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Manufacturing Dissent:

How the Green Movement is Distorting Free, Prior and Informed Consent
A World Growth Report
June 2012

ExEcutivE Summary
Free Prior and Informed Consent (FPIC) has become a core element of environmental campaigning over the past few years. The FPIC narrative for environmental campaigners is simple: the private sector is engaging in projects that impact local communities; the way to address this supposed problem is to require FPIC for large-scale resource projects.

The real problem, however, is that there is no practical definition for FPIC. Despite this, a number of groups are calling for it to be a central part of any agreement at the Rio+20 conference. FPICs emergence in environmental campaigning followed the adoption of the United Nations Declaration on the Rights of Indigenous People (UNDRIP) in 2007. In the non-legally binding UNDRIP treaty, there is an article that demands FPIC if relocations of indigenous peoples it to occur, for whatever reason. The recognition of FPIC for indigenous communities is based on the understanding that customary frameworks exist within these communities, and that these legal frameworks should be recognised by states when allocating land and natural resources for other developments. FPIC for indigenous populations has since become standard practice for development institutions, however, most institutions recognise its limitations in the field, and that unanimity among all communities is impracticable. The environmental campaign definition of FPIC is significantly different. Organizations such as Greenpeace and WWF have called for FPIC to be applied for all resource projects and their impacts not only on indigenous groups, but also local or affected communities more broadly. The implications of applying FPIC to broader affected communities are significant for their potential to undermine the rule of law. The Greenpeace and WWF model implies that established land tenure and property rights within legal frameworks should be disregarded, and that they should be replaced with an over-arching concept of FPIC that would sit over the top of existing legal frameworks. Campaign organisations have subsequently used FPIC as a means to put the brakes on or halt completely development projects in poor countries. This is consistent with Greenpeaces broader objection to any large-scale economic activity in forest areas, whether for forestry, agriculture or mining. This broad framework for disruption has been introduced by environmental groups into certification systems, such as the Forest Stewardship Council (FSC).

Rather than support tenure rights and sustainable development, such a broad definition for FPIC without clear definition is likely to have the opposite effect as it will undermine property rights. Strong property rights and robust tenure systems are an essential part of economic development. Empirical evidence from Southeast Asia and the Pacific clearly demonstrates that strong tenure regimes have a measurable impact on economic development. Strong property rights ensure a productive use of resources by not having to allocate resources to defend landholdings; they also encourage long term investment in resources, and better environmental management of natural resources. The deployment of FPIC by environmental groups in developing countries has arguably had less to do with supporting the tenure rights of local communities and more to do with halting development projects altogether by disrupting projects and increasing perceptions of risks associated with these projects. Increasing perceptions of risk is relatively straightforward in developing countries, where legal institutions are already often weak and governance is poor. In Papua New Guinea, for example, Greenpeace has deployed FPIC to undermine forestry operations and investments. It has claimed that customary tenure has been disregarded right across the forestry sector, despite there being a legal and transparent framework for customary owners to permit access to resources and gain royalties. The Greenpeace actions have resulted in a number of legitimate development projects have been stalled or abandoned altogether due to the bogus claims of illegitimate customary landowners and insidious allegations of NGOs, much to PNGs economic detriment. In Uganda, campaign groups have taken advantage of the countrys weak tenure arrangements to disrupt agricultural investments across the country. Campaigners have protested investments in reforestation projects under the guise of FPIC, even though many of the original land claims were

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tenuous and marked by inter-clan feuding. When the projects collapsed denying local communities of rare investment and employment opportunities the problems of degradation and landlessness were not resolved. Development projects are easy targets for campaigners, but in a number of circumstances land conflict predated, and continued well after the involvement of companies. In Brazil, Greenpeace and other international NGOs have lobbied against the Brazilian cattle industry, based on accusations of businesses operating without the consent of indigenous land owners. According to Greenpeace, cattle ranching and deforestation is occurring within the Waraiwatsede indigenous lands in Mato Grosso. Greenpeace claim the Xavante people have been forced to live on only 20 per cent of the 165,000 hectares reserved for them, while the remaining 80 per cent is cultivated by large farms associated with land clearing. Greenpeace accuse large Brazilian meat and leather processor, JBS, of driving deforestation by purchasing cattle from properties situated within the lands. It also accuses JBS of purchasing from suppliers that use slave labour. JBS has denied these accusations. According to the company, an audit of their internal cattle sourcing system found that the company did not purchase from suppliers listed on the publically available embargo list compiled by the Brazilian Environmental Agency (IBAMA). Rights laid out in 1988 Constitution, and subsequent demarcation of the Waraiwatsede lands in 1993 effectively made settler activities illegal. But before this, land settling in Mato Grosso was not only tolerated and legal, but often encouraged by Government policies and subsidies. The resulting overlapping tenure and associated conflict is significantly more complex than has been made out by Greenpeaces attacks on the private sector. Greenpeaces rolling out of FPIC standards a campaign tool simply confuses rather than clarifies land tenure arrangements. In Indonesia, an exceedingly complex legal system, weak tenure rules and a long history of domestic migration have resulted in many cases of land conflict across Indonesia, with multiple actors, including indigenous groups, migrant groups, the private sector and the government. The administrative chaos has been exploited to create the impression of plantation companies and other private sector interests grabbing land from indigenous communities. This has been noted particularly in the Mesuji district in Sumatra, where a number of fatalities have resulted in clashes between various actors.

However, the situation in Indonesia is significantly more complex. It has been demonstrated in at least one case that the indigenous communities themselves were themselves encroaching on state land and illegally selling it to domestic migrants. This deployment of FPIC by Greenpeace and other groups is both disingenuous and destructive. It undermines efforts of indigenous communities worldwide that are genuinely seeking to establish tenure claims. It also undermines economic development in these countries by increasing legal uncertainty, thus further weakening the rule of law and existing tenure regimes. This use of FPIC indicates that groups such as Greenpeace and WWF, despite their rhetoric in favour of sustainable development, are conservation organisations at best, and anti-development agitators at worst. Their actions do nothing to promote genuine sustainable development that will bring the worlds poor out of poverty.

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ExEcutivE Summary

tablE of contEntS
executive suMMary introDuction: What is fPic 2.LanD tenure anD sustainabLe: DeveLoPMent 2 7

11

3.fPic anD enviroMentaL caMPaigns: case stuDy introDuction 14 4.case stuDy: custoMary cLaiMs in PaPua neW guinea 5.case stuDy: Deforestation on inDigenous LanDs in braziL 6.case stuDy 1: LanD confLict anD DegreDation in uganDa 7.case stuDy 2: sociaL content in inDonesia concLusions anD recoMMenDations references

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19

22

25

28 30

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acronymS anD abbrEviationS


acronyMs anD abbreviations
baL bfL bPn cbD cco engo face fMa fPic fsc hti htr ibge ifc igL iL inPe iucn LaP Png unDriP uWa vcs WWf Basic Agrarian Law Basic Forestry Law National Land Agency Convention on Biological Diversity Certificates of Customary Ownership Environmental Non-Governmental Organisation Forests Absorbing Carbon Emission Forest Management Agreement Free, Prior and Informed Consent Forest Stewardship Council Plantation Concession Community Forestry Concession Brazilian Institute of Geography and Statistics International Finance Corporation Incorporated Land Groups Indigenous Lands National Institute for Space Research International Union for Conservation of Nature Land Administration Project Papua New Guinea United Nations Declaration on the Rights of Indigenous People Uganda Wildlife Authority Verified Carbon Standard World Wildlife Fund (Worldwide Fund for Nature)

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acronymS anD abbrEviationS

6 Manufacturing Dissent

1.introDuction: WHat iS fPic?


Public debate over sustainable development has recently been dominated by what many campaign groups refer to as land-grabbing. Underlying this have been calls for the implementation of free, prior and informed consent for indigenous groups and local communities. However, definitions for these concepts are problematic.

