Investment Deals in Africa
OI confirmed that by early 2011, close to 500,000 ha of land had been leased to foreign investors or were under negotiation for lease in Sierra Leone. The following are the key concerns raised by the land negotiation and land investment processes in Sierra Leone:
1. Lack of information and public disclosure
There is a critical lack of information from
government regarding all aspects of the Sierra Leone land deals and an alarming
lack of transparency in the way the land deals are negotiated. The OI team was
unable to obtain a copy of any land lease despite intense efforts and repeated
requests. In addition, SLIEPA does not make available any details about
investors. Sierra Leoneans thus have no access to information on the amount of
land that has been leased or the details of land leases. Furthermore, there is
almost no critical or accurate media coverage of land deals in Sierra Leone.
Until 2010, there was no public debate on the issue of land deals in Sierra Leone. Local civil society groups and NGOs such as MADAM, Green Scenery, and the Sierra Leone Association of Journalists on Mining and Extractives (AJME) are now trying to address the issue of foreign investment in land and engender national debate to increase public awareness on the issue.
2. Lack of responsible governance
In 2009, MAFFS published a set of policy guidelines for agricultural investments and incentives. However, the guidelines contain many loopholes and are nonbinding for investors, many of whom bypass MAFFS and negotiate directly with chiefs and local landowning families.
SLIEPA advises investors to introduce themselves to
the government “via the Sierra Leone Investment and Export Promotion Agency” and
then to engage a local agent (SLIEPA will help identify one) to support the land
acquisition process.251 However, no SLIEPA documents mention the requirement
that investors go through MAFFS or that they establish a five-year business plan
to be submitted to a Government Negotiating Team, as specified in the MAFFS
policy guidelines. Although SLIEPA officially falls under the jurisdiction of
the Ministry of Trade and Industry, the Minister describes SLIEPA as an
“independent” agency, and it appears to operate with a great deal of power and
To date, no binding legal framework or legislation
has been implemented to adequately handle agricultural investment. Thus, there
is no legal obligation for investors to sign a Memorandum of Understand (MOU)
with government – or have that MOU approved by Parliament or undergo a public
disclosure process. The lack of a legal framework leaves the government and the
people of Sierra Leone extremely vulnerable, as there are no pre-defined
sanctions for failures to
3. Confusion surrounding land “availability”
People’s rights in the face of the presumed
widespread availability of land for investment and cultivation are a key concern
in the case of Sierra Leone land acquisitions. The GoSL, SLIEPA officials, as
well as the FAO office in Sierra Leone, claim that only 11 to 15 percent of the
country’s arable land is being “used” or “cultivated”, and they argue that 85
percent of cultivatable land is available to investors. OI has concluded that
these figures come from outdated data
4. Farmland for fuels and not for food
The campaign to attract foreign investment in
agriculture has emphasized opportunities for investors in sugar and palm oil,
both of which provide raw stock for agrofuels. At present, Sierra Leone has no
capacity for domestic agrofuel production, so production would clearly be for
export. The Addax Bioenergy project is producing sugarcane for ethanol that is
to be exported to the EU. Sierra Leone Agriculture is producing palm oil, and
reports regarding its alleged use are contradictory. Quifel’s lease was also
originally negotiated under the premise that palm oil will be produced. Given
5. Taking advantage of local vulnerabilities
Local community members do not receive full
disclosure from “coordinators” (agents hired by investors to convince locals to
agree to land leases). Local communities, town and section chiefs, and
landowners are generally persuaded that investments will only bring benefits,
whether employment or other forms of “development.” Potential negative impacts,
Under traditional Sierra Leonean social structure,
there is little tendency to publicly question authority. This makes rural people
all the more vulnerable to those individuals who, from positions of authority,
convince community members that a land lease is in their interest. The land deal
case studies illustrate how this has played out in Sierra Leone: an MP acted
Local people often confuse foreign corporations
with NGOs, and in many cases, investors’ agents, anxious to persuade community
members of the benefits of agricultural investments, do not correct the
6. Lack of environmental protections
There is little acknowledgement within the
government ministries – and none at all in SLIEPA – of environmental and
sustainability issues related to agricultural investments. Large-scale,
industrial agricultural developments necessitate monocultures heavy
mechanization, the use of hybrid seeds or clonal varieties (in the case of palm
oil), and the use
These and other environmental impacts affect the wellbeing of local populations and reduce their capacity to cope in the face of climate change. Agro-ecological agriculture, encouraged by many civil society groups, farmer associations, scientists and also the UN Special Rapporteur on the Right to Food, is not being discussed or explored by investors or by the GoSL. Environmental, Social and Health Impact Assessments (ESHIAs) are, according to MAFFS, mandatory for all large-scale land deals. Yet deals are being signed and projects moving forward (Quifel, SLA) without ESHIAs. The ESHIA for the Addax project does not contain detailed information of existing land use in the area, including a full analysis of all products and services derived from existing land use. Nor does it contain the information on the livelihoods of nonlandowners working the land, especially women, necessary to assess the loss to these vulnerable groups.
