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CDC releases a new report on the legacy land issues facing agribusiness

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CDC releases a new report on the legacy land issues facing agribusiness

27 June 2016,15:30

CDC and DEG have collaborated on a new report which provides guidance to investors on managing legacy land issues in the agribusiness sector. Legacy land issues are a particular challenge in emerging markets, especially where details about historical acquisition / lease arrangements may be uncertain and baseline studies are weak or absent.

Legacy land issues can create significant risks for operators / investors, including reputational damage, disruption caused by community protests and additional costs to secure and maintain tenure (legal / compensation costs and demarcation studies, among others). Meanwhile, effective management of legacy land issues can provide notable advantages to the operator / investor, such as a stronger licence to operate, potentially increased productivity from outgrowers and greater certainty about business continuity. Similarly, local communities may benefit from increased livelihood security and economic development.

The guidance note complements existing international standards – such as the IFC Performance Standards – which do not provide significant coverage of legacy land issues. However, the guidance does not aim to create a new standard. Instead, the report provides practical guidance based on the experience of relevant stakeholders.

The report identifies two key strategies for resolving legacy land issues:

  1. Assessing historical land acquisition and – where compensation was inadequate – providing additional reparations.
  2. Acknowledging with communities that historical land claims are complex and it may not be possible to provide fair or effective compensation. As a result, the company and community work together on community development plans.

The guidance note then outlines tools and advice for implementing each approach (which are not mutually exclusive). Furthermore, the report provides advice on organisational arrangements, possible moratoriums on planting, monitoring and evaluating community programmes, and the ultimate closure of community benefits agreements.

Click here to read the full note: A guidance note on managing legacy land issues in agribusiness investments.

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