There is no clear or agreed definition for land-grabbing. The general narrative that has been established by campaign groups is that large, often foreign, commercial investments for agriculture resource projects and in some cases conservation projects are acquiring large tracts of arable or forested land. According to critics, this results in negative social, economic and environmental impacts including:1 Displacement of local populations (indigenous or otherwise) and violation of human rights; Decreased economic security for local populations, who are deprived of access to resources; Decreased food security for the broader (national or regional) population; Increased levels of deforestation and therefore greater carbon emissions; Increased levels of environmental degradation. The situations described by campaign groups vary greatly between different social and national contexts. At the core of the claims of land-grabbing is the notion that the acquisition of land for any project requires the free, prior and informed consent (FPIC) of communities affected by the project. There are two key points dealt with in this chapter: definitions of FPIC, and what constitutes an affected community.

The most overt use of the term in UNDRIP refers reads as follows: States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior and informed consent before adopting and implementing legislative or administrative measures that may affect them. 3 The declaration also includes stipulates that States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilisation or exploitation of mineral, water or other resources. 4 It should be noted that UNDRIP is not a legally binding declaration. It does, however, play a symbolic role in international policymaking. It also makes specific reference to the State as they key actor in relation to indigenous communities, not the private sector or other groups. With regards to the communities affected, there is no universal definition of indigenous peoples that FPIC necessarily applies to. There are, however, practical approaches that are discussed below.

internationaL Definitions of fPic


There is no universally accepted definition of FPIC and its application.2 FPIC has, however, been established as a norm within a small number of multilateral institutions. FPIC relates almost solely to indigenous peoples in these contexts. Institutions include the United Nations Declaration on the Rights of Indigenous People (UNDRIP), the International Labour Organisation (ILO), and the Convention on Biological Diversity (CBD). ILO and CBD deployment of the term makes specific reference to indigenous populations. Similarly, the United Nations Development Group in 2008 published the Guidelines on Indigenous Peoples Issues, which addresses FPIC in this context.

nationaL Definitions of fPic


There are no domestic legal instruments that specifically recognise the international application of FPIC as outlined. Several legal jurisdictions have instruments in place that require consent processes to be followed. These include: Australia consent for resource development in certain areas must be obtained in through statutory indigenous-controlled Land Councils; 5 The Philippines The Indigenous Peoples Rights Act recognises the right of free, prior and informed consent of indigenous peoples for all activities affecting their lands and territories; 6

1. Cf. Greenpeace (2011). Briefing: Special-purpose agricultural and business leases in Papua New Guinea. Accessed at http://www.greenpeace.org/australia/Global/australia/11-076%20PNG%20Press%20 Briefing_smaller_F-1.pdf 2. Colchester, Marcus (2010). Free, Prior and Informed Consent: Making FPIC work for forests and peoples. Research Paper July 2010. TFD Publication Number 11. Scoping paper prepared for TFDs FPIC Initiative. 3.United Nations General Assembly (2007), United Nations Declaration on the Rights of Indigenous Peoples, Article 19. 4. United Nations General Assembly (2007), Article 32.1.

5. Cf. Commission On Human Rights (2005). Sub-Commission on the Promotwion and Protection of Human Rights Working Group on Indigenous Populations; Twenty-third session18-22 July 2005. Item 5 (b) of the provisional agenda. STANDARD-SETTING: LEGAL COMMENTARY ON THE CONCEPT OF FREE, PRIOR AND INFORMED CONSENT. The document refers specifically to: Aboriginal Lands Rights (Northern Territory) Act 1976, Pt. IV; Aboriginal Lands Rights Act 1983 (NSW), sec. 45(5); Aboriginal Land Act 1991 (Qld), sec. 42;, and Torres Strait Islander Land Act 1991 (Qld), sec. 80; Mineral Resources Act 1989 (Qld), sec. 54; Mineral Resources Development Act 1995 (Tas), Pt. 7, and; Aboriginal Land (Jervis Bay Territory) Act 1986 (Cth), sec. 43, 52A(1), (2) 6. Ibid.

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introDuction: WHat iS fPic?

Aotearoa-New Zealand the Crown Minerals Act 1991 provides special protection for Maori sacred land, as defined by the Te Ture Whenua Maori Act 1993 7

engo Definitions of fPic


Some campaign organisations, such as the Forest Peoples Program, recognise that establishing FPIC definitions is problematic and that the process is still in its infancy.10 This is in line with the view held by many indigenous groups and working groups within multilateral organisations.11 However, there has been a concerted effort by environmental organisations to both promote and broaden the definition of FPIC with regards to resource projects. The ENGO position advocated by groups such as Greenpeace and Rainforest Action Network is that FPIC is required for all large-scale commercial operations operating in forests, and that FPIC is required not only for indigenous groups, but also forest dependent communities.12 The deployment of FPIC by ENGOs has been problematic for the following reasons: definition Definitions of FPIC are already problematic; a broad application of FPIC across projects with no processes in place adds to the problem; Motivation Environmental and conservation campaign groups are by definition interested in conservation first, and the economic or social wellbeing of indigenous communities second; definition of community ENGOs such as WWF have called for FPIC definitions to be expanded to include broader affected communities, such as forest dependent communities. This has been further reflected in forest certification schemes such as the FSC (Forest Stewardship Council) where WWF has lobbied for an expansive definition of what constitutes an affected community. Private sector implementation ENGO deployment of FPIC has concentrated on having private sector organisations rather than states apply FPIC. As mentioned above, it is the state that ultimately determines resource or land allocations, not the private sector. The ENGO deployment of FPIC has the potential to undermine the development of indigenous communities by placing unworkable barriers on investment in resource projects. Campaign organisations have used FPIC as a means to put the brakes on or halt completely development projects in poor countries. This is consistent with Greenpeaces broader objection to any large-scale economic activity in forest areas, whether for forestry, agriculture or mining. The deployment of the term by ENGOs also potentially undermines development objectives of indigenous communities

Working Definitions of fPic in DeveLoPMent institutions


International development organisations such as the World Bank and the International Finance Corporation (IFC) have developed policies relating to both FPIC and indigenous peoples for their financing operations and policy interventions in developing countries. The clearest working definition has been used by the IFC, which does not require unanimity: FPIC will be established through good faith negotiation between the client and the Affected Communities of Indigenous Peoples. The client will document: (i) the mutually accepted process between the client and Affected Communities of Indigenous Peoples, and (ii) evidence of agreement between the parties as the outcome of the negotiations. FPIC does not necessarily require unanimity and may be achieved even when individuals or groups within the community explicitly disagree. 8 The World Bank policy on Indigenous Peoples informs the IFC policy with regards to definitions of indigenous peoples. For the World Bank, indigenous peoples: refers to a distinct, vulnerable, social and cultural group possessing the following characteristics in varying degrees: (A) self-identification as members of a distinct indigenous cultural group and recognition of this identity by others; (b) collective attachment to geographically distinct habitats or ancestral territories in the project area and to the natural resources in these habitats and territories; (c) customary cultural, economic, social, or political institutions that are separate from those of the dominant society and culture; and (d) an indigenous language, often different from the official language of the country or region. 9 Private sector actors have been encouraged to follow the IFC definitions through voluntary initiatives such as the Equator Principles, which are informed by the IFC and World Bank definitions. However, multilateral bodies such as UNDRIP focus specifically on the state. It is the state, rather than the private sector, that can ultimately apply FPIC; access to land or resources is generally determined by state administrative decisions, not the private sector itself.

7. Ibid. 8. International Finance Corporation (2012), Guidance Note 7: Indigenous Peoples, pp7 9. World Bank (2005), Policy on Indigenous People, OP 4.10, accessed at: http://web.worldbank.org/ WBSITE/EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,contentMDK:20553653~ menuPK:4564185~pagePK:64709096~piPK:64709108~theSitePK:502184,00.html 10. Colchester, op. cit.

