Issues around Land Rights: the Case of EcoEnergy Project

To be presented to the World Bank Conference on Land & Poverty

By Josaphat Raymond Mshighati

- ActionAid Tanzania has been working in Bagamoyo since 2004.

- Areas of focus & key achievementsWomen rightsEducationHIV/AIDSGovernance and accountabilityAgriculture and Food SecurityLand accountability project

Our work in Bagamoyo

During land hearings, communities raised their concerns on:- An indefinite notice of displacement- Prohibition to build permanent structures and plant

permanent crops - Ban on making charcoal- Residents’ unawareness of the asset valuation

procedures and their entitled compensation- Village land incorporated into the project land.

As part of its programme work, ActionAid Tanzania needs to assess if these worries are legitimate or not

Community worries on land lease to EcoEnergy

METHODOLOGY

Issues for Research

- Consultation process- Displacements, resettlement and

compensation plan- Financial benefits for the company- Project itself and outgrower scheme- Impacts of the project

1. Desk review: secondary data

2. Focus Group Discussions (FGD): with affected farmers in Fukayosi, Matipwili, Makurungi villages as well as the Gama Kitame hamlet of Magomeni ward. 3. Interviews: village chairpersons (Matipwili and Fukayosi), hamlet chairpersons (Bozi and Kitame), District Commissioner (Bagamoyo), EcoEnergy Management, IDC, Kilombero Sugar Company, former employees of Razaba Ranch, lawyer of Gama Makaani villagers…

4. Public events organized by government and EE

Methodology – Data collection

Methodology: samplingVillage/Area/Individuals No. of People

1. Gama Makaani 40

1. Bozi FGD 24

1. Kitame FGD 31

1. Matipwili FGD 23

1. Fukayosi FGD 8

1. Gobole 8

1. IDC office 7

1. Gama Makaani Lawyer 1

1. Biga West 8

1. Village Extension Officer-Matipwili 1

1. Gama Makaani CCM-Chairman 1

1. District Commissioner 1

Total 153

Methodology - Data validation

1. Written feedbacks by EE

2. Meetings with local and national CSOs, including local authorities.

3. Meeting requests with Ministry of Land, Tanzania Investment Center, Bagamoyo local government authorities.

FINDINGS

• The performance contract (i.e the investment agreement between EE and GoT) is not available: no information on benefit sharing and taxes to be paid by EE

• No binding commitments about activities and employment, but only estimates. the company has no legal obligation to follow up on any of its

promises and communities or the GoT have no legal recourse in case:

Jobs are not created No fair working conditions and salaries Low prices are paid to outgrowers Smallholder farmers do not form part of the outgrowers If EcoEnergy decides to change the use of land

Transparency and binding commitments

EE says the project will inject USD 45 to 50 million annually to the local economy:

- USD 7 million from direct jobs- USD 13-18 million- gross income for outgrowers- USD 25 million from indirect jobs

- $7 million means direct employees salaries will be $3,000/year. But most jobs will need casual labourers and the minimum agricultural wage is $528/year.

- For outgrowers, EE estimates it will pay $45/tonne. But Kilombero currently pays $35/tonne. (Consider also the current crisis) The actual figures as estimated in this study can be

between USD 8.55 – 11.5 million a year.

Questionable financial benefits

- It is stated that the GoT will have 25% ownership interest in the project. However, the reality is for the first 18 years, the GoT share will be only 10%.

- The 25% stake will begin in year 19…- EcoEnergy has been granted a 10 year tax

holiday, but it doesn’t mention it in most documents, only stating that it will pay 30% corporate tax.

Government Revenue

- The scheme is considered one of the principle benefits of the project for communities.

- A loan of approximately $800,000 per company equivalent to $16,000 per outgrower is unrealistic

- The loans could be more risky if the small-scale farmers will use their land as collateral, or if the banks are allowed to seize the outgrower companies in case of default

- High interest rates from banks may affect out-growers returns

- Affected communities were not supplied with details of the out-grower scheme and how it could benefit them.

Viability of the Out-grower Scheme

- BIGA WEST: in 2011 Fukayosi agreed to lease the land to EcoEnergy. However, evidence suggests that this land belongs to Matipwili and they are not prepared to give it to EcoEnergy.

- The state of Gama Makaani land is not clear. The case is in court.

Village Land incorporated in project land

Tirana Declaration (2011), endorsed by the International Land Coalition (FAO, IFAD, UNEP, World Bank, IFPRI, CGIAR, CSOs…).

Land grabs are acquisitions or concessions that are one or more of the following:- Violation of Human Rights,- No Free, Prior and Informed Consent,- No thorough impact assessment,- No transparency and binding commitments,- Not based on democratic planning.

Analysis framework

- Consent: people affected by the project were not offered a choice whether to be resettled or not.

- Prior: decision to start the project not based on communities consultation but on an agreement between the company, local and national authorities, and inter-governmental organizations. The certificate of occupancy was given to EcoEnergy by the GoT before even the key details of resettlement were resolved.

- Informed: key information about the project, resettlement, compensation and the out-grower program were not transparently delivered to the affected communities. E.g; PAPs did not know what they were entitled for compensation, Performance contract is not available…

Free, Prior and Informed Consent

- No meaningful collective participation of affected communities in the planning of: - The project, - The outgrower scheme: issue of costs and loans, that are

highly risky for the most marginalized farmers- Resettlement action plan.

Democratic planning

RECOMMENDATIONS

- Suspend the project and conduct a new process of consultations that respect the standard of free, prior and informed consent

- Appoint an independent mediator to address the claims of the people who moved into Gama Makaani after the cut-off date.

- Make public the project’s Performance Contract and ensure that it contains binding commitments on the financial and social benefits.

- Subject EcoEnergy’s claims regarding the financial benefits of this project to a process of independent scrutiny.

- Above all, seek to promote land management systems and models that respect the legitimate land tenure rights of users

To the Government of Tanzania

- Comply with the above recommendations. - Make public all financial obligations,

projections and safeguards to affected communities and those who may be engaged in the outgrower scheme.

- Make public the land use and development plan developed by a consultant hired by EcoEnergy for Matipwili.

To EcoEnergy

- Make public loan details for this project.- Establish an adequate mechanism to

monitor this project.

To African Development Bank and IFAD

Welcome for discussion