Plantations
Development in Laos – The scramble for a piece of the Lao pie
Since 2006 the small
landlocked South East Asian nation of Laos has seen an explosion
of small, large and medium scale plantations, particularly rubber,
eucalyptus and biofuel crops. This increase in industrial tree plantations
has not come about by itself however, but has been promoted by IFI's
over the past decade as a means to increase Lao GDP. Foremost among
the promoters of plantations development in Laos is the Asian Development
Bank. Despite being one of the most corrupt countries in the world
(Laos ranked 163 out of 171 in 2007 on transparency internationals
Corruption Perceptions Index), the Asian Development Bank has been
fervently promoting agro-forestry investment for many years.
Their sordid history of plantations promotion is perhaps best known
for the disastrous 11 million dollar loan project running from 1996
to 2003 with the express purpose of promoting plantations in Laos.
That project alone has left large numbers of impoverished farmers
with an unpayable debt, has nearly bankrupted the government run
Agriculture Promotion Bank, and has facilitated large scale plantation
operations in Laos.
Despite the lack of
secure land tenure arrangements and a lack of capacity within the
government to monitor and regulate plantations investment, the ADB
had no qualms about actively promoting Laos as a destination for
trans-national agro-forestry companies, inviting large agro-forestry
investors to advertise Laos as an ideal plantations investment destination
in the capital Vientiane in 2004. These promotion activities undertaken
by the ADB appear to have worked, as in 2005 the Japanese pulp and
paper giant Oji Paper became the first major multi-national to invest
in plantations in Laos (acquiring a 50,000 hectare concession).
Following the entry of Oji, investments in the Lao agro forestry
sector have sky-rocketed. Figures from the Ministry of Planning
and Investment show a doubling of the number of agro-forestry investments
from 2004 to 2006 with a corresponding increase in total investment
value from 75 million dollars in 2004 to 458 million dollars in
2006. While there are numerous small and medium sized plantation
operations, particularly from neighbouring countries, at the moment
large scale investors comprise Grassim-Birla Group of India who
followed soon after Oji, securing a 50,000 hectare concession, and
more recently Finnish pulp and paper giant Stora Enso has been working
to sign a 35,000 hectare concession agreement to plant eucalyptus
in Southern Laos. Finally, Oji Paper is pursuing a further 30,000
hectare concession in the south of the country.
Yet in a country where
government salaries are only $30 a month, and capacities of government
staff to monitor concessions are weak, natural resource loss and
the disruption of traditional livelihoods has invariably accompanied
plantations development. Reports by the German Development Agency
GTZ reveal a near total lack of regulation of land concessions in
Laos. Among the many damning findings of a 2006 GTZ report are that
there is little to no understanding of the extent of concessions
that have been issued across the country due largely to a decentralised
and unregulated process of handing out land concessions. Not only
are different government agencies able to grant land concessions,
but both national, provincial and district branches of the government
can allocate land for plantations development without consolidating
this information in any one place. This aspect alone has led to
a situation whereby concession areas allocated to different companies
now overlap with one another meaning that plantation companies are
now scrambling to secure their concession areas before they are
lost to other companies.
Despite the extraordinary
growth of agro-forestry investments in recent years, the process
for allocating land for concessions remains woefully inadequate.
Reports from some disgruntled government staff and from villagers
themselves indicate that companies are in effect allowed to allocate
themselves land by putting local government officials on the company
pay role, with the express purpose of securing land for the company.
And in a system where there are many more impoverished officials
to replace those that can't or won't find land, it is not surprising
that there are frequent reports of manipulation, exaggeration of
benefits, and forced coercion of villages to hand over land to plantation
companies.
While theoretically
the previous forestry law stipulated that only "degraded land"
could be used for plantations development, time and time again dense
tropical forest has been logged to make way for plantations development
(providing handy income from log sales at the same time). In Central
Bolikhamxay Province several large scale logging operations disguised
as palm oil and coconut oil plantations were reported by local development
agencies, and independent researchers have documented the clearing
of rich areas of primary and secondary forest for Oji Paper's 'flagship'
eucalypt plantations.
For the rural communities
who remain largely dependent on forest resources for their livelihoods
the picture is grim. Village communities presently have no secure
land tenure under the law, as all forest land is recognised as the
property of the state. Plantations development have been used by
the government of Laos for many years as a tool to physically disrupt
shifting cultivation systems curtailing fallow periods and reducing
food security. Furthermore, rural communities, despite often loosing
hundreds of hectares of forest land to plantations often derive
only very minimal benefit from plantations operations. Tree planting
periods coincide with the rice planting season meaning that jobs
often go to outside contract labourers. When work is available to
villagers it is mostly irregular and mainly only accessible to a
small number of villagers at any one time.
By May 2007 the government
of Laos had lost control of the situation with land concessions
and as more and more reports were emerging (even in the usually
placid state run media) of hardships faced by villagers in relation
to plantations, the Prime Minister of Laos announced a nation-wide
moratorium on land concessions. However, even this moratorium has
failed to stem the tide of land concessions across the country,
as it is either ignored by local elites, or circumvented through
loopholes in the moratorium that allow companies who have already
signed concession agreements to continue to fill those concessions,
or by allowing multiple 100 ha concessions to be issued to the same
company.
While there have been
some recent positive movements by the Lao government and donor agencies
to both acknowledge and address the serious failings of plantations
investment in Laos, only time will tell if the government of Laos
is able to reign in run away plantations development and protect
the natural resources so important to villagers and the stability
of the country.
Report compiled by
visiting WRM researchers during 2008