11. UN-REDD Programme (2011). UN-REDD Programme Guidelines on Free, Prior and Informed Consent 12. CF. Greenpeace (2008). Model Timber Procurement Policy Statement. Greenpeace Australia. Accessed at http://www.greenpeace.org/new-zealand/PageFiles/111638/model-procurement-policy.pdf and Rainforest Action Network (2011). Keep Slave Labour Out of US Grocery Stores. Accessed at http:// understory.ran.org/2011/06/23/cargill-keep-slave-labor-out-of-us-grocery-stores/

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by applying what was a product of debates about indigenous development to the community at large. The deployment of the term also undermines existing process and tenure rights systems in place in many countries, by advocating an all-encompassing, undefined process for the allocation of land and resources that can potentially undermine the rule of law as it applies to ordinary (non-indigenous) citizens.

greenPeace versus greenLanD


Greenpeace, like WWF, is an organisation that places a higher priority on conservation rather than economic development and the welfare of local communities. Greenpeace has often found itself at odds with local indigenous communities. Greenpeace has launched broad campaigns against resource projects in Greenland, and simultaneously criticised hunting practices of local Inuit communities. In 2010 Greenpeace found itself at odds with both the Greenlandic government and local Inuit communities when it launched a large-scale campaign against natural gas exploration by Cairn energy off Greenland. The Greenpeace vessel esperanza was subsequently involved in a standoff with Danish naval vessels off Greenland. Greenlands prime minister denounced Greenpeaces actions, claiming they were damaging the economy and ignoring Greenlands national environmental and safety regulations. Inuit communities expressed support for the energy projects, acknowledging that the projects would lead to greater economic growth and greater autonomy from Denmark. To add insult to injury, Greenpeace attacked traditional Inuit seal and what hunting practices, which the indigenous populations rely upon for sustenance and consider the practice to be culturally significant.

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introDuction: WHat iS fPic?

This would result in an increase in the number of people that could potentially veto resource projects with no legal standing. This would potentially undermine the rule of law in these countries, and, rather than strengthening land tenure in developing countries, it would undermine it further. This would create greater uncertainty over proper rights, which would have a negative impact on development outcomes as discussed in the next chapter.

1.rEDD anD lanD uSE: an uPDatE

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SuStainablE DEvEloPmEnt
It is well recognised by development economists that secure land tenure is the linchpin of economic development. Secure land tenure also provides the basis for sustainable land use and sustainable forest management.

2.lanD tEnurE anD

tenure anD econoMic DeveLoPMent


A number of studies have drawn links between land tenure and economic development. The theoretical basis for this is reasonably straightforward and well established within economic literature. Property rights affect economic activity in four main ways: 13 Expropriation risk insecure property rights imply that individuals may fail to realise the fruits of their investment and efforts; costs insecure property rights lead to costs that individuals have to incur to defend their property which, from the economic point of view, is unproductive; Unrealised gains from trade a productive economy requires that assets are used by those who can do so most productively, and improvements in property rights facilitate this; collateral Modern market economies rely on collateral to support a variety of financial market transactions and improving property rights may increase productivity by enhancing such possibilities. Economists and commentators have noted that little attention has been paid to the role of property rights within the literature until relatively recently. This is partly due to much research assuming that clear property rights exist in many circumstances. Despite this, there are a number of case studies that demonstrate the clear relationship between clear and secure tenure and economic gains. One recent notable example is Yoo and Steckels examination of the impact of well-defined property rights under Japanese colonial rule through Asia and the Pacific.14 The authors point out that most examinations of Southeast Asian property rights use Singapore and Hong Kong as clear exemplars of the benefits of secure property rights, which were imposed by British colonial rule.

In this case, the authors demonstrate similar patterns of property tenure and economic development in Korea and Taiwan under Japanese occupation. Well-defined property rights in both these territories secured land taxation for administration and enabled farmers to secure loans for capital improvements principally irrigation systems. The authors also compare the impact of a secure land tenure system in the Micronesian state of Palau, which was occupied by Japanese forces prior to World War Two, with other Micronesian states. They point out that Palau was three times richer than other Micronesian states in 2007.

tenure anD naturaL resource ManageMent


Secure land tenure, as indicated above, facilitates a transition away from subsistence agriculture to modern commercial agriculture. However, there are a number of ways in which tenure insecurity can restrict this transition. First, if land parcels are allowed to lie fallow, this reduces the productivity of the agriculture sector as a whole. Agricultural productivity of land is more likely to occur when the owners or users of land feel secure in their ability to obtain sustained benefits from investments in the land.15 Second, use of swidden methods and poor farming practices to establish tenure over land in order to defend against encroachments can result in overall degradation of land. Third, the absence of a functioning land market means that those who have the skill and capacity to invest in farm or forest land will not do so easily.16 Fourth, use of title as collateral allows long-term investment in land, and therefore a stronger incentive for long-term resource management.17

13. Timothy Besley and Maitreesh Ghatak, Property Rights and Economic Development. In Dani Rodrik and Mark Rosenzweig, editors: Handbook of Development Economics, Vol. 5, The Netherlands: NorthHolland, 2010, pp. 4525-4595. 14. Dongwoo Yoo and Richard Steckel (2010), Property Rights and Financial Development: The Legacy of Japanese Colonial Institutions, The National Bureau of Economic Research, Working Paper No. 16551

15. Goldstein, M., & Udry, C. (2008). The profits of power: Land rights and agricultural investment in Ghana. Journal of Political Economy, 116(6), 9811022. 16. Kopeva, D. & Noev, N. 2001. Aspects of land consolidation after the land reform. In I. Osamu, ed. The new structure of the rural economy of post-communist countries, pp. 123 - 159. Sapporo, Japan, Slavic Research Center, Hokkaido University 17. Ibid.

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lanD tEnurE anD SuStainablE DEvEloPmEnt

secure tenure anD environMentaL DegraDation


Conversely, it has been well documented that insecure land tenure leads to poor environmental outcomes and unsustainable resource use. A number of studies have concluded that insecure land tenure is the reason developing-world farmers will cultivate their land to exhaustion. These include: Southgate (1988)18, Mink (1993)19, Repetto (1989) 20, and Mendelson (1994) 21. The latter notes that absence of land tenure does not cause degradation activities; rather it is the knowledge that land can be appropriated at any time that causes the unsustainable activities (see previous section on expropriation risk). More recently the relationship between deforestation and insecure land tenure has been established.22 The conclusion drawn is that secure land tenure increases the likelihood of a positive forest cover outcome by 40 per cent. In what is arguably the most comprehensive meta-analysis of deforestation drivers in tropical countries, issues related to property rights institutions are reportedly associated with deforestation in 44 per cent of all cases.23 More specifically, these issues include land tenure insecurity, land races, open access to forests, dysfunctional customary rights, low empowerment of local user groups, and, even, legal land titling procedures.

