Merina Lohani Sitoula M.Sc. Natural Resources Management Asian Institute of Technology August 2008 FINAL DEFENSE MAY 17, 2010.

Merina Lohani SitoulaM.Sc. Natural Resources Management

Asian Institute of TechnologyAugust 2008

FINAL DEFENSEMAY 17, 2010

An Assessment of Foreign Land Acquisition Processes in Four GMS countries: Case Studies of Impacts on Livelihoods in Cambodia and Lao PDR

Literature review

KII

Household survey

OBJECTIVES

To document land acquisition modalities and procedures, database and guiding laws/policies by foreign companies for large scale plantations of agri-business commodities in Thailand, Vietnam, Cambodia and Lao PDR;

To assess the socio-economic impacts of large scale agri-business plantations on the livelihoods of the local people in Laos and Cambodia on case study basis; and

- To assess the status of capital asset; and

- To identify the direct and indirect impacts of plantations on the livelihood of the local people/community.

To recommend strategies, based on the findings, which may overcome the gaps to supplement the processes of rural development.

SITE MAP OF LAOS

Henankouanin Company Ltd. (Chinese)

3,780 ha for cassava

SITE MAP OF CAMBODIA

Phu Rieng Company Ltd. (Vietnam)-4906 ha

Dong Nai Company Ltd. (Vietnam)- 1082 ha

LAND ACQUISITION PROCEDURES IN THE FOUR GMS COUNTRIES

Countries Laos Cambodia Thailand Vietnam

Ministries In-charge

NLMA/MAF/MPI

CDC/MAFF/MLMUPC

BOI/Ministry of Industry

IPB/Ministry of Planning & Investment

Modalities ELC and contract farming

ELC and contract farming

Lease Lease

Foreign equity in investment

100% foreign ownership allowed

100% foreign ownership allowed

Only 49% foreign ownership allowed

100% foreign ownership allowed

Environment certification

Required Required Required Required

Special specifications for foreign investors

Min. investment : US$ 20 million-Labor: 90% must be Laotian

-Min. investment :over US$ 1 million- Labor: Preference for Cambodian nationals

Min. investment : US$ 62500-Labor: Only experts/skilled foreign employees allowed

Capital investment limited to 30% only (foreigner)-Labor: High priority for Vietnamese

SOME KEY DIFFERENCES IN THE LAWS/POLICIES

Land acquisition through concession: Cambodia and LaosLand acquisition through lease only : Thailand and Vietnam

Concession/lease period: Cambodia -70 years; Laos and Vietnam -50 years; Thailand -30 years

100% ownership by foreigners: Not allowed in Thailand

Business License issued only after granting environment certificate in Laos ; issued after IEE report submission in Cambodia

Non-recognition of indigenous people in Laotian Law.

Only Laos strictly directs 90% Laotian labor force recruitment.

Thailand has comparatively high rate. Working hours for labors is comparatively less in Laos.

Laos is venturing into communal land titling while Cambodia is giving Social Land Concessions

Facilitating factorsConstraining factors

STATUS OF CAPITAL ASSETS

NATURAL CAPITAL

Districts Land Holding (ha)

Landless HHs

Average land holding (ha)

Snoul 0.05-0.1 ha 2 1.4

Sambour 1.01-2 & 2.01-5 ha.

0 2.3

Phalanxay 2.01-5 ha. 2 3

FOOD SUFFICIENCY

6.913.2

17.8

41.436.8

28.6

20.715.8

3.6

3134.2

50

0

10

20

30

40

50

60

Snoul Sambor Phalanxay

< 3mths 3-6 mths 6-9 mths >9mths

HHs having food not sufficient for whole year

Snoul: 75.9%Sambor: 68.4%

Phalanxay: 48.3%

FINANCIAL CAPITAL

82.7 81.5

93.186.2

31.541.3

6.80

6.817.2

0 0

37.9 36.8 34.4

20.6

44.7

20.6

0

20

40

60

80

100

Snoul Sambor PhalanxayStudy Area

Perc

enta

ge

Agriculture NTFP collection Civil service Plantation worker Private enterprise Other jobs

Occupation

17.2

23.720.720.7

23.7 24.1

48.3

39.4

31

3.4 5.3

17.3

10.47.9 6.9

0

10

20

30

40

50

60

Snoul Sambor PhalanxayAnnual Income

Perc

entag

e

< 500 501-1000 1001-2000 2001-3000 3001-10000

Average annual income from NTFP collection US$

300

FINANCIAL CAPITAL CONTD…

6.92.6

58.6

34.5

23.727.7

41.4

57.9

10.310.3 10.5

06.9 5.3 3.4

0

10

20

30

40

50

60

70

Snoul Sambor Phalanxay

Expenditure

Perc

enta

ge

<500 501-1000 1001-2000 2001-3000 3001-6000

Expense on food:52.8% in Snoul; 54.9% in Sambor

and 68% in Phalanxay is spent on food.

HUMAN CAPITAL

Health Status:44.8% hhs in Snoul and 57.9% hhs in Sambor do not have good health condition. Majority in Phalanxay have fair health.

