I am writing to share the exciting news of our launch today of two practical, easy-to-read guides written to support communities to prepare for and then negotiate with potential investors seeking community lands and natural resources. Click here to download Guide 1, and here to download Guide 2!
As the human population rises, and climate change dramatically changes local ecosystems, there is more and more competition for fewer and fewer natural resources. National elites and international businesses are increasingly turning to more remote locations to extract minerals, log timber, establish agribusiness ventures, and build hotels and other tourism-related services.
In some legal jurisdictions, communities have the right to Free Prior Informed Consent. However, “community consultations” are often characterized by very significant information and power imbalances: investors may arrive for the first time, accompanied by powerful government officials who only inform the community that an investment is happening and demand an immediate “yes.” Community members - and their leaders - often do not know their rights, or may feel powerless in the face of influential government officials. The consultation may not even take place in the local language, making it very hard for community members to understand what is being discussed.
Potential investors often make elaborate promises of jobs, infrastructure, and rental payments - yet never put these promises into an enforceable contract. Community members may welcome an investment on the assumption that the investor will bring needed jobs and development, yet not know that if these promises are not put in writing, they are absolutely meaningless and may never happen. For example, I led a research study in Mozambique from 2009 – 2011; during interviews with Mozambican community members in the Province of Inhambane, participants asked about their experiences of tourism investments operating in their communities explained:
“The disadvantage is the dishonesty of the investors who exploit community resources and do nothing in return - they build tourism facilities and make lots of money, but the community gains nothing in return; the investors make promises they never fulfill.”
“Foreign investors come and, instead of fulfilling their promises, in place of developing the community, they pillage it;”
“The big disadvantage is that investors never fulfill their promises; they come to our community with their promises, they come to make money using our resources, but they never turn their promises into a reality;”
“The disadvantages of having an investor exist when the investor does not fulfill his promises and begins to dictate his own rules in the community that are harmful to members of the community, or when the investor begins to arbitrarily create boundaries, closing our roads and not giving us access to our resources located the areas occupied by the investors. Investors forget that these resources are the community’s and are not his private property.”
Because none of these communities had a contract with these investors, they were powerless to take the investor to court to fulfill unwritten promises made during the “consultation.”
After searching in vain for a short, easy-to-read guide for communities about how to negotiate contracts with potential investors, Namati and the Columbia Center on Sustainable Investment (CCSI) decided to take on the challenge of writing these guides ourselves! Our intention for these guides is that communities and their advocates can use them to push for enforceable community-investor contracts that genuinely lead to local prosperity and well-being.
Guide 1 is designed to prepare communities in advance for contract negotiations - it details how they can:
- Make rules to guide how they and their leaders will interact with investors;
- Understand the value of their land to them, so they know how to assess the investor’s offers of financial payment;
- Resolve conflicts around how to react to potential investors - as community members often have different opinions on what is best for the community; and
- Prepare for negotiations by researching the investor, creating a negotiating team, and agreeing on points the team will advocate to be included in the contract.
It also details community members’ legal rights and explains what should happen in an authentic “consultation.”
Guide 2 is designed for communities who have agreed to negotiate with a potential investor and are beginning contract negotiations. It describes the sections and clauses that should be in a contract, advises what protective language to include, and warns against “red flag” language (taken from real contracts!) to avoid.
Please share your own experiences with investor-community interactions. Have you seen any community-investor contracts? If you have any, please attach the contracts to this discourse thread, or send them along to me at firstname.lastname@example.org. If you have supported communities to have positive experiences with investors, please share your successful strategies: how did community members ensure that the investment benefited – rather than impoverished – the community? Or, if you have observed instances of national investors abusing their power and authority to grab community lands in bad faith – please share those stories as well.
Finally, if you download these guides and try out some of the exercises or use them to help support a community to negotiate a better contract, please write back to this discourse thread and let us know how it went!
Senior Advisor for Land, Namati