How society regulates ownership of land, fisheries, and forests has wide ranging implications. It affects food cultivation and distribution, social and political arrangements, and economic opportunities. Historically, rights over land and natural resource management were considered ideosyncratic and inherently local matters. Yet as a consequence of globalization, they are increasingly taking on international aspects.
In response to these trends on 11 May, members of the Committee on World Food Security endorsed its Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. While the Guidelines are not binding international law, they represent the considered views of a range of constituencies and will likely influence state and business practices.
The Guidelines were developed under the auspices of Committee on World Food Security to respond to concerns about increasing food insecurity caused in part by weak land tenure rights. Drawing on existing international law and human rights instruments, they represent the most authoritative international framework on land tenure governance to have emerged to date.
The Guidelines constitute the sixth voluntary code that the UN Food and Agriculture Organization has adopted in diverse areas such as fisheries, pesticides, and fire management.
The instrument was both exhaustive in terms of process and length. From 2009 to 2010, FAO convened 10 regional, one private sector, and four civil society consultations, which informed the development of the draft document. In all, more than 1000 people from 130 countries participated in the consultations. The resulting 44 page text leaves little uncovered. While most of the provisions address states, a significant number relate directly to the private sector.This article provides an overview of the elements of the Guidelines most relevant to investors. With agricultural land increasingly becoming an asset class, novel social responsibility questions have arisen. As the disparaging term “land grabs” often used in relation to the subject suggests, these debates have frequently been heated and political in nature. Fortunately, the Guidelines provide some objective standards against which to consider the claims of different actors. While they do not seek to eliminate the emerging global market for land and natural resources, they do envisage a more regulated one than has existed until today.
Overview of the Guidelines
The most relevant issues for investors concern the basic principles applicable to land tenure, recognition of customary land claims, the nexus with the UN’s Protect, Respect, and Remedy Framework (Ruggie Framework), and standards and procedures involving large scale land transactions.
By proscribing land tenure in an international instrument, the Guidelines have brought about a significant innovation in global governance. To avoid the challenge of devising a definition that could encompass tenure in all its varieties, it is agnostic on the definition as such, instead relying on relevant national definitions. The Guidelines purport to be limited to tenure governance, which connotes a more procedural understanding, yet the substance of land tenure rights is very much implicated.
Main Objectives and Principles
The Guidelines claim four main objectives. First, they seek to improve tenure governance by providing guidance and information on “internationally accepted practices” for the management and control of land, fisheries, and forests. Second, they seek to bolster the
legal and organizational frameworks regulating tenure rights over those resources. Third, they seek to enhance transparency and improve the functioning of tenure systems. Lastly, they aim to enhance the capacity of all persons and institutions concerned with tenure governance and promote cooperation between them.
These objectives are advanced by five general principles, which have far reaching implications for the investment climate for land and natural resources. These include the need for states to:
• recognize “all legitimate tenure right holders and their rights”, meaning that states must “record and respect” rights
• “safeguard legitimate land tenure rights against threats and infringements”, specifically involving arbitrary loss of rights and forced evictions that are inconsistent with national and international law
• promote and facilitate enjoyment of tenure rights, including persons’ abilities to engage in transactions concerning those rights
• ensure access to justice through judicial or alternative dispute resolution and prompt enforcement enabling just compensation, and
• prevent tenure disputes, violent conflicts, and corruption, for which the other principles and instruments such as the UN Convention on Corruption, should presumably suffice.
The Guidelines define a separate principle dedicated to the responsibilities of business. In addition to the general obligation to respect human rights and legitimate tenure rights, businesses must:
• act with due diligence to avoid infringing on human rights and legitimate tenure rights
• apply appropriate risk management systems to prevent and address adverse impacts on human rights and legitimate tenure rights• cooperate with relevant dispute resolution systems “where they have caused or contributed to adverse impacts on human rights and legitimate tenure rights”
• identify and assess actual or potential impacts on human rights and legitimate tenure rights.
At the same time states should enable judicial remedies for violations of human rights and legitimate tenure. Similar to the OECD Guidelines on Multinationals, home states have responsibility for ensuring that businesses are not involved in abuses of human rights and legitimate tenure rights.
One of the Guidelines’ key innovations is their incorporation of human rights standards. By affirming and integrating the human rights obligations of business, these principles can be read as effectively adding a land tenure component to the existing obligations defined under the Ruggie Framework. They thus contribute to the progressive development of global business responsibility standards.
Legitimate Tenure Includes Customary Claims
A linchpin of the overall system is the notion of “legitimate tenure rights”. Since tenure is not defined by the Guidelines, what constitute legitimate rights will be a function of national law. Nevertheless, the Guidelines do state that “where indigenous peoples and other communities with customary tenure systems have legitimate tenure rights to ancestral lands on which they live, States should recognize and protect these rights.” Given the diversity of customary conceptions of land and ownership, this element of the Guidelines could have much wider effect than the recognition of existing formal legal claims.
Customary land tenure is a critical issue in many developing countries, where indigenous and other communities often hold property without formal title. The challenge for investors is to be assured that counterparties have clean title to land offered for sale. The Guidelines seek to address this issue in part by
calling for consultations between indigenous groups and other stakeholders in advance of transactions. Among the changes the Guidelines may drive is a move to formalization of tenure.
Controlling land investment
Aside from these provisions, the Guidelines advance other standards and processes that specifically concern investors. First, investors should recognize and respect national law and legislation and rule of law, and not contribute to food insecurity or environmental degradation. Second, states should strive to have all parties involved in land investments conduct impact assessments to ensure that existing rights are not compromised by transactions. Third, states should impose safeguards on large scale land acquisitions. Finally, “states and affected parties” should engage in effective monitoring of the implementation and impact of agreements involving large-scale land acquisitions and take corrective action to either enforce agreements or protect tenure as well as create mechanisms where aggrieved parties can request such action.
Although not defining “large scale”, the Guidelines suggest that to protect legitimate tenure, states could among other things, define ceilings above which transactions are prohibited or alternatively require some sort of regulatory approvals, such as parliamentary assent. In addition, as alternatives to large scale transfer of ownership rights to investors, states should consider a range of production and investment models, which encourage partnerships between investors and local tenure rights holders.Together applying these standards would impose a series of new procedures both before and after land acquisitions occur.
A further consequence is the potential expansion of liability, through the creation of new dispute resolution mechanisms and measures to promote legal aid for affected populations. As the principle for effective remedies suggests, states should consider ways of returning parcels of land to persons who suffered the loss of land, subject to domestic law and standards. For states that follow these provision, investors should be on notice that failure to ensure clear title before a transaction could be very costly.
Overall, many specifics remain uncertain. Translating these measures into practice will involve significant interpretation and require sharing of collective experience.
Assessing the Guidelines’ Importance
Despite encountering significant practical and political obstacles, the Guidelines achieved a degree of consensus among a wide range of stakeholders. The scope of consultations FAO organized holds some important lessons for other global governance processes. It is clearly a first step and whether this soft law voluntary instrument ultimately ripens into hard law such as a treaty remains to be seen. For the responsible investment community, this framework sets useful parameters and reduces ambiguity on a topic of growing importance.
Thomas F. McInerney is an attorney in private practice, Adjunct Professor of Law at Loyola University of Chicago School of Law, and Director of the Treaty Effectiveness Initiative.