LanD tenure reforM: Lessons froM the PhiLiPPines


As nations develop and more robust institutions and political systems emerge, there are often calls for large-scale land reform. Implementation of land reform can be critical to a nations long-terms economic development. Uganda, for example, is currently engaged in a national debate over land reform. It is widely recognised that land reform processes are crucial to the country maximising its economic potential. However, poor implementation of land reform can lead to poor economic and environmental outcomes. The arrival of the Aquino Government in the Philippines in 2006 heralded constitutional reform in the Southeast Asian nation. There were also broad calls for agrarian reform by farmer and peasant groups. The agrarian reforms that were introduced were known as the Comprehensive Agrarian Reform Law. The law resulted in the redistribution of the land by landowners to tenant farmers, who had previously paid rent to landowners. Landowners were able to divest up to 5 ha of land to tenant farmers and receive compensation from the Filipino Government. According to a number of critics, the failure of the Aquino reforms led to greater tenure insecurity, lower investments in agriculture, followed by higher levels of unemployment.24 This led to a migration of former tenants to upland areas which subsequently underwent high levels of deforestation. Similar impacts have been noted by other researchers.25

18. Southgate, D. 1988: The Economics of Land Degradation in the Third World. World Bank 19. Environment Department Working Paper No. 2. Washington, DC: the World Bank. Mink, S.D. 1993. Poverty, Population, and the Environment.World Bank Discussion Paper 189. Washington, DC: the World Bank. 20. Repetto, R. 1990. Deforestation in the Tropics. Scientific American 262 (4): 36-45. 21. Mendelson, R. 1994. Property Rights and Tropical Deforestation. Oxford Economic Papers 46: 750-756. 22. Robinson BE, Holland MB, Naughton-Treves L. 2011. Does secure land tenure save forests? A review of the relationship between land tenure and tropical deforestation. CCAFS Working Paper no. 7. CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS). Copenhagen, Denmark. Available online at: www.ccafs.cgiar.org

23. Helmut Geist and Eric Lambin (2002), Proximate Causes and Underlying Driving Forces of Tropical Deforestation, BioScience, Vol 52 (2), pp 143-150 24. Roque, C.R.; Zamora, P.M.; Alonzo, R.; Padilla, S.G.; Ferrer, M.C.; Cacha, M.D.M. Philippines: Cebu, Negros and Palawan. In The Root Causes of Biodiversity Loss; Wood, A., Stedman-Edwards, P., Mang, J., Eds.; Earthscan Publications: London, UK, 2000; pp. 282-308 25. Laura Schmitt Olabisi (2010), The System Dynamics of Forest Cover in the Developing World: Researcher Versus Community Perspectives, Sustainability, Vol. 2 (6), 1523-1535

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Manufacturing Dissent 13

fPic anD EnvironmEntal camPaiGnS: caSE StuDy introDuction


Free Prior and Informed Consent has become a core part of campaigning by environmental groups. However, it seems that this has less to do with establishing property rights for local communities than it does with preventing investment in agriculture and forestry in developing countries. As noted above, the NGO position on FPIC has been broadened from indigenous communities to local communities in some cases, and forest dependent communities in others. As the following case studies demonstrate, environmental campaign groups seem to have deliberately targeted nations and regimes where either land tenure rules are weak and/or poorly enforced, or undergoing reform processes. In all of the following cases, campaign groups have constructed a narrative where the private sector has allegedly displaced local communities or established operations on local land with no legal standing. However, in each of these cases, it is evident that campaign groups have oversimplified the actual events on the ground, and that there are myriad factors at work.

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4. caSE StuDy: PaPua nEW GuinEa


International NGOs have attacked forest operators in Papua New Guinea (PNG) for failing to gain FPIC. But NGO accusations - often based on dubious customary claims - have been proven spurious; ultimately threatening future development in PNG.

Land Tenure in PNG


PNG has a complex system of land ownership, incorporating both customary and private tenure. PNGs Land Act (1996) serves to regulate State land and govern interactions between the State or private companies and customary land owners. The Act defines two types of land ownership: customary land, i.e. land that is owned by the indigenous people whose ownership rights and interest is regulated by their customs: and alienated land i.e. lands that are no longer held under customary ownership and regulated by the state. Most of the land in PNG is recognised as customary land.26 Under the act, customary land cannot be sold, leased, mortgaged or disposed of except in accordance with custom. Only the state may acquire customary land and grant it to third parties through lease agreements. Under the framework, customary land cannot be registered individually.27 Instead, the Land Group Incorporation Act (1974) makes provisions to register land under Incorporated Land Groups (ILGs) based on a customary claim to specific homelands. Registered land can then be leased to developers through provisions made in the Lands Act (1996). In practice however customary land is often partially alienated, for instance sold or leased to squatters or settlers who have migrated from their traditional homelands. Conversely there are numerous cases of alienated land being claimed as customary lands, often under dubious circumstances.28

But group ownership and individual tenure have striking difference; group ownership restricts individual entrepreneurship.31 It reduces the incentive for individuals to work their land as they wish; to use their land for collateral; and to make a profit and re-invest. It is precisely this entrepreneurial process that achieves economic development. PNGs most serious development problems result largely from the denial of private property rights to agricultural producers.

case stuDy: WaWoi guavi forestry concession anD custoMary LanD cLaiMs
Although much of PNGs land is purportedly held in customary ownership, there is no formal customary title over most of the countrys natural forests.32 In 2005, the Government enacted amendments to the Forestry Act (1991) that repelled the obligations of the Forest Authority Board to enter into consultation with or obtaining of consent of customary owners when negotiating a Forestry Management Agreement (FMA). In effect the Forestry Act amendments reflect the tenuous customary claims of some landowner groups to areas of remote forest. NGOs frequently accuse development projects of operating on customary lands without indigenous consent, often bolstered by the unsubstantiated claims from indigenous landowners. Unoccupied areas in PNG including much of PNGs remote and inaccessible forest area are not subject to customary title. However Greenpeaces has continued to attack a logging concession in PNGs Wawoi Guavi district claiming that logging has been undertaken without informed consent of indigenous landowners.33 Greenpeace chose to ignore that there is no documented landownership in any part of PNGs forest areas.34 Much of PNGs forested area was customarily regarded as commons a resource in which all those living in and around it possess rights of access for hunting and gathering. Access to the common is not the rights of any one individual or family, and does not afford one the right to exclude others.

Customary Ownership and PNGs Development


A number of experts argue that PNGs customary ownership arrangements effectively constitute communal ownership; and that these arrangements have hindered national development.29 Opponents claim that customary tenure in PNG should in fact be viewed as a form of private property rights, although privately owned by a group rather, than by individuals.30

26. Some estimate as much as 97% of PNGs land is held in customary tenure, although this is certainly overstated. See Tim Curtin and David Lea (2006), Land Titling and socioeconomic development in the south pacific, Pacific Economic Bulletin, Vol. 21, No 1 27. Legislation was intended to reflect PNGs cultural heritage of communal land ownership, although this has been disputed by Curtin and Lea, based on the history individual ownership of PNG houses and traditional garden farms. 28. Colin Filer, cited in David Lea and Timothy Curtin (2011), Land, Law and Economic Development in Papua New Guinea, Cambridge Scholars Publishing 29. See Steven Gosarevski, Helen Hughes, and Susan Windybank (2004), Is Papua New Guinea Viable?, Pacific Economic Bulletin, Vol. 19, No. 1; and Steven Gosarevski, Helen Hughes, and Susan Windybank (2004), Is Papua New Guinea viable with customary ownership?, Pacific Economic Bulletin, Vo. 19, No. 3.

30. The Australian Institute (2005), Privatising Land in the Pacific A defence of Customary tenures, Ed. Jim Fingleton, 31. Tim Curtin and David Lea (2006) 32. Amendments established that there is no customary title over most of the natural forests (covering 77 per cent of the countrys total land area). According to Lea and Curtin, this was partly a response to recommendations from a controversial World Bank review that assessed the state of forestry permits between 2001 and 2005. See Tim Curtin and David Lea (2006) 33. Greenpeace (2004), The Untouchables: Rimbunan Hijaus world of forest crime and political patronage, Amsterdam 34. Tim Curtin (undated) Is logging in Papua New Guinea illegal and unsustainable?

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Logging operations at Wawoi Guavi operate in compliance with PNGs legal requirements for landowner consent.35 Furthermore, the operation has delivered considerable benefits to land owners. In addition to royalties and levies, the project has contributed significantly in infrastructure, education and health. This includes over one million Kina investment in education and 300,000 Kina in health infrastructure.36 Given the poor state of PNGs local government services, the schools and hospitals built with this funding take on added importance. However, such investments is not assumed a number of legitimate development projects have been stalled or abandoned all together due to the bogus claims of illegitimate customary landowners and insidious allegations of NGOs, much to PNGs economic detriment.

