Mozambique: Will Giving Back Land Undo the Harm Done By 'Ethical Investment'?

"Ethical investment" was the fashionable word 15 years ago and there was a belief that growing trees in Africa would be both developmental and profitable. Since then Mozambicans have been paying a high price for "ethical" forest investment. By 2018 the Norwegian company Green Resources' land grab had given it 360,000 ha it finally admits it cannot manage - in Niassa (102,000 ha), Nampula (125,000 ha) and Zambezia (135,000 ha). Now it proposes to give most of the land back to communities it was taken from.

The Global Solidarity Forest Fund (GSFF) was founded by Norwegian and Swedish churches in 2006 and the next year was promising an incredible 13% real rate of return on ethical forest investment in Mozambique. The 2007-2008 crash was only weeks away. Green Resources (GR) was established in 1995 but only moved into Mozambique in 2008, backed by the Finnish and Norwegian development banks, Finfund and Norfund. Both GR and GSFF were disasters from the start with on-going conflicts with local communities. In Niassa local people complained to the Prime Minister during a May 2010 visit. GR took over GSFF in 2014 and there were several reorganisations, which only made matters worse.

Finally, last year Finfund and Norfund took control of GR, with a another management reshuffle - a Dutch forestry manager Hans Lamm has taken over as CEO (Chief Operating Officer) and Mozambique managing director Arlito Cuco has been side-lined to become "corporate affairs director". Headquarters was moved from London to Dar es Salaam.

Meanwhile, environmental NGO Livaningo reported (9 July) that after its campaigning the Nampula Public Prosecutor's office is investigating claims that GR took land and crops from 300 peasants and failed to pay compensation and implement social projects such as water and roads promised 10 years ago. Carta de Mocambique (15 July) says that 1200 families in Ribaue and Mecuburi districts are affected, and hints that bribes were paid to community leaders.

New CEO Hans Lemm admits the projects in Nampula and Zambezia have "not been very successful" and will "in all likelihood" be closed down and GR will concentrate on parts of Niassa. Can the land be handed back to communities that lost it a decade ago? This is not straightforward. GR has over 100 different parcels of land subject to different agreements, and there seems to be no list of what GR promised local communities, anst some of the promised schools and health posts could be expensive. Is GR still responsible for those pledges?

Some land has native or recently planted trees or buildings that might have some value. But other land had infrastructure destroyed but was then abandoned and is now covered by bush and will have to be cleared anew. If the first goal is to "do no harm", how is the land a decade ago to be valued? And if trees have some value, will there be training to manage them? European investors like Portucel, GSFF and GR insisted on huge tracts of forest managed by foreigners, yet Portugal and Finland have a long history of community and small farmer management of smaller forest areas, which could be adopted as part of the process of divesting of land.

Finally, in a now even more corrupted society, how can GR block land grabs by "big men" at local and provincial level, causing local people to lose their land a second time?

The GR website has a map of its properties in Niassa, showing land holdings likely to be divested and the very scatted holdings now planted or to be retained for planting:

There are no similar maps for Zambezia or Nampula.

The Malonda Foundation was set up in 2006 by the Swedish International Development Agency (Sida) with local partners in Niassa, with its own plantation and shares in Chikweti which it still holds. On Chikweti, Malonda and GR in Niassa see this 2018 article in New Internationalist: https://newint.org/features/2018/03/01/mozambique-land-grabs-chikweti and a  Mozambique Political Process Bulletin article eight years earlier (1 Feb 2010); bit.ly/mozamb

Green resources has withdrawn all of its past annual reports and its press release on the appointment of Lemm, and those documents and a shareholders list are not available. The catastrophic failure of these "ethical" forest projects has been subject to articles in this newsletter for more than a decade (numbers 160, 187, 190, 206, 227, 252, 260, 262, 274, 314, 329, 377, 418, 422).

President Starts Land Law Consultation - With Battle Over Privatisation Expected

A consultation on the revision of the 25 year old land law was launched Thursday (16 July) by President Filipe Nyusi. But the consultation will be controversial, with bureaucratic, political and international conflicts.

Land is the property of the state and cannot be sold or mortgaged, and Mozambicans have the right to "use" land, according to the Mozambican constitution (art 109). In his opening statement, Nyusi said this will not change. This has always been the Frelimo view, noting that landlessness from Brazil to the United State was caused by poor people mortgaging their land and losing it when they could not pay after a bad season. But the US and World Bank have been pushing for privatisation of land for decades. This will bring the greatest conflict. Mozambique had a 2007-2013 contract with the US government's Millennium Challenge Corporation (MCC), which unexpectedly was not renewed by the US, in part because land privatisation was a condition and, in the end, Mozambique simply refused. In December 2019 the MCC chose Mozambique as a country for a new programme, still being negotiated, and land privatisation will surely be demanded.

Frelimo is divided on this issue. Many in the elite have acquired land and they are holding it to sell if the law (and constitution) changes. Another issue is that the law does not distinguish between urban and rural land, and there is already a large illegal market in urban land as technically houses can be sold but not the land under them.

