Kaitlin Y. Cordes, Tehtena Mebratu- Tsegaye, and Sam Szoke-Burke Is this really benefit-sharing? Understanding current practices around community-investor agreements tied to land investments Kaitlin Y. Cordes, Tehtena Mebratu- Tsegaye, and Sam Szoke-Burke

Starting point Guidelines urge greater benefit-sharing and participation Communities and investors more frequently interacting/signing agreements? Little analysis on actual community-investor agreements linked to land investments for agriculture or forestry projects

Legal support gaps Research for this paper undertaken in context of developing resources for communities in partnership with Namati, and as part of series of projects on legal support gaps around land investments that is funded by UK DFID

Research Analyzed 42 community-investor agreements related to land investments for agriculture/forestry projects Complemented by desktop research, reviews of investor-state contracts, and discussions with stakeholders working with communities

Agreements in context Land investments governed by complex set of legal frameworks; community-investor agreements must be considered in this context Multiple factors influence types of contracts/agreements entered into in context of land investments

What types of agreements are we talking about? Community-investor agreements = contracts or agreements entered into between communities (or their representatives) and an investor company or individual investor seeking to carry out a land investment on or near the community’s land (either individually or communally owned) Agreements reviewed for paper are diverse in objectives, functions, detail Spectrum running from “pure lease agreements” to “development benefits for cooperation”

General observations Underwhelming … Clauses purporting to secure benefits for community are often vague, caveated, or lack detail to be truly enforceable or operationalized

Consultative processes

Lease and other payments Very low lease rents … Some royalty provisions Rent payment mechanisms – no details, or problematic details

Social benefits and infrastructure development

A closer look Not many details Leaving it to the company’s discretion: “where it is necessary for implementation of the project” “where practicable” “reasonably assist” Etc Infrastructure primarily for benefit of companies

Other issues of note Water access referenced in around half the agreements, but important details often left out Breach of agreement and dispute resolution Confidentiality clauses

Recommendations - general Unless conditions right, communities should consider not entering into a community-investor agreement, Host governments and companies could consider implementing programs and strategies to make legal and other support available to communities, in ways that guarantee the independence of such support.

Recommendations – drafting Communities and companies should ensure that the legal status of the agreement is unequivocally clear. Communities and companies should ensure that agreements are drafted in clear language, with detailed and time-bound obligations. Companies should not pass off as “benefits” what they are already required to deliver. Document any consultative and participatory processes that were actually carried out before the negotiation of any agreement.

Other recommendations Compensation Agree on payment mechanisms that ensure that revenues will be spent in ways that directly benefit community members Work towards agreements that include adequate payments and compensation, and consider including profit-sharing arrangements Per other issues of note, ways to address water use/impacts, avoid problematic dispute provision or confidentiality clauses, etc Agreement should include incentives for company compliance and mechanisms for enforcement if company breaches provision

Summing it up Community-investor agreements hold potential … … but current practices are failing to realize this potential

Thank you! kaitlin.cordes@law.columbia.edu