35. ITS Global (2006), Whatever it takes: Greenpeaces anti-forestry campaign in Papua New Guinea, Melbourne, Australia 36. ITS Global (2007), The Economic Contribution of Rimbunan Hijaus forestry operations in Papua New Guinea, Melbourne, Australia.

Manufacturing Dissent 17

caSE StuDy: cuStomary claimS in PaPua nEW GuinEa

Greenpeace has argued that the original Timber Permit for Wawoi Guavi was unlawful because the timber rights had not been properly acquired from the indigenous landowners. However where land is not recognised as customary, it is considered unoccupied and therefore landowner consent is not required. In reality, it is not difficult for NGOs to locate landowners eager to claim that they gave no consent to a nearby project.

18 Manufacturing Dissent

5. caSE StuDy: braZil


International NGOs have lobbied against the Brazilian cattle industry, based on accusations of businesses operating without the consent of indigenous land owner. Accusations are often factually inaccurate - whitewashing several centuries of local land conflicts in order to single out the private sector. In such cases, FPIC standards have effectively been used as an environmental campaign tool rather than a push for sustainable development.

Brazilian Forestry Code and Deforestation


NGOs have decried proposed revisions to Brazils 1965 Forestry Code. While the proposed Code largely maintains existing legal requirements for landowners to conserve or replant forest cover, there are concerns regarding new provisions granting amnesty to landowners involved in illegal deforestation prior to July 2008. ENGOs claim that amnesty works as an incentive for land clearing and could lead to future deforestation. While amnesty may provide some signals to those responsible for illegal deforestation, the facts on the ground suggest that any attempt to address deforestation in the Amazon requires reforming the national land tenure system. Deforestation in Brazil decreased significantly over the last two decades according to the leading global forestry assessment.37 The annual rate of deforestation in the Amazon is now 20 per cent of what it was during its peak in 1994.38 The current rate of deforestation in the Amazon is the lowest rate estimated by the National Institute for Space Research (INPE), since they began monitoring annual deforestation through satellite data in 1988. Decreasing rates of deforestation are largely attributed to the success of the Brazilian Governments improved monitoring and enforcement efforts. However much of the illegal deforestation that continues, occurs as a result of poor tenure arrangements.

demarcation or regulation in 2006.39 This area constitutes a far greater percentage than either private farms, or areas under legal protection such as Indigenous Lands or National Parks. Brazils insecure tenure framework acts as an incentive for squatters and settlers to deforest land that falls under this category. The basic legal framework for land tenure comes in the Land Statute of 1964 (Estatuto da terra). This instrument gives campesinos (landless peasants) the right to settle on undeveloped public or private lands. This was further consolidated in a law adopted in 1980 that gave squatters responsible for developing land during five consecutive years without opposition of landowners, the ability to claim property title over the area.40 Furthermore, the 1988 Constitution and the Agrarian Law of 1993 allowed for the redistribution of unproductive establishments to landless and rural workers, with the number of expropriations increasing significantly from the mid-nineties.41 These processes create land tenure insecurity on land plots that do not serve existing, legally defined, functions especially forests. The 1988 Constitution does not provide a clear definition of underdeveloped land. In practice the framework regards forests as unused incentivising squatters and encouraging landowners to clear forests to prevent invasion. Thus landowners often feel obliged to clear forest in order to guarantee tenure. Despite prohibitions of deforestation under the existing 1965 Forestry Code, any landowner who did not clear forests would in practice lose the land to settlers.42 Economic modelling has confirmed the detrimental effect of land tenure insecurity on deforestation in the Brazilian Amazon.43 Other models have indicated that regulating tenure regimes is the best option to reduce deforestation in the Amazon.44

Tenure Insecurity in Brazil


Insecure land tenure is leading to encroachment and deforestation in Brazil. At present the Amazon region is associated with relative land abundance. According to Brazilian Institute of Geography and Statistics (IBGE), 45 per cent of the region was classed as public wastelands lacking any formal

37.UN-FAO (2010), Global Forest Resource Assessment 2010, accessed at: http://www.fao.org/forestry/fra/ fra2010/en/ 38. According to the INPE, deforestation in real terms was 6 km2 in 2010-2011, down from a 1994 peak of almost 30km2, accessed at: http://www.inpe.br/ingles/news/news.php?Cod_Noticia=271 39.Claudio Araujo, Catherine Araujo Bonjean, Jean-Louise Combes, Pascale Combes Motel and Eustaquio J. Reis (2010), Does Land tenure insecurity drive deforestation in the Brazilian Amazon?, CERDI 40. Philip Fearnside (2011), Brazils Amazon Forest in mitigating global warming: unresolved controversies, Climate Policy

41. Philip Fearnside (2001), Land-tenure issues as factors in environmental destruction in Brazilian Amazonia: The case of southern Par, World Development 29 (8): 1361-1372 42. Philip Fearnside (2011), Claudio Araujo et al. (2010) 43. Claudio Araujo et al. (2010) 44. Andrea Cattaneo (2001), Deforestation in the Brazilian Amazon: Comparing the Impact of Macroeconomic shocks, land tenure and technological change, Land Economics, 77 (2) 219-240 45. Various sources in Philip Fearnside (2001), 46. Philip Fearnside (2001), 47. Roque Roldn Ortiga (2004), Models for Recognizing Indigenous Land Rights in Latin America, Paper No. 99 World Bank Environmental Department Biodiversity series.

Manufacturing Dissent 19

caSE StuDy: DEforEStation on inDiGEnouS lanDS in braZil

Brazils complicated tenure system also leads to widespread irregularities in land titling. For instance government data from the state of Para suggests that 75 per cent of all properties over 10,000 ha have invalid titles, while a substantial part of the land is registered to fictitious people.45 This is compounded by Brazils muddled system of land-title registration, where a range of titling documents may be filed with different registry offices, resulting in frequently overlapping land claims.46 Despite insecure land tenure arrangements, Brazil has a strong framework for protecting indigenous land rights.47 Under the 1988 Brazilian Constitution, indigenous people have primary rights to their lands, and are free to use them for productive activity, preservation of natural resources and cultural and spiritual well-being. The constitution made it incumbent upon the State to demarcate these lands as Indigenous Lands (ILs), and guaranteed indigenous peoples perpetual usufruct of their lands. In 1995, Brazil adopted new legislation adding a three month period of contention, during which time non-indigenous claimants can challenge the demarcation of ILs. The vast majority of grievances against existing indigenous lands have been dismissed, despite concerns from NGOs.48

Environmental Agency (IBAMA). The company further claims that it has developed a GPS mapping system to ensure supplies are not located within ILs.50 NGOs believe that authorities are aware of farming in the Waraiwatsede IL.51 But authorities, hampered by underfunding, have been ineffective in curbing deforestation. Rights laid out in 1988 Constitution, and subsequent demarcation of the Waraiwatsede IL in 1993 effectively made settler activities illegal. But before this, land settling in Mato Grosso was not only tolerated and legal, but often encouraged by Government policies and subsidies.52 According to non-NGO data, deforestation in this area does appear to be a major problem with over 6000 ha cleared between 2000 and 2001, including two clearings of about 1800 ha each.53 Accelerated levels of deforestation are a likely result of land conflict, as settlers have an added incentive to exploit resources before eviction. Problems facing the Xavante Indians will not be remedied by NGO finger-pointing. Instead the focus should be on improving enforcement and monitoring efforts; and reforming land tenure arrangements to reduce incentives for squatters and land clearing. Distant NGOs attack the private sector for disregarding landowner consent. These NGOs fail to acknowledge that many of these issues pertain to local land conflicts; largely divorced from businesses operating at the end of the supply chain. Using FPIC as a campaign tool to attack target industries will do little to address environmental degradation on indigenous lands. Accelerated levels of deforestation are a likely result of land conflict, as settlers have an added incentive to exploit resources before eviction. Problems facing the Xavante Indians will not be remedied by NGO finger-pointing. Instead the focus should be on improving enforcement and monitoring efforts; and reforming land tenure arrangements to reduce incentives for squatters and land clearing. Distant NGOs attack the private sector for disregarding landowner consent. These NGOs fail to acknowledge that many of these issues pertain to local land conflicts; largely divorced from businesses operating at the end of the supply chain. Using FPIC as a campaign tool to attack target industries will do little to address environmental degradation on indigenous lands.

