Investors and local communities

Two newspaper  articles caught my attention last week. The first article was about a study which suggested that bio-fuel investment had not brought about the desired results. While the nation looked into bio-fuel to meet growing energy demands and to improve farmers’ livelihoods, some 200 companies obtained a license to invest in bio-fuel. However, according to the article, only 11 companies have actually begun producing bio-fuel. The study is reported to show that local communities have failed to benefit from bio-fuel. Instead conflict has arisen between companies and local residents. I quote: “Interviewed farmers indicated that they had some conflict with the Jatropha companies. Residents complain that the investors have restricted their use of the land and natural resources. Compensation for the use of the land was insufficient to meet their basic needs and frequently arrived late. This has led to disputes over payments and the amount of land given out to companies. Disputes over land has arisen, the study argues, because existing land acquisition processes have not been transparent enough and local stakeholders have not had adequate representation. It also argues that impact assessments were not properly conducted or enforced, which has caused land fragmentation that has alienated local communities. The study suggested that proper land inventory is necessary to identify potential areas for bio-fuel development with reduced negative socio-economic and environmental impacts.” “Jatropha companies have acquired land that was used by the local community for grazing their livestock. In particular, land put under large scale Jatropha cultivation is fenced without leaving a walk way to water livestock. The main source of conflict between an investor and the local community was related to water resources.” The second article was about promising oil finds in South Omo. Several companies venture to explore the large reserves expected to be found in South Omo, while one has already made discoveries in Turkana across the border in Kenya and has stakes in Uganda as well. While preparations to further explore oil reserves in South Omo and other parts of the country are underway, chances are that conflicts similar to the ones described above, between investors and the local people may develop.
On the one hand we are trying to find alternatives to fossil fuel by investing in bio-fuel, on the other hand we try and explore the possibilities to find oil. This may seem an interesting contradiction but both may have their place in the challenges we face in terms of addressing issues related to climate change as well as development and economic growth. Both are similar though in the challenges presented by the changes they bring about for local communities and their livelihoods, which are mainly ecosystem derived. As the challenges are not limited to these two specific examples but apply to any investment of scale, I suggest we look into ecosystems and their management and find ways to arrive at win-win solutions rather than conflict.         
Ecosystems are very important indeed in supporting livelihoods. As explained in a UNEP policy brief, ecosystems, the biodiversity that comprises them and the benefits they provide to people are the fundamental units for life support on earth. They are the foundation for the natural processes of climate regulation and are a vital support for water quality, food security, and flood protection, amongst many others. Currently there are severe pressures on the health of our ecosystems. The drivers of these pressures include climate change, biodiversity loss and resource demands by people. Natural ecosystems are being converted to other uses rapidly,
for example over 40% of today’s terrestrial surface is now in agriculture. At the same time climate change is posing a further substantial risk to the health of ecosystems and therefore their ability to provide ecosystem services, whilst human population growth and resource use per capita is increasing. Developing policies and economic strategies that place ecosystems and the services they provide at the centre of future economic development and climate change mitigation and adaptation efforts will result in multiple positive benefits to all people globally. An ecosystems approach is an essential part of the ‘tool kit’ to tackle climate change and to progress towards long-term economic sustainability. This leads to the values that connect us to communities and to the environment – values such as transparency, integrity, honesty, and shared responsibility. This mindset also leads us to think about the impact our actions will have over the long term. It is not about pragmatically exploiting short term opportunities but rather consistently applying principles that create long-term success.
For investments such as the ones described above to be successful, it is therefore essential that local residents and communities are fully involved and consulted in the process of feasibility study and business planning, including environmental and social impact assessments. Overlooking this or doing this insufficiently may result in a situation, whereby the consequences of the interventions for the local community are not fully considered. It may lead to a situation whereby the investor wins and the local residents lose. In the end however this means that all will lose. Instead we need to strive towards a win-win situation for all. Such processes need to be facilitated well and the investors may not have the full capacity, experience or understanding and knowledge of the local situation, to do this well. Many other organizations however do have experiences in such participatory processes and could play an important role in bringing the interests of the local communities and investors together. In fact a coordinated effort between Government, Private Sector and Civil Society could indeed be effective in finding a way that will benefit all.