Trainings and Skills:Large majority in Snoul and Sambor are untrained and unskilled. Phalanxay has 44.8% hhs with trained members in various community development fields.

39.433.7 33.4

52 53.546.7

6.610.1 11.6

2 2.78.3

0

10

20

30

40

50

60

Snoul Sambor Phalanxay

Study Area

Perc

entag

e

Non-literate Primary education Secondary education Higher secondary and above

HUMAN CAPITAL CONTD…

38.234.8

41.7

29 31.625

19.7 19.8 18.611.8 10.1 10.9

1.3 3.7 3.8

0

10

20

30

40

50

Snoul Sambor Phalanxay

Study Area

Perce

ntage

<14 15-29 30-44 45-59 >60

PHYSICAL CAPITAL

District Access to credit (%

hhs)

Loan taken from

(% hhs)

Livestock ownership

(% hhs)

Access to infrastructure and facilities

Snoul 48.3% Micro-credit institutions

89.7 Motorable road, primary

school&district hospital

Sambour 78.9% Friends/relatives

86.8% Motorable road, primary

school&district hospital

Phalanxay 58.6% Bank 76% Electricity and wells in addition.

IMPACTS ON LIVELIHOOD

Land grabbing: 3 hhs each in Snoul and Sambor and 6 hhs in Phalanxay claimed their land ( 0.5-5 ha)taken by the Companies. Of these only 1 hh in Snoul and 1hh in Phalanxay were compensated.

Private enterprises like making coal, wood trade based on the forest resources at risk due to loss of forest.

22% in Sambor and 3% in Phalanxay even faced decrease in income.

Livestock rearing suffering due to loss of grazing land.

Risk in rearing livestock due to fear of compensation if cattle enter plantation area and destroy crops.

IMPACTS ON LIVELIHOOD Contd….

Fear of losing cattle, which are hurt/killed by company guards.

Lack of trust was observed among the laborers and the Company and there is no feeling of ownership among the workers as they feel exploited. People doubt the Company’s intention in Phalanxay.

Local employment not promising and existing recruitment of Cambodians decreasing with increase in Vietnamese labor import.

Loss of local forest and biodiversity.

IMPACT ON NTFP COLLECTION

PERCEPTIONS ON BENEFITS AND SATISFACTION

Perceptions

In Snoul, 55.2% feel plantations are somewhat beneficial and 24% very harmful.

In Sambor, 36.8% feel somewhat beneficial, 21.1% no effect and 28.9% not beneficial.

In Phalanxay, 70.8% feel its very harmful and 20.8% say no effect.

Satisfaction

In Snoul, satisfaction level was neutral. Some still feel, money given compared to hrs. worked is less.

In Sambor, laborers are not satisfied with the wage and complained of bias in payment (with the villagers).

In Phalanxay also it is a mixed opinion between satisfied and dissatisfied.

CAPITAL INDICESDistrict Social

capital Human capital

Natural capital

Physical capital

Financial capital

Snoul 0.385 0.151 0.659 0.551 0.232

Sambour 0.258 0.161 0.565 0.769 0.294

Phalanxay 0.681 0.321 0.681 0.676 0.209

POLICY INTO ACTION: IMPLEMENTATION GAPS AND IMPACTS

Overlapping policy and lack of coordination between horizontal and vertical levels of line agencies.

Lack of transparency.

Inadequate monitoring and supervision.

Lack of strict enforcement of rules and regulations.

Inadequate information dissemination and public consultation.

Violation of traditional rights and non-consideration for community livelihood.

CONCLUSION Weak implementation and enforcement of existing laws/regulations.

Transparency of database and information are lacking.

Only sporadic employment generation at local level as most of the laborers are imported from other villages/provinces.

Measurable negative impacts like land acquisition without compensation to the farmers, loss of biodiversity and NTFPs, impacts on livestock rearing.

Depleting quality and quantity of NTFPs have direct negative impact both on financial capital and food security.

Need to learn lessons from the history of Thai forestry regarding the involvement of community. Laos has been promoting contract farming.

No evidences of programs focused towards human resource development in Cambodia.

Status of concession and its impacts are more or less similar in Cambodia and Laos in many respects, in Laos however things seems to be getting somewhat better in terms of institutional arrangements, laws/policies and governance.

RECOMMENDATIONS

For Public Authorities:

Establish process monitoring systemNeed of a single governing body for ELCs for Cambodia. Strict prescription of labor % age by Cambodian law.Credit facilitation and capacity building programs for alternative

livelihood options.Peoples’ participation in all stages of planning, implementing and

decision-making.Dissemination of clear and updated information to the community.Good health and education facilities for nurturing capable human

resources.Integration of rural development with natural resources

management.

SCOPE FOR FURTHER RESEARCH

A study based on surveys of the plantation workers may be undertaken to assess the actual benefits of the plantation versus the objectives of the governments.

SWOT analysis of the laws/policies across the GMS countries.

Plantations induced land use change and impacts on the environment, soil and water.

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