The Financial Impacts Of Disputes Over Land And Resource Rights

Tenure disputes – or disputes over claims to land and natural resources – are endemic in emerging market agricultural land investments. Investors that cannot earn social licence to operate can struggle to access and use land they have leased or acquired regardless of their legal or political standing. Tenure disputes are common in emerging markets and can create long delays for projects, reducing their net present value (NPV).

In some instances, these disputes escalate and eventually lead to cancellation or abandonment. We have found that these disputes are frequent in sectors like agriculture, mining and infrastructure where real assets demand large areas of land in emerging markets. Thankfully, we have also found that these disputes can be mitigated and avoided through cost-effective actions like social impact assessment and due diligence.

Testimonials

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Investors in real assets in emerging markets are bound to be exposed to tenure risk. The work produced by ODI and TMP can help them to understand and manage this risk effectively by providing a business case for responsible practices.

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Purpose of website

The last phase of the project built a financial model that businesses can use to assess exposure. The current phase focuses on the cost and effectiveness of mitigation and avoidance actions. We are actively collecting data for this work and need your help. This work will be presented in a series of workshops. If you or a colleague would be interested in attending one of these, please get in contact.