case stuDy: LanD cLearing in the MaraiWatseDe iL


International NGOs such as Greenpeace are exploiting the concept of FPIC by levelling accusations of land grabbing at the private sector. But in Brazil, where multiple layers of land tenure have led to conflict between settlers and indigenous people, issues of landowner consent in ILs deserve thorough analysis. According to Greenpeace, cattle ranching and deforestation is occurring within the Waraiwatsede IL in Mato Grosso. Greenpeace claims the Xavante people are forced to live on only 20 per cent of the 165,000 hectares reserved for them, while the remaining 80 per cent is cultivated by large farms associated with land clearing.49 Greenpeace accuses large Brazilian meat and leather processor, JBS, of driving deforestation by purchasing cattle from properties situated within the IL. They also accuse JBS of purchasing from suppliers that use slave labour. JBS denies these accusations. According to the company, an audit of their internal cattle sourcing system found that the company did not purchase from suppliers listed on the publically available embargo list compiled by the Brazilian

48. Roque Roldn Ortiga (2004), Models for Recognizing Indigenous Land Rights in Latin America, Paper No. 99 World Bank Environmental Department Biodiversity series. 49. Roque Roldn Ortiga (2004) Greenpeace (2011), Broken Promises How the Cattle industry in the Amazon is still connected to deforestation, slave labour and invasion of indigenous lands, Brazil 50. JBS Press release (2011), JBS denies Public Prosecutors accusations of breach of agreements, 19 October 51. Reporter Brasil/Both ENDS (2011), Valuing the Amazon Impacts of soy and soy export infrastructure in the Brazilian Amazon region,

52. Wendy Jepson (2006), Producing a Modern Agricultural Frontier: Firms and Cooperatives in Eastern Mato Grosso, Economic Geography, 82(3) 53. Phillip Fearnside (2003), Indigenous people as providers of environmental services in Amazonia: Warning signs from Mato Grosso, in: A. Hall (ed.) Global Impact, Local Action: New Environmental Policy in Latin America. University of London, Institute of Latin American Studies (ILAS), London, U.K.

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Manufacturing Dissent 21

6. caSE StuDy: uGanDa


NGOs have levelled accusations of land grabbing at companies attempting to establish reforestation projects operating in Uganda, based on alleged failures by the company to implement FPIC. NGOs have deployed FPIC as a campaign tool in the middle of a national debate over broader land reforms, singling out the private sector. However, the situation on the ground is complex, with multiple local interests competing for the same resources and making illegitimate claims to land.

Land Tenure in Uganda


Following political upheaval under both a colonial Government and a military dictatorship, Uganda attempted to consolidate conflicting land tenure frameworks in the 1990s. The new Uganda Constitution (1995) recognised four types of land tenure: freehold; mailo (quasi-freehold), leasehold; and customary tenure. Under the constitution, all Ugandan citizens owning land under customary tenure are able to acquire Certificates of Customary Ownership (CCO). Once a certificate has been acquired, customary land owners are able to convert their title into freehold if they wish. Following this, the land is registered under the Torrens system legislation and is no longer subject to customary land law. The framework aims to improve security of tenure; customary tenants living on land that was formally Government owned cannot be evicted, as had occurred in the past; Furthermore, tenure security is guaranteed by acquiring a CCO, which acts as legal evidence of customary rights, and generally allows the certificate holder the right to deal with the land like any other landowner (for instance mortgage, lease or sell the land). This process is reiterated in the Land Act (1998).54 The majority of Ugandans hold their land under this complicated system of customary tenure.55 The National Land Policy highlights concerns that customary tenure is associated with i) insecure tenure for land owners; ii) impeding development, by restraining the land market; iii) and discriminating against women, as they are often not afforded land rights under the customary framework.56 Despite attempts to reform land tenure, the system has failed; the National Land Policy notes that The dual system of lands administration (the formal/statutory and informal/customary) breeds conflict, confusion and overlaps in institutional mandates.57

Accelerating Rates of Deforestation in Uganda


Ugandas complicated and often conflicting systems of tenure compounded by tension between diverse ethnic groups within the country and limited historical records of land and forest usage, have contributed to accelerated rates of deforestation.58 Uganda is among the worlds top five countries with the largest annual deforestation rates over the last decade; rising from 2.03 per cent per year between 1990 and 2000, to 2.72 per cent per year between 2005 and 2010. The total forest cover decreased from 4.8 million ha in 1990 (24 per cent of total land area), to 3.0 million ha in 2010 (15 per cent of total land area).59 Some data suggests that the proximate causes of forest loss are pit sawing and logging for lumber, charcoal and firewood production, population growth, urbanisation and industrial development.60,61 Agricultural expansion also appears to be a major driver of deforestation in Uganda, especially in areas that are intensely populated or have large migrant settler populations. According to data presented in a report sanctioned by the Ugandan Government, by 2008 there were over 300,000 illegal settlements in protected forest areas.62 The same report claims that the majority of encroachers in protected forest areas are people who have come from other locations and have been facilitated by or are protected by local leaders or protected areas personnel.

case stuDy: the inDigenous benet of Mt eLgon


NGOs have accused businesses operating in Uganda of land grabbing and contravening FPIC obligations, with little consideration for the complexities of local land conflicts and economic development.

54. John Mugambwa (2007), A Comparative Analysis of Land Tenure law reform in Uganda and Papua New Guinea, Journal of South Pacific Law, 11 (1) 55. Republic of Uganda - Ministry of Lands, Housing and Urban Development (2011), The Uganda National Land Policy (Final Draft), Kampala Uganda 56. Also see Banana, A. Y., Bukenya, M., Arinaitwe, E., Birabwa, B. and Ssekindi, S. (2012), Gender, tenure and community forests in Uganda, Working Paper 87, CIFOR, Bogor, Indonesia. 57. Republic of Uganda - Ministry of Lands Housing and Urban Development (2011) 58. ,Joseph Bahati, Abwoli Banana, William Gombya-ssembajjwe, Multi-Stakeholder Governance in Land and Forestry in Uganda: Conflict Mitigation, Scale, Knowledge and Collective Action, case study presented at the IASC Conference in Cheltenham, England

59. UN-FAO (2010), Global Forest Resource Assessment 2010 60. Abwoll Y. Banana and William Gombya-Ssembajjwe (2000), Chapter 4 - Successful Forest Management: The Importance of Security of Tenure and Rule Enforcement in Ugandan Forests, in Forest resources and institutions, UN-FAO Forestry Department Working Paper No. 3, edited by Clark Gibson, Margaret A. McKean and Elinor Ostrom, accessed at: http://www.fao.org/ DOCREP/006/X2104E/X2104E05.htm 61. African Forest Forum (2011), Forest Plantations and Woodlots in Uganda, Working Paper Series Vol 1(17), Kenya 62. REDD National Focal Point/Government of Uganda (2011), REDD Readiness Preparation Proposal For Uganda

22 Manufacturing Dissent

FACE, in partnership with Uganda Wildlife Authority (UWA), reportedly began planting trees inside Mount Elgon National Park in Eastern Uganda in 1994. In exchange for financing plantations, FACE received the rights to the sequestered carbon. The project gained initial support from the IUCN (International Union for the Conservation of Nature), and was certified under the FSC (Forest Stwardship Council). International NGOs such as the World Rainforest Movement and Friends of the Earth have accused the company of causing large scale land evictions and infringing on the rights of local communities at Mt Elgon.63,64 They claim that indigenous people were not consulted and did not give consent to the project. The Ugandan Government declared Mt Elgon a National Park well before FACE started operations. Yet NGOs have ignored the history of competing land claims between Government authorities, indigenous people and local settlers; and instead have blamed the private sector. In 1983 a protected area was declared at Mt Elgon. Local communities living within the gazetted park boundaries were evicted. The Government allocated 6000 ha of the park as a reserve to accommodate the Benet people - an indigenous group with customary links to the area. Originally the term Benet was used to refer to the several communities who were evicted from the park in the early 80s who claim customary ownership on indigenous grounds. It is documented that non-Benet settlers living in the reserve area now refer to themselves as Benet. When the resettlement area was initially gazetted, a scramble for land took place in which much of the land was taken by nonBenet people. There are also allegations that the lands were unfairly distributed and misappropriated during resettlement.65,66 The reserve boundaries were altered in 1992, generating more confusion and conflict. Between 4,000 and 6,000 people considered encroachers - were again evicted as a result of this conflict. It was only following these developments that FACE began their afforestation efforts.

