Spotlight on the head of DEG’s Sustainability Department

You have published guidance on legacy land issues together with the sustainability experts at CDC. What does this aim to achieve?

This guidance note provides practical support for companies purchasing or leasing land already in use for agricultural purposes. It is based on the experience of companies that ultimately found good solutions to long-standing unresolved legacy land issues. Particularly in developing countries, it is not uncommon that land rights are unsettled or that the affected communities and local population were not sufficiently involved in the process.

Is the guidance note only aimed at companies and investors?

No. It also helps communities and the local population to define their rights and to identify community development and business opportunities.

In your opinion, what is particularly important when clarifying legacy land issues?

Before companies lease or acquire land used for agricultural purposes, they should carefully examine whether there are third-party claims to this land that may not have been adequately taken into account or compensated by previous owners or lessees. In African countries, for example, it is essential to check whether there are traditional land use systems alongside official administration and whether this could give rise to additional obligations for the company.

Our experience shows that forthcoming, open communication with the affected local population ahead of the investment and a clear agreement on the how the company and the community will communicate and cooperate in the future are key. Companies already in production must be open to complaints or any conflicts that arise, address these constructively in dialogue, acknowledge legitimate claims and try to find solutions.

What are some examples you are currently working on in this context?

We have an investment in the Democratic Republic of Congo, for instance. Several development finance institutions are investing in the redevelopment of oil palm plantations that were established many years ago to produce a staple food for the people here locally, replacing expensive imports. PHC employs almost 4,000 permanent and over 5,000 seasonal workers in a remote, less developed region of the country.

The farmed areas are leased from the government. PHC took over this land from a company that had operated here for a long time. The titles for this land must be renewed regularly. The company is working hard to improve and modernise this process with the involvement of the responsible local authorities and the community. This is certainly an ambitious endeavour in a country dominated by war, and one of the poorest in the world. We believe that this work is necessary and worthwhile.

Another example is in Sierra Leone, where we invested in an agribusiness together with other development finance institutions. Also for this investment ("Makeni"), the company involved, Addax, organised the leases sensitively and in dialogue with the local authorities and the community. The investment has had an extremely positive impact on local food supply, farmer education and community infrastructure. The development finance institutions have also contributed specifically to this.

Unfortunately, the project has not gone as well as hoped recently, mainly due to the Ebola epidemic, which hit Sierra Leone and the region hard. With our support, Addax made a commendable effort in fighting the virus. The project was reviewed in 2015 and our loan was subsequently repaid, meaning that DEG is no longer an investor.

The company recently announced that the project will continue with another investor, for which sustainable community development is also an important focus area. We hope that these initial successes can be built on and will approach the new investor to share our experiences and recommendations from the project.

Martin Geiger has managed DEG’s Sustainability and Corporate Governance Department since June 2012. He previously worked at WWF for many years.