Furthermore, the ESHIA is not a binding legal
document, even though it may be viewed as such by the Sierra Leone Environmental
Protection Agency (SLEPA). The ESHIA does not stipulate pre-defined sanctions
for failing to adhere to lease terms or failing to undertake measures to
mitigate risks – to human health, soils, rivers and biodiversity. In addition,
it fails to consider all other large-scale investments in the area, including in
mining, logging or agriculture, so that an overall assessment of the collective
impact on water resources, land, vegetation, community livelihoods and
The only governmental agency with the
responsibility to monitor the environmental impacts of land deals is SLEPA.
However, SLEPA can only analyze the deals once an official ESHIA has been
completed and submitted; the agency has no control over investors who do not
sign MOUs with the GoSL or undertake and submit the proper impact assessments.
Because SLEPA falls under the jurisdiction of the Office of the President there
are concerns that the agency may not be able to fulfill its responsibility as an
independent watchdog, given the president’s outspoken support for the foreign
7. Concerns over government’s role in land acquisitions
The GoSL grants foreign investors generous fiscal incentives and protection. Agricultural investments in tree crops and rice benefit from 10-year corporate tax holidays and zero import duty. The country allows 100 percent foreign ownership in all sectors; there are no restrictions on foreign exchange, no limits on expatriate employees and full repatriation of profits, dividends and royalties.
Yet, the Minister of Finance and Economic Development has admitted that the existing regimes of tax and duty exemptions are seriously eroding the government’s tax base (and around the time of the implementation of incentives and protections for investors, the GoSL began imposing a 15 percent domestic Goods and Services Tax). It is not clear how the GoSL is going to benefit from land deals when it continues to attract investors through giveaway rates and generous fiscal incentives.
A pro-business orientation is resoundingly endorsed by the GoSL. The President Ernest Bai Koroma is extremely enthusiastic about agricultural investment, promoting it unquestioningly as a strategy for rapid economic growth. The high-level support for foreign investment in Sierra Leone’s farmland is a deterrent to open criticism among government officials, employees, and others fearful of being viewed as opposed to “development.”
Rural people feel they are not in a position to
speak out against or to question policies endorsed so strongly by their head of
state. There are also questions regarding high-level government involvement in
the Sierra Leone land deals.
The MAFFS policy document states that land leases are developed jointly by the Office of the Attorney General and the investor’s lawyer, yet the man whose law firm negotiated at least two of the investor’s leases is now the Attorney General, and as such, also in charge of the ongoing land tenure reform process. This anomaly has been made public, but has not been resolved.
8. External interests at work
The World Bank Group has been instrumental in
increasing foreign investment in Sierra Leone by funding institutions and
leading reforms to attract investors and to ensure their access to land and
resources. In particular, the IFC provides financial support and works closely
with SLIEPA. The World Bank Group is also financing a hasty process of land
tenure reform. There are concerns that reform measures, in their desire to
accommodate foreign investors, are overlooking the issues of equitable and
secure access to land for all Sierra Leoneans, particularly women farmers.
They do not respect usufruct rights to land use or local needs for water and farmland, and there is little or no accountability. There is no proper regulatory framework to deal with FDI in land resources (all those materially affected are not consulted), and they do not strengthen food security.
The World Bank promotes and enables land deals that
clearly do not respect their own principles of responsible agro-investment. In
addition to the pervasive influence of the World Bank Group, the Tony Blair
African Governance Initiative
9. Potential for conflict
Most of the agricultural investments in Sierra Leone are recent and are not yet fully operational, and yet there are early warnings about the risks they entail – social, political and economic. In Lungi Acre, in the Addax lease area, local people are making veiled threats about what they will do if the company continues to mistreat the local workers, if it doesn’t compensate them for the loss of their bolilands, and if it doesn’t fulfill its pledges to contribute to local development.
The Quifel investment is indirectly related to a violent dispute over the position of Paramount Chief in Loko Massama Chiefdom, and tension remains high in the area because of perceived advantages that the position would afford because of Quifel’s presence. The Sepahan Afrique agreement has already caused internal conflicts in the community of Madina, where people turned on each other, believing that the company had been “tipping” certain individuals to garner their support for the investment.
Sierra Leone is still struggling to overcome the devastating economic, social, political and psychological effects of its long civil war. Patrick Johnbull, of the Sierra Leonean NGO, Green Scenery, and also with the country’s Justice and Peace Commission, commented that the way the land deals are currently being negotiated – where local people are cajoled into leasing their land through much deception – is “going to lead to the same war we just came from.”