Credit: Peace Parks Foundation.
Realizing the Potential of Community-Investor Partnerships in Mozambique
January 2011 - Development of Covane Community Lodge, a community-based tourism project, was predicated on recognition of community land rights and of the land’s economic potential. Consultations between the potential investor and the community led to an agreement that has created employment for community members, generated revenues for local farmers, improved the community’s planning capacity and local institutions, and generated profits for the investor. And those benefits continue.
Such partnerships—and private investment—are critical to Mozambique’s development strategy. As with the Covane Community Lodge, private investment can establish new markets, modernize the agricultural sector, stimulate the rural economy, provide employment, and fund the development of natural resources, rural infrastructure and tourism.
However, if done poorly, private investment may cause harm by displacing communities, disrupting or marginalizing smallholder farmers, destroying natural resources, reducing economic opportunities or increasing landlessness and poverty.
Mozambican law encourages investment that is “sustainable and equitable” while seeking to protect local rights over land and resources. Communities hold most rural land in Mozambique based on a legally recognized perpetual right to use and benefit from the land claimed and held by their ancestors. This right is called a DUAT (based on its Portuguese acronym).
Mozambican law requires consultation with communities before their land can be made available for investment. If a community holds a DUAT to the land, the potential investor must secure the community’s agreement to cede its land rights. In exchange for land rights, communities can negotiate contractual arrangements—which may take the form of joint ventures—and a variety of benefits, including cash payments, employment, in-kind contributions, or a combination of the above.
The risk of harm arises when communities cannot participate in the land allocation process or when investors or communities have little knowledge of local land rights.
Such was the case when ProCana Limitada invested in a sugarcane plantation in 2007. Though ProCana consulted with the community, the local population was unaware of its legal rights and ability to negotiate. The project had a short life, and when it closed in 2009, the community received none of the promised benefits of employment and improved infrastructure.