With the constant possibility of eviction, inhabitants of the resettlement area have not made the necessary investments in their land. They rely on illegally extracting park resources to supplement their incomes, leading to serious environmental degradation from within the Mt Elgon National Park.67 Indigenous communities have lost land to non-indigenous settlers with dubious customary claims; while local communities have forgone economic development. Campaigners continue to use FACE as a case study for land grabbing that ignores FPIC. However when the project collapsed - denying local communities of rare investment and employment opportunities - the problems of degradation and landlessness were not resolved. Development projects are easy targets for campaigners, but in a number of circumstances land conflict predated, and continued well after the involvement of companies.

63. Friends of the Earth (2011), Land life and justice how land grabbing in Uganda is affecting the environment, livelihoods and food sovereignty of communities, Netherlands 64. Chris Lang and Timothy Byakola (2006), A funny place to store carbon: UWA-FACE Foundations tree planting project in Mount Elgon National Park, Uganda, World Rainforest Movement, UK 65. SGS Qualifor (2007), Forest Management Certification Report, SGS South Africa, Doc. Number AD 36-A-04 (UWA-FACE Mt Elgon National Park)

66. David Himmelfarb (2006) and Eija Soini (2007), Land tenure and land management in the districts around Mount Elgon: An assessment presented to Mount Elgon Regional Ecosystem Conservation Programme (MERECP), ICRAF Working Paper no. 49. Nairobi, Kenya, World Agroforestry Centre 67. Eija Soini (2007)

Manufacturing Dissent 23

caSE StuDy: lanD conflict anD DEGraDation in uGanDa

FACE (Forests Absorbing Carbon Emission) is a foundation created in 1990 by four Dutch electricity companies. FACE was initially intended to offset emissions from coal-fired power station by provided financing for reforestation programs. More recently FACE moved into the carbon credit market, selling carbon credits under the Verified Carbon Standard (VCS).

Tenure insecurity in and around the resettlement area meant forests became an open access resource and susceptible to rapid degradation. There are also reports that evicted locals were involved in vandalising forest plantations.

24 Manufacturing Dissent

7.caSE StuDy: inDonESia


Many international NGOs have claimed that large-scale forestry and agricultural developments have undermined tenure rights of local and indigenous communities in Indonesia. However, land tenure in Indonesia is vastly complex, and what many NGOs fail to communicate is that on the ground, there are numerous conflicting interests and no easy answers.

Land Law and Tenure in Indonesia


The Indonesian legal system is based on Roman-Dutch law, Islamic law and customary (adat law). Dutch presence and subsequent colonisation during the 350 years preceding the end of World War II left a legacy of Dutch colonial law. Some colonial legislation still applies today. After Indonesian independence in 1945, Indonesian authorities began creating a national legal system, which is the dominant legal system. Islamic law applies only in civil matters. Adat or customary law is an additional layer in the legal framework, though it is administered at district or village level. Adat law makes departures from state in laws relating to marriage, inheritances, land law and delict. While adat law can be either statutory or non-statutory, it should be noted that adat law is predominantly non-statutory.68 Land administration in Indonesia is extraordinarily complex with an estimated 572 plus laws, regulations, and other documents relating to land and formal government processes.69 Under the colonial system, land laws were governed at once by both the colonial civil code, and rights based on adat law. The 1960 Basic Agrarian Law (BAL) was introduced to overcome this dual system of administration. The law revoked all prior regulations relating to land, soil and water and effectively gives control of all lands to the State. It also recognised adat law, subject to implementing regulation, but subjugated adat law to national and state interests. The BAL recognised six different types of land rights: ownership (Hak milik); exploitation (Hak guna usaha); building (Hak guna bangunan); use (Hak pakai); lease (Hak sewa); openingup land (Hak membuka tanah); forestry or forest management (Hak memungut hasil hutan). Hak ulayat (or adat legal land rights) is informally recognised, subject to State legislation or regulations, but it is not registrable alongside other forms of tenure.

Problems were encountered when implementing regulations of the BAL failed to emerge; or, when regulations were drafted, they were contradictory to or overlapped adat laws. As a result, the Government has attempted to recognise customary land provided that the following criteria are present: Land under the ownership of a recognised adat community; Land with defined and understood boundaries; and The community is recognised and functioning under adat law principles. In practical terms, the validity of indigenous or customary tenure by local communities is determined at the district level and by district-level laws.

Land Titling
There are an estimated 80 million parcels of land in the country, but in the 45 years since registration of land rights was established under the Basic Agrarian Law, only 30 million of these have been registered.70 The recording of land rights takes place either through private conveyancing or through the registration of deeds. Private conveyancing of titles is unregulated and informal. However, private conveyancing is considered a legal form of transfer under adat law, based on the exchange of currency (rather than central registration). Conveyancing requires witnessing by two people. The informal nature of private conveyancing creates significant risk of fraud; there is no central register to assess the validity of title documents. Formal conveyancing takes place through the registration of titles deeds at the National Land Office. The registration of deeds is a negative system, i.e. the object of the system is not to create a comprehensive land registry, but to ensure that overlapping claims do not occur and that the property rights of legitimate owners are upheld.

68. ASEAN Law Association (2005), Indonesian Legal System, Legal Systems in ASEAN, Ed. Prof. Dr. Paulus E. Lotulung, SH and Susanti Adi Nugroho, SH., MH 69. Hamid Yusuf. Land Administration System In Indonesia. 17th AVA Congress Siem Reap, Cambodia

70. Erna Heryani and Chris Grant (2004), Developing Asia and the Pacific - The World Bank Financed Land Administration Projects and Principles. PS4.3 Land Administration in Indonesia.

Manufacturing Dissent 25

caSE StuDy: Social conflict in inDonESia

Tenure on forested land


Around 70 per cent of Indonesian land is under the control of the Ministry of Forests, which is classified as forested land and therefore falls under the Basic Forestry Law (BFL), as opposed to the BAL. There are no rights in state forest areas (Kawasan hutan) under the BFL. No individual or customary property rights can be registered on land classified as forests. Instead, commercial utilisation permits are granted for forest land, such as HPH concessions (selective forestry concessions), HTI (plantation concessions), HTR (community forest concessions). The utilisation permits do not grant property rights, but utilisation rights. Adat communities can apply for HTR rights through a documentation process. The Government will allocate HTR concessions for social or village forestry once the adat community is recognised as functioning by provincial authorities. This is then passed to the Ministry of Forestry, which will approve adat or customary forest use within the HTR concession. This does not, however, provide for customary rights over land; communities are subject to the same legal constraints as private sector actors or individuals.

