Foreign Direct Investment (FDI) in Land in developing countries

37Legal domestic environmentIn Mali, the land tenure system is based on theCode Domanial et Foncier (CDF, Land Act) 17 , theLoi d’Orientation Agricole (LOA, AgriculturalOrientation Law), the Code Forestier, (Forest Act)and the Charte Pastorale (Law on Pastoralism) aswell as its implementing provisions. They providethe following four property categories:• National Domain (covering the entire Malianterritory),• State public land,• State private land, and• Private land.In accordance with the French system, state landis divided into state public and state private land.While state public land comprises all lands withpublic functions (natural and artificial domains),state private land covers all other areas which arenot under private ownership. State private landcan be registered under the name of a legal entity(such as a state enterprise, a foreign investor etc.)or be unregistered.Neither communal nor indigenous land is knownas such in Mali. Areas where local people possesscustomary land rights are included in the stateprivate domain, hence considered to be state privatelands. They are only recognised and partiallysecured if they are located in unregistered areas.They remain secured as long as common publicinterest does not call for a different use. In thiscase, however, customary rights need to becompensated. In practice, this is only done forcustomary owners who can present written proof.Although customary rights are recognised onunregistered lands, they are considered to be userights only. Officially, they cannot be sold. In caseof compensation, not the land, only the addedvalue in form of constructions, cultures etc. iscompensated. It is, however, possible for a holderof a customary right to change it into a formalright – first a provisional concession and then atitle – if he or she follows a rather long, drawn outand expensive procedure.CDF and LOA provide for the following landtenure arrangement: annual contract, cultivationpermission, rural concession, leasehold, land title –all allocated by the state on (former) state privateland. The land title can be held only by nationalfarmers. Foreign operators are entitled to leasesonly. Most FDI contracts are based on a renewablelease of up to 50 years, respectively 99 years intotal. Similar to the situation in Laos, problemsand conflicts arise from the fact that local farmers’and pastoralists’ land (use) rights are not (sufficiently)respected by the national institutions/representatives signing the FDI contracts. Most ofthe land FDI investing in Mali has been given tothe Niger Office (a state enterprise irrigating amajor area along the river Niger, primarily for riceproduction) and has thus been registered as“registered land”. Hence, customary rights on thisland are not recognised although hundreds ofthousands of people live on these lands, farm theselands, graze their animals there, live from theforests and depend on the water available there.Additional national regulations oblige foreigninvestors to conduct an environmental and socialimpact assessment. In practice, however, these areoften not done or only after major constructionworks have already been started.Data on the size of FDI in land and risks andopportunitiesCurrently in Mali, 173,605 ha are known to bedemanded for foreign investments. In addition,there is information about an investment ofanother 200,000 ha by a Saudi Arabian companyin food in Mali (Grain). This information couldnot been verified yet.Most of the investment is taking place in theNiger Office Area. This is the most fertile area ofMali with production depending on irrigationfrom the Niger River. But since water availabilityduring the dry season is limited, only 250,000 haare irrigable. Therefore, further demand in landand water will create water conflicts. The case ofMalibya, currently in the implementation projectphase of building roads and dams, is alreadyresulting in conflicts with cattle breeders, sincetheir traditional routes and grazing areas areignored. Whereas Malibya is exclusively producingfor the Libyan market with the objective to securefood security in Libya and to reduce dependencyon food imports and therefore on the food world17 Ordinance n° 00-27/P-RM of Mars 22 2000, named “Code domanial et Foncier” (Land Act) modified by the Law n° 02-008 of February 12 2002.