Finally, there is a potential bureaucratic/political confrontation. There are two ministries and two major donors, the US and World Bank, which will agree on promoting land privatisation but have competing projects now in different ministries. The USAID Speed+ project is to "improve the legal framework governing land administration." The World Bank $100 mn Mozland Project includes a component on revision of the national land policy, The largest part is for a Mozambican law firm to create a central register of land titles that have been issued. This has been criticised because it will quickly become out of date, and the real need is to capacitate district administrations to update and maintain a local land registry which would feed into a national register.

The President made clear the consultation will be done under the Ministry of Land and Environment. But Minister Ivete Maibase is junior in the Frelimo hierarchy. Celso Correia (see below), the most powerful person in government, had been Minister of Land, Environment and Rural Development, but in the new government he is heading a super-ministry, Agriculture and Rural Development - having taken Rural Development with him when he moved. He also took with him the National Sustainable Development Fund with $100 mn in World Bank money in the MozLand project; Maibase has kept the $37 mn USAID Speed+ programme, but it ends next month (August 2020). Thus both ministries have land registration and land law reform projects. But in the likely bureaucratic and political struggle, Correia has more political and financial clout than Maibase.

Chair of the ministerial Commission to Revise the National Land Policy which carrying out the consultation is Andre Calengo, a lawyer at land law specialist Lexterra who led part of the USAID Speed+ project, and is also a chief (regulo) in Messumba, Lago, Niassa. One member is Joao Carrilho, an former vice minister of agriculture and one of the drafters of the 1995 land law.

Contradictions Put A Progressive Land Law Under Pressure

Mozambique's land law has been widely praised and the May brief to the new commission is to maintain its "innovations and advances". Mozambique remains an overwhelmingly rural country and the land law has been hugely successful preventing landlessness and ensuring communities have adequate land for expansion. This has also reduced urban migration.

The structure of the law is built around the state having ownership of the land but issuing a form of occupation title known as a DUAT (Direito do Uso e Aproveitamento de Terra, Right to use and benefit from land). Occupants of land, both individuals and communities, have the right to occupy and register their land, and administer it in the manner they choose, thus recognising customary allocation and inheritance structures. Furthermore, the right is not just to land being farmed, but also fallow and pasture land, adjacent forests, and other lands used by the community. But the law also guarantees the rights of women (imposing some changes on customary inheritance and allocation systems).

The law also allows the allocation of land and granting of DUATs to outside investors, but only with local community approval. This has led to corruption and land grabs, as with Green Resources (above). Nyusi in his statement pointed to the problem of land where DUATs have been issued but the land is not being used.

There are a series of contradictions in various laws which need to be debated and resolved. Mining and forestry laws override the land law, and have priority. Thousands of families have been evicted from forestry, mining and gas concessions. The law is interpreted to mean that they must be resettled. But where? The land law means that good farmland and coastal fishing areas are already occupied by communities. The official mining cadastre (http://portals.landfolio.com/mozambique/en/) shows that in Cabo Delgado, the entire province has been allocated for mining, exploration, and national parks - leaving nowhere from those displaced by the gas project and ruby mines to go. Thus many communities with DUATs do not actually have secure tenure. So resettlement and overlapping laws urgently need consideration.

Transferability of land remains an issue. Officially farmland cannot be rented, but it often is. Urban housing and commercial land is commonly, and illegally, sold, leading to suggestions that urban and rural land should be treated differently.

But a core contradiction is between policy and law.  Mozambique's population has doubled since the law was passed 25 years ago, and there is more demand for land. Most land is still farmed with only a hoe and no machinery or fertilizer and the need is to intensify the use of land - but how is this to be done?

Donor and international lenders still impose an extreme free market "neo-liberal" model on Mozambican agriculture policy. Some push for privatisation of land and the use of mortgages for small farmers to obtain credit. Hernando de Soto's 2000 book The Mystery of Capital was very fashionable two decades ago and said the key purpose of land mortgages was that less successful farmers would lose land and be replaced by better farmers.

In order to protect their small farmers, the United States and Europe have various market guarantee and credit programmes, but these are not allowed in Mozambique. World Bank and other programmes try to solve the problem with all possible interventions other than intervening in the market and sharing risk with farmers - which the US and Europe has shown is essential. This central contradiction makes it almost impossible for peasant hoe farmers to intensify production and become family commercial farmers. And this will be the elephant in the room of the land law consultation.

Also important is that international agencies and donors continue to promote foreign investment. But there has not been extremely few successful large plantation investments since independence, neither state nor private; plantations do not work. Private investors, local and foreign, have succeeded in trade, processing, and smaller farms - typically under 300 ha. This suggests that instead of encouraging big investments, it makes more sense to promote better educated rural young people to become commercial farmers.

The book Chickens and Beer: A Recipe for Agricultural Growth in Mozambique by Teresa Smart and Joseph Hanlon can be downloaded, in English, free.

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