High-profile disputes took place in Muara Tebo, Mesuji and Pulau Padang. However, the most prominent of these took place in an area known as Register 45 in Mesuji District in Lampung. One fatality occurred when local populations clashed with security officers in late 2011. The disputes were portrayed by some members of the media as a straightforward case of private sector interests a plantation company PT Silva Inhutani Mas - running roughshod over local populations. To add to this, a number of claims were made that beheadings had taken place; however, video evidence of beheadings had been shown to be fabricated. However, the clashes particularly in Tuga Roda have actually been the result of long-standing disputes over tenure rights to the land in the area. A total of 43,100 ha had been granted to Silva Hutani in the Register 45. The land had originally been granted under Ministry of Forestry regulations in 1997 for forest plantation development. Although the land was granted, Silva Inhutani had not yet developed the land; it then became subject to widespread squatting. A number of squatter communities were evicted at various points between 1997 and 2007. This included a local community the Megow Pak which commenced encroaching upon the land in 2005, and were evicted in 2007. The Mesuji area was made into an autonomous regency in 2009. According to news reports, a local indigenous community the Megow Pak had commenced selling off plots of land for between USD500 and USD1000 per hectare. Subsequently a large number of domestic migrants from Bali and other Indonesian islands travelled to Mesuji to purchase land. These land transactions were found to be illegal; rights to the land had already been allocated to Silva Inhutani. In addition, as indicated above, no tenure rights can be established on land classified as forest; the land belongs to the State. News reports indicate that more than 12,000 ha had sold or illegally occupied. As the company was overwhelmed, it requested assistance from police and security forces to enforce its property rights. Similarly, squatters who believed they had purchased clear rights to the land, attempted to defend their property rights. While activists were keen to place blame on the private sector and have labelled the case as a land grab where free, prior and informed consent had not been obtained, the case has been shown to be significantly more complex.

Customary Tenure Practices in Indonesia


NGOs have generally demanded that all tenure should revert to customary tenure in Indonesia. Customary tenure has been a common feature of environmental campaigns against agriculture, forestry and mining in Indonesia. Customary tenure practices differ between communities. The key decision-making point in most customary access decisions is often the village chief or village elders. The definitions of communities, land that falls under communities (formal or informal), and resource access is further complicated by current and historic high levels of domestic migration. Migration in Indonesia can be either voluntary or state-sanctioned (transmigrasi). The sheer numbers of domestic migrants (state-sanctioned or otherwise) and the highly informal tenure system in Indonesia has added immensely to social conflict over land.

case stuDy: LanD confLicts at Mesuji


Throughout 2010 to 2012, widespread publicity was given to land disputes across Sumatra. A number of campaign groups including Greenpeace and Friends of the Earth International seized upon these disputes, exploiting them to protest against private sector investments in agriculture and forestry across Sumatra.

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Manufacturing Dissent 27

8. concluSionS anD rEcommEnDationS


This report has demonstrated that the concept of free, prior and informed consent (FPIC) is yet to be fully developed, and consequently needs further development if it is to be implemented beyond its current framework within the UNDRIP and other multilateral organisations. It has also demonstrated that the enthusiasm of environmental campaign groups to deploy FPIC as a campaign tool is inherently dangerous. It potentially undermines legal frameworks within sovereign nations, undermines the rule of law, and decreases certainty in land tenure. This has demonstrably negative economic and environmental impacts. FPIC was originally designed so that sovereign governments would respect the legal structures and tenure claims of indigenous communities. It was not designed as a tool for environmental campaigners as a veto right against private sector developments they find objectionable. With this in mind, World Growth makes the following recommendations: FPIC must be context-specific and not general. FPIC requirements should be based on the legal context of the relevant nation states. NGOs effectively group indigenous people and local communities together, regardless of their unique contexts and development requirements. NGO demands for generalised FPIC standards have the potential to cause adverse development effects and hinder the development of indigenous people. In many cases, such as PNG and Brazil, there are adequate provisions to protect indigenous people under the national legal frameworks. Generalised NGO demands for FPIC therefore represent an attack on the national sovereignty of countries who have already established robust frameworks to deal with indigenous populations. FPIC must involve dialogue between governments and indigenous people. Businesses and NGOs must comply with these arrangements, but should not be responsible for establishing them. The consent process must be established between legitimate indigenous landowners and government (who maintain governance or sovereignty over the territory). Thus FPIC must be negotiated between indigenous communities and states. In cases such as PNG, businesses negotiate business leases with governments, and have no direct responsibility to gain the consent of landowners. Attacking businesses for failures on behalf of government processes is counter-productive. Businesses should be assessed against their compliance with the terms of leases, laws and regulations. Legitimate operators must comply with their legal requirements, but they should not be expected to negotiate standards, as it is beyond their scope. Governments must reform tenure arrangements. In many cases where indigenous peoples have suffered from encroachment or land alienation, it is a result of complex or insufficient tenure arrangements. Land encroachment by non-indigenous local communities - rather than large scale development projects - is often the major cause of indigenous grievance. Thus governments and NGOs should work together to identify and resolve tenure issues, rather than imposes general FPIC requirements on legitimate development projects. ENGOs must operate with a greater level of transparency. NGOs often claim to represent the interests of indigenous peoples. In many cases, especially in the contexts of large international NGOs, there claims cannot be substantiated. NGOs must themselves operate with transparent consultation and governance mechanisms to ensure that they are representing the demands of indigenous people, rather than their own agendas. Governments and NGOs should establish effective, transparent and independent ombudsmen and review processes, to ensure campaign groups operate in a transparent and ethical manner. ENGOs must review FPIC policies. NGOs should review their own policies on FPIC to ensure consistency with nationally established definitions and frameworks, as well as international legal and institutional frameworks where they are legally binding. ENGOs should not use FPIC to halt development. FPIC is currently being used by ENGOs as a means for halting development projects. This can fail the genuine interests of indigenous communities, and it can also harm long-term social economic and environmental development in developing countries. Businesses should comply with national laws. Businesses should comply with the laws of the jurisdictions in which they operate, first and foremost. Under most legal frameworks, it is the responsibility of governments to establish and protect indigenous rights. It is not the responsibility of business to comply with an overarching concept of FPIC that has no legal recognition in many jurisdictions. However, businesses should use FPIC as a means of risk management in their international operations where appropriate.

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rEfErEncES
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Goldstein, M., & Udry, C. (2008). The profits of power: Land rights and agricultural investment in Ghana, Journal of Political Economy, 116(6), 9811022. Gosarevski, S., Hughes, H., and Windybank, S. (2004). Is Papua New Guinea Viable?, Pacific Economic Bulletin, Vol. 19, No. 1 Gosarevski, S., Hughes, H., and Windybank, S. (2004). Is Papua New Guinea viable with customary ownership?, Pacific Economic Bulletin, Vo. 19, No. 3 Greenpeace (2004). The Untouchables: Rimbunan Hijaus world of forest crime and political patronage, Amsterdam

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About World Growth World Growth is a non-governmental organization established with an educational and charitable mission to expand the education, information and other resources available to disadvantaged populations to improve their health and economic welfare. At World Growth, we embrace and celebrate the new age of globalization and the power of free trade to eradicate poverty and improve living conditions for people in the developing world.

Our Philosophy World Growth believes that helping the developing world realize its full potential is one of the great moral aims for those of us fortunate to live in the wealthy developed world. We also believe that a misdiagnosis of what ails the underdeveloped world has yielded policy prescriptions that have been useless or even harmful to the worlds bottom billion. World Growth believes that there is enormous untapped human and economic potential around the world. In order to unlock that potential, and allow the poorest of the worlds poor a better life, it is necessary to realize changes in institutions and policies that promote growth. Instead of aid and handouts, what the populations of developing countries need are social and political institutions and infrastructure that foster productive economic activity and generate robust economic growth. These include, but are not limited to, property rights and protections, the rule of law, free markets, open trade, government accountability and transparency. For too long, well-meaning governments, aid agencies and others have promoted policies that fail to address the true roblems that afflict poor societies. As a result, too many people around the globe remained locked in pre-modern conditions where their talents and inherent capacities are shackled. The people of the developing world are fully capable of helping themselves to a more prosperous existence. The path to prosperity does not begin with handouts from the West. Instead it requires identifying the genuine obstacles to growth and highlighting paths to reform that will yield sustainable and lasting change.

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