Concessions and Leases in the Lao PDR

Compensatory Activities
Case Study 7: Houfuco Company, Ltd., a Vietnamese investor,
was granted 284 ha for growing cassava in Ban Spon and Ban
Songkalong villages in Saravan District in 2005. According to
the Minutes No. 02 taken of the meeting between the district
governor, investor and village authorities, it is stated that the
main reasons for granting land in those two villages to the
investor was that both areas are considered poor and have
no access to roads and facilities. The company therefore, in
exchange for the land, agreed to build an access road,
provide electricity, and to build a school and a health care
centre to those villages. As of 2010 when the inventory team
visited the village, the access road and the agreed facilities
had not been constructed, thus the investor had still not
fulfilled its obligations to the villages. The investor’s explanation
was that he could not fulfill his obligations, because there was
too little profit from the business development.
This case and several others where agreements are made only
verbally reveal the severe disadvantages local populations
have in land negotiations, especially where they are poorly
educated, illiterate or simply under exposed to tenure or business
related standards and practices. Government bodies responsible
also do not enforce agreements or obligations between the
local stakeholders and investors, often to the detriment of
local communities and the gain of investors. The unfair
balance of power between investor and villagers shown here
is a critical issue in the governance of land deals and investment
in the Lao PDR.
Investor Violations of the Implementation Process
Case Study 8: In Xayabury Province, a number of companies
have begun activities before receiving (and sometimes before
even requesting) authorization from the relevant
government authority. For example, Mr. Somphone
Hakpaseuth started clearing land and planting rubber
seedlings on an area of 330 ha in 2009 in Ban Nampui and
Ban Khounphon village, Phiang District. Those activities
began before even submitting the required documents for
government approval.
Case Study 9: In Champasack Province, the Sithat Road-
Bridge Construction Company, Ltd. engaged in commercial
rice cultivation in Nongbouathong village of Mounlapamok
District. Initially, the investor’s proposal was to obtain a land
concession for rice cultivation. In 2008, a technical team
consisting of staff from the PLMA, DAFO and the district
administration was appointed to carry out an initial site
survey for allocating potential land for the investor (Refer to
the site survey report No. 08/PLMA, dated 8/12/2008). Out of
the total 206 ha area surveyed by the team, only 100 ha were
granted to the investor. The PLMA then turned the request
over to the Provincial Governor for consideration, but in the
midst of the process of consideration, the investor started
land clearing activities in 2008.
At the time the inventory team visited the concession area
in 2010, approximately 400 ha of land had been cleared by
the project investor, who told the team that he planned to
clear altogether 1,000 ha as he assumed that his request has
been approved. The area cleared, however, greatly exceeded
the originally proposed area of 100 ha without having any
approval document so far (see Map A5).
written permission or approval documentation. Both cases
again show the lack of a monitoring mechanism and on the
ground regulatory enforcement.
Map A5: Area surveyed for approval versus the area cleared
by the investor, Sithat Road-Bridge Construction Company,
Ltd., in Nongbouathong village of Mounlapamok District
Area already cleared
and
planned for clearing
(est. 1,000 ha)
Area
surveyed
(206 ha)
These two cases show that there is a general lack of
communication between the government and the investor
and that as long as investors are not monitored, they may
feel free to go ahead with development plans, with or without
86 Concessions and Leases in the Lao PDR: Taking Stock of Land Investments