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Corruption and large-scale land acquisitions: an analysis of the role ...

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grabs devastating to local livelihoods, food security, cultural well-being <strong><strong>an</strong>d</strong> <strong>the</strong> environment, <strong>the</strong>y are als<strong>of</strong>requently not achieving <strong>the</strong>ir most fundamental <strong>the</strong>oretical economic objectives.This situation c<strong>an</strong> <strong>the</strong>n fur<strong>the</strong>r compound corruption <strong><strong>an</strong>d</strong> undermine govern<strong>an</strong>ce reforms in a number <strong>of</strong>ways. If a government fails to generate taxes <strong><strong>an</strong>d</strong> o<strong>the</strong>r revenues from, for example l<strong><strong>an</strong>d</strong> leases, a deficit iscreated in <strong>the</strong> national budget which me<strong>an</strong>s it c<strong>an</strong>not afford to pay civil serv<strong>an</strong>ts adequate salaries,fostering a dem<strong><strong>an</strong>d</strong> for alternative incomes; namely bribes. If <strong>the</strong> benefits <strong><strong>an</strong>d</strong> vested interests resultingfrom corruption become institutionalised, this creates a “Shadow State”. 17 Shadow State rulers aredescribed as “m<strong>an</strong>ipulate[ing] external actors’ access to both formal <strong><strong>an</strong>d</strong> cl<strong><strong>an</strong>d</strong>estine markets, by relying on<strong>the</strong> global recognition <strong>of</strong> sovereignty, <strong><strong>an</strong>d</strong> are <strong>the</strong>reby able to undermine formal government institutions.”Such rulers undermine formal government institutions by weakening bureaucratic structures <strong><strong>an</strong>d</strong>m<strong>an</strong>ipulating markets in order to “enrich <strong>the</strong>mselves <strong><strong>an</strong>d</strong> control o<strong>the</strong>rs”; political power <strong><strong>an</strong>d</strong> privatecommercial operations <strong>the</strong>refore become indistinguishable.Such Shadow States me<strong>an</strong>while isolate, threaten, detain <strong><strong>an</strong>d</strong> even kill whistleblowers <strong><strong>an</strong>d</strong> activists whocriticise government policies <strong><strong>an</strong>d</strong> decision-making. In 2012 Global Witness research showed that l<strong><strong>an</strong>d</strong> <strong><strong>an</strong>d</strong>forest activists are facing increasingly deadly responses from governments, comp<strong>an</strong>ies <strong><strong>an</strong>d</strong> <strong>the</strong> armedforces; in <strong>the</strong> last decade <strong>the</strong> rate <strong>of</strong> killings has been more th<strong>an</strong> one a week <strong><strong>an</strong>d</strong> this has doubled since2009. 18A country with a bad r<strong>an</strong>king on international corruption indices may be decreasingly attractive to foreigninvestors from jurisdictions where being involved in corruption risks signific<strong>an</strong>t s<strong>an</strong>ctions (eg. <strong>the</strong> US <strong><strong>an</strong>d</strong>UK) or for whom reputational risks are high. As a result, only foreign investors who do not consider beingassociated with corruption to be a risk will be able to continue investing.3) Case studies <strong>of</strong> <strong>the</strong> relationship between corruption <strong><strong>an</strong>d</strong> l<strong><strong>an</strong>d</strong> grabbing 19Case A – Benefiting from friends in high placesCase A is a dispute between “Comp<strong>an</strong>y A” <strong><strong>an</strong>d</strong> approximately 100,000 people who have been negativelyaffected by <strong>the</strong> comp<strong>an</strong>y’s long-term lease <strong>of</strong> several hundred thous<strong><strong>an</strong>d</strong> hectares <strong>of</strong> agricultural <strong><strong>an</strong>d</strong>forested l<strong><strong>an</strong>d</strong>. Comp<strong>an</strong>y A is said to be one <strong>of</strong> <strong>the</strong> country’s most powerful; its owner has very close political<strong><strong>an</strong>d</strong> personal relationships with government <strong>of</strong>ficials at <strong>the</strong> highest level, as well as <strong>the</strong> armed forces, whoare routinely hired as guards to protect its commercial assets. Additionally, it has a track record <strong>of</strong> serioushum<strong>an</strong> rights <strong><strong>an</strong>d</strong> environmental abuses stretching back nearly two decades. The lease in question is one <strong>of</strong>a number <strong>of</strong> holdings it owns which toge<strong>the</strong>r are equivalent to almost 10% <strong>of</strong> <strong>the</strong> country’s arable l<strong><strong>an</strong>d</strong>, <strong><strong>an</strong>d</strong>in total are 30 times more th<strong>an</strong> <strong>the</strong> maximum legal limit for commercial l<strong><strong>an</strong>d</strong> leases.According to <strong>the</strong> affected communities, <strong>the</strong>y first discovered that Comp<strong>an</strong>y A had been given lease rightsover l<strong><strong>an</strong>d</strong> <strong>the</strong>y had lived on for generations when <strong>the</strong> clearing started, a few months after <strong>the</strong> governmentsigned <strong>the</strong> contract. There were no local consultations or evidence <strong>of</strong> environmental, social or hum<strong>an</strong> rightsimpact assessments being undertaken prior to <strong>the</strong> clearing. The boundaries <strong>of</strong> <strong>the</strong> lease area have neverbeen demarcated <strong><strong>an</strong>d</strong> to this day, no documentation relating to <strong>the</strong> lease has been given to <strong>the</strong> affectedhouseholds.17 For fur<strong>the</strong>r details <strong>of</strong> Shadow States <strong><strong>an</strong>d</strong> <strong>the</strong>ir operations, see Reno, W. (1999) Warlord Politics <strong><strong>an</strong>d</strong> Afric<strong>an</strong> States. LynneRienner Publishers, Colorado, London <strong><strong>an</strong>d</strong> Funke N. <strong><strong>an</strong>d</strong> H. Solomon (2002) The Shadow State in Africa: A Discussion.Development M<strong>an</strong>agement Policy Forum Occasional Paper No. 5, Addis Ababa, October 2002.18 Global Witness (2012) “Hidden Crisis: increase in killings as tensions rise over l<strong><strong>an</strong>d</strong> <strong><strong>an</strong>d</strong> forests”, available for download:http://www.globalwitness.org/sites/default/files/images/A_hidden_crisis-FINAL%20190612%20v2.pdf (last accessed on3 rd October 2012).19 The location <strong><strong>an</strong>d</strong> individuals involved in <strong>the</strong>se cases have been removed, in order to protect <strong>the</strong> communities involved. Forfur<strong>the</strong>r information, please contact: mail@globalwitness.org__________________________________Global Witness <strong>Corruption</strong> <strong><strong>an</strong>d</strong> Large-Scale L<strong><strong>an</strong>d</strong> Acquisitions, Global Witness, October 2012 Page 6 <strong>of</strong> 10

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