact of conquest. But in 2011, where governments have to at least try to present a facade of being representative of and responsive to the people they rule over, things get a lot more complicated.

NFC appears to be aware of these complications. It is reported to state in a report from 2010 that ‘using the law is not always the appropriate course of action...irrespective of the legal position we have a moral obligation, and a pragmatic need, to win hearts and minds and mitigate negative consequences of our investment.’

This is a lot more than many investors in Africa's modern day land rush are either aware of or willing to pay attention to. The sentiments attributed to the company would appear to cement NFC's image as a particularly informed and sensitive investor, which only makes the charges of forced evictions made against them seem even more shocking.


Investing in land in Africa is far more than just a western-style legal process. All these countries may have adopted a western-style legal system, but everywhere it is in a transitional state of co-existence with traditional systems with much deeper roots than the relatively new imported ones. These societies have a hard enough time trying to avoid constant conflicts between the two systems, but when a foreign entity such as NFC gets involved in an issue involving that cultural clash, it adds an added explosive element.

Governments who should know better than to simply invoke their legal right of dominion over land to ride roughshod over local communities often do so out of cynicism and lack of respect for their citizens. They are used to pretending to respect them at election time and more or less treating them dismissively like the old colonial governments used to do.

Investors, on the other hand, particularly those few like NFC that appeared to have read African land history, thoroughly done their investment homework and seem to have their hearts in the right place, often succumb to the temptation to cut corners because of the sometimes unreasonably optimistic projections they would have provided to their own investors.

Something will likely be worked out to save face for all the important players in the NFC-Uganda NFA-local communities saga. But it will be at the cost of NFC having lost a lot of its 'ethical investor' credibility, which will not be so easy to fully regain. No matter how this ends up, denying that its staff took part in violent evictions while admitting that they were indeed present, but only  'to observe the eviction process' sounds pitifully pathetic of NFC. It is not exactly the robust defense you would expect from a new-fangled ''socially responsible forestry company,'' is it?!

It is a recurring theme in the current African land rush: investors who may do all their business and agronomy numbers right, get all the legal t's crossed and i's dotted and get government support, but neglect the additional crucial issue NFC ironically mentions: to win the support and respect of local communities, who often at best have ambivalent relations with their own governments. A new foreign company that goes into an area on the basis of nothing more than legal papers from the central government has possibly created long term problems and ill will for itself, especially where communities do not perceive government as being defenders of their interests.          

As the African land rush continues unabated, attracting many investors perhaps as well funded but otherwise much less knowledgeable and prepared than NFC appeared to be on paper, expect a lot more land conflict fireworks.

African Agriculture     

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