Agri-business land grabs forcing poverty in millions

September 28, 2011
Gerry O'Kane
Palm oil estate in West Kalimantan

International charity and pressure group Oxfam has released a report highlighting the problems that a modern “land rush” is bringing to poor communities. Fingers have been pointed at palm oil corporations and agribusinesses as being primarily responsible for many of the land deals that have left local communities without homes or livelihoods.

The report, Land and Power, says that as many as 227 million hectares have been sold, leased or licensed in large-scale land deals since 2001, mostly by international investors. The report acknowledges the lack of transparency and the secrecy that surrounds these deals makes it difficult to get exact figures, but says it has checked 1,100 of these deals amounting to 67 million hectares.

While the report concentrates on abuses in Africa, it also highlights serious problems in Indonesia. As elsewhere Oxfam says that the rush for land should be called “land grabs” since the rights and needs of the people living on the land are ignored, leaving them homeless and without land to grow enough food to eat and make a living. Even worse, those objecting to the deals often suffer violence and imprisonment with the tacit agreement of corrupt administrations.

The group calls on governments and international organisations to be vigilant when supporting projects and to ensure the local populations are protected from exploitation. Oxfam pointed out that pressure on these sectors could readdress local injustices and conglomerate muscle.

In 2005 PT. Agronusa Investama a subsidiary of the Wilmar Group, was accused of land grabbing, extensive forest clearing, and widespread human rights abuses in West Kalimantan. In 2007, community groups lodged a formal complaint with the International Finance Corporation's complaint redress mechanism through its independent Compliance Advisor/Ombudsman (CAO).

As the IFC had invested in the Singapore-based Wilmar’s downstream operations, it investigated and found that Wilmar acknowledged that it had developed community land without those communities’ free, prior, and informed consent, and that this (as well as other issues raised) needed to be resolved. Its pressure brought compensation and it maintains a watchful eye on the project.

While the Wilmar example showed positive outcomes can happen, Oxfam believes land reform can work. However while it argues that land reform projects in Taiwan, Indonesia, Malaysia, Thailand, and China have worked, the continuing problems in Indonesia and even riots over land grabs for property development in China, show there are flaws in state systems.

The report says these sorts of land-grab issues were likely to get worse with increasing pressure on water resources and food security. Even non-food crops like biofuels compete for land.

Palm oil

It maintains that there are many unresolved land conflicts in Indonesia that have primarily been the result of palm oil company activities. It highlights the case of 11 villages in the Tayan Hulu district in West Kalimantan. In the mid-1990s a Malaysian/Indonesian palm oil joint venture company named PT. Menara AlfaSemesta (PT. MAS) began a project releasing villagers from their land on a 35 year lease. The deal included schools and hospitals and land set aside for local use.