Existing and potential tools to regulate land access for investors in Madagascar

Beby Seheno Andriamanalina Research and Knowledge Management Officer – Land

ObservatoryPerrine Burnod

Phd Economist - CIRAD & Land Observatory 2014 World Bank Conference on Land and Poverty

The World Bank – Washington DC, March 25, 2014

Introduction

Between 2005 and 2010: + 50 companies look for more than 2 millions ha of agricultural land. Since then, 1/3 abandoned.

Despite the high controversies on Daewoo’s large-scale project and the political crisis, large-scale investments continue and, without debate, their promotion are still on the political agenda

The legal framework seems to be appropriate to regulate private investments: pro local rights land laws, investment and environmental laws

However, there is a lack of transparency and effective implementation and enforcement.

• Question : What are, beyond the laws, the interventions that can regulate large-scale investments in Madagascar?

• Objective: To analyze current and potential regulatory tools in Madagascar in the light of international experiences

• Methodology: capitalization case studies in agricultural sector in

Madagascar, multi-country comparative analysis (literature,

expertise of the Observatory team)

Advantages and limits of the existing regulatory

tools

InvestmentOne-Stop Office for investors (2006) : role of

promotion of investments rather than regulation

Investment law (2007): designed to ease investors access to land ownership… But absence of decree and competition with land administration

EnvironmentCompulsory Environmental Impact

Assessment for agricultural projects > 1,000 hectares.. But does not condition land access and questionable quality

Investment and environment laws

Land laws Since 2005 land reform: local/customary land rights legally

recognized and land management decentralized (landowner can apply for a land certificate )

=> State land services can only lease or sell to investors titled land in the name of the State or actually un-titled and unoccupied land

However, local/customary rights are ignored (more or less deliberately) to get some rents for the territory or extract unofficial advantages

New circular (in 2010) issued by land administration relative to land access > 2,500 ha : impose lease contract, recall the authority of the central administration and impose an initial evaluation

However, new process on land access: multiplies the cost for the investors rather than regulates (no selection of projects nor investors)

Non-binding regulatory tools

Soft laws: eg VGGT (CFS), RAI, etc,

CSR tools: social reporting, labels, norms and standards, etc.

Þ could be sometimes more efficient than laws (because affect directly companies’ reputation) but:

Þ in some cases, these tools are not enough precise on land issues to enable efficient implementation

Þthey are little known and little mobilized in Madagascar

Þ most of the companies and the public don’t pay enough attention on local reputation

Non-state actors (media, civil society, observatory, research centers) : key role in promoting transparency

all these actors: lack of meanspassive and resigned public opinion, little reaction of decision makers

media and civil society: limited freedom of expression, recent experiences in land issues

and lack of connection with rural areas for most of them

Non-state actors’ contribution to regulation

Propositions of regulatory interventions

in Madagascar

Open an enlarged debate on:

• The future for rural development : what business model to promote or prioritize design corresponding incentive tools

• Improving existing laws: define an upper-limit of land area allocated to investors ,define the limit beyond which the Council of Ministers or

parliament decision is needed, publish the list of investors authorized to prospect land, opte for a progressive allocation (conditioned on

effective cultivation and the respect of socio-environmental obligations),

limit the length of the lease (eg. to a 30 years period as practiced in recent years),

Legally recognize pastoralist rights.

Open an enlarged debate on:

• Selection of investors:

A better transparency through a public auction for land allocation

Screening & due diligence based on administration services and qualified experts to assess the financial capacity, the viability of the projects, the type of business models and the respect of social and environmental issues (especially respect of local land rights)

Publication of the selection criteria and the selected investors

Open an enlarged debate on:

• Identification of land areas for investors:

land bank managed by a para-governmental agency and gathering the state owned land .. but few success stories in other countries and the number of state owned land that are actually non appropriate is questionable ...

create a kind of mini land banks managed by the municipality

Local development plan designed at the municipality level, based on identified zones (not static and negotiated between different local actors)

Improve assessment of land uses and rights

Open an enlarged debate on:

• Improving local consultations and negotiations:

set a compulsory number of public hearings,

precise number of men and women that must

attend,

publish systematically the minutes,

involve a qualified third party to support

communities during negotiations,

let time to people to get informed and informally

debate,

make local representatives signatories of land

contracts, etc.

Open an enlarged debate on:

• Improving the means to enforce the stakeholder’s commitments:

publish contracts and requirements’ documents (current project on a web Platform of Land based Investments to publish the large-scale land investments),

transform all requirements’ documents in legally binding agreement and make sure they are specified (quantity, quality, deadlines)

promote synergy between State institutions, civil society, media and research organizations (such as Observatory) to monitor commitment and ensure appropriate funding

Thank you for your attention

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