Is This Really Benefit Sharing? Understanding Current Practices Around Community-Industry Agreements Tied to Land Investments

I. Introduction

Communities located near land investments for agricultural and forestry projects increasingly interact with investors who seek to sign a range of agreements with them. In theory, this is a positive development: guidelines for responsible land investments urge greater benefit-sharing with, and participation by, land users and project-affected communities, including through the negotiation of agreements between the investor and affected communities or their members. Increased use of community-industry agreements in this context follows patterns seen in the extractive industries, as such agreements, particularly between Indigenous groups and industry, often form an essential component of extractive project design and implementation in some countries. Yet little analysis has been undertaken to date on actual community-industry agreements linked to land investments. This gap in analysis leaves stakeholders without a clear understanding of existing practices, and without evidence-based guidance for improving future agreements.

This chapter highlights the “state of play” around community-industry agreements tied to land investments for agricultural and forestry projects, and provides recommendations on how such agreements, and practices around them, could be improved. It is based on an examination of 42 community-industry agreements tied to land investments in eight countries (Cameroon, Democratic Republic of the Congo, Indonesia, Liberia, Madagascar, Senegal, Sierra Leone, and South Sudan).2 In addition, the chapter draws from desktop research, including a review of multiple investor-state contracts for land investments that create requirements related to affected communities, as well as from discussions with stakeholders working with communities affected by land investments. While community-industry agreements differ dramatically—including in composition of the parties, with community parties to the agreements including

Indigenous or “native”3 peoples, as well as rural peoples who do not identify as Indigenous—a close analysis of the agreements collected for this research reveals a number of commonalities. Many of the commonalities are instructive when considering ways to improve or refine future agreements to maximize the benefits realized by project-affected communities while minimizing their risks. Recommendations in this chapter also draw from the much larger body of research on community-industry agreements concluded in the extractive industries.

Part II of the chapter considers how community-industry agreements fit within the broader legal frameworks governing land investments, and how such agreements may serve as a mechanism for benefit sharing. Part III provides an overview of the community-industry agreements examined for this chapter, focussing on the text of the agreements, supplemented by accounts of actual practice.

Based on those observations, and drawing where appropriate from best practices included in guidelines and/or used for community-industry agreements in the extractive industries, Part IV provides substantive and process-oriented recommendations that can be used to avoid common pitfalls and to improve future community-industry agreements tied to land investments.

II. Community-Industry Agreements in Context

Land investments are governed by a complex set of legal frameworks; communityindustry agreements should be considered in this context. The domestic legal framework is the primary source of applicable legal rules regulating land investments. International law is also relevant. International human rights law, which imposes obligations on governments and creates responsibilities for investors, requires that rights are respected, protected, and fulfilled, including in the context of investment projects. International investment law may also be relevant to foreign (or sometimes even domestic) investments in land via applicable international investment treaties. Additionally, for foreign investments, the laws of the home country may set out applicable requirements with extraterritorial reach.4

In addition to national and international laws, contracts also govern land investments in many countries. Particularly in parts of Africa and Asia, investor-state contracts are often used to transfer land to investors, to reach agreement on what types of incentives will be offered to investors, and/or to otherwise delineate certain rights and obligations related to a land investment. In some places, community-industry agreements are used instead of, or in addition to, investor-state contracts. For example, in contexts where communities own the land and have the right to lease or otherwise transfer use rights to investors, community-industry agreements may be used to effect the transfer. Alternatively, where communities do not have the ability to transfer rights in land, communities and investors may wish to supplement investor-state contracts with their own agreements in order to govern or guide their relationship, or aspects of it. Approaches may also vary within the same country, depending for example on the type and/or location of land being transferred, the type of investor, or the size of the investment.

In addition to potential differences within and between countries, practices may also evolve. Changing practices may be particularly likely in countries where governments are taking steps to recognize the legitimate tenure rights of their citizens or to implement the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (“Voluntary Guidelines”) (See, for example, efforts in Senegal to use a “lease-sub-lease” approach that navigates existing legal restrictions to provide a greater role to communities in leasing land to investors5). This wide range of legal contexts and approaches to contracting for land investments means that communityindustry agreements themselves differ considerably, as described in Part III.

This chapter focusses on community-industry agreements without distinguishing whether the community members party to the agreements are Indigenous or non-Indigenous. Although the distinction can be helpful in signaling the nature of an individual or group’s relationship with and rights to land, and their right to free, prior, and informed consent,6 the distinction is less relevant to the chapter. The chapter is primarily based on a textual analysis of agreements, with consent and consultations considered only in the very narrow context of the descriptions of consultation processes included in community-industry agreements.

As the agreements analyzed for this chapter fall on a spectrum of legitimate tenure rights, a detailed analysis and overlay of the international and domestic laws applicable to each relevant jurisdiction is beyond the scope of the chapter. Instead, the authors’ recommendations are grounded in the best practice of consulting all peoples whose legitimate tenure rights may be affected by an activity.

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