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Harvard’s Foreign Farmland Investment Mess

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The university’s holdings in developing markets have proved to be more trouble than they’re worth.

Fourteen years ago, a Brazilian farmer named Ruthardo Grun says he was terrorized by armed thugs who shot at him, burned down his shack, and chased him from land he was preparing to farm. Little did he know his battle to get the property back would end up pitting him against a company controlled by the world’s richest school: Harvard University.

 The university’s endowment invested in the Brazilian company years after the events Grun describes. But a lawsuit Grun and five other farmers filed is just one of the long-running property conflicts Harvard inherited when it bet big on Brazilian agriculture almost a decade ago, accumulating vast tracts on the country’s impoverished northeastern frontier. The ongoing disputes include charges of so called land grabbing—the falsification of property titles and displacement of villagers—by companies Harvard later invested in. “I’d like to leave a piece of land to my four children, but I don’t know if it will be possible,” Grun says.
The South American mess shows the legal, financial, and reputational risks that Harvard faces because of its strategy of buying directly into developing markets. Most college endowments hire outside fund managers to spearhead such investments. Harvard Management Co., which oversees the university’s $37 billion endowment, instead bought properties through business partnerships that it formed with locals and controlled.

Over a decade, Harvard invested at least $1 billion in farmland, according to a just-released reportfrom the activist groups GRAIN, based in Barcelona, and the Network for Social Justice and Human Rights, based in Sao Paulo. The organizations came up with their estimate after a year-long investigation of tax returns and local property records, as well as on-the-ground interviews. Harvard’s holdings included vineyards in California, dairy farms in New Zealand, and operations producing cotton, soybeans, and sugar cane in countries such as Brazil, South Africa, Australia, Russia, and Ukraine, and totaled 854,000 hectares, though some assets have been sold.

In response to questions about its farmland holdings, Harvard says it considers the environmental and social implication of its endowment investments. The university said in a statement that it has “instituted a more proactive approach to working with managers of new and remaining assets—a partnership that provides more oversight and ensures that we can leave the land and community better than when we first invested.”

Narv Narvekar, the endowment’s chief executive officer hired from Columbia University in 2016 to overhaul operations, has retreated from direct investing. He’s spun out teams of managers overseeing assets from real estate to hedge funds, sending them to start their own businesses while investing with them. Yet Narvekar is still trying to hammer out the future of the troubled natural resources portfolio, even as he sells some investments, including the New Zealand dairy farm and a eucalyptus plantation in Uruguay.

Now, as a new school year begins, Harvard’s far-flung farmlands are facing criticism for, among other things, their impact on ancient burial grounds and impoverished populations. “Harvard’s farmland deals should be a cautionary tale for institutional investors,’’ writes Devlin Kuyek, a researcher at GRAIN, whose mission is to support small farmers and social movements in poorer countries.

Students, alumni, and environmentalists are targeting U.S. university endowments, saying their investing practices are often out of synch with schools’ professed values. These critics have pushed colleges to jettison stock in fossil fuel companies, private prisons, and companies that do business with Israel. Yale University’s investments in New Hampshire’s Great North Woods have drawn the school into disputes over clear-cutting and the development of a power line.

Silva produces a document that he says shows that his grandfather owned land in an area where titles have been disputed.
PHOTOGRAPHER: LIANNE MILTON FOR BLOOMBERG BUSINESSWEEK

Harvard initially made hefty profits on its land investments, including by buying and selling New Zealand timberlands in the 2000s. But returns fell as emerging markets faltered, and much of the team spearheading the strategy left the endowment in 2015. Last year, Harvard wrote down its natural resources portfolio, which includes timber as well as farmland, by $1.1 billion, to $2.9 billion. Over the decade ended June 30, 2017, Harvard’s investment portfolio returned 4.4 percent a year, among the worst of its peers. In Brazil, in particular, the endowment’s holdings suffered from the country’s recent economic meltdown and political turmoil.

The report, titled “Harvard’s Billion-Dollar Farmland Fiasco,” shows why such investments are so risky. It highlights property Harvard bought in Australia through a company called Wealthcheck Funds Management. According to a government inquiry, the company harmed an Aboriginal burial site when it dug irrigation canals for a cotton farm. It also details conflicts between RussellStone Group, which managed the endowment’s farms in South Africa, and black families that were granted rights to some sites to graze cattle and access burial sites. Neither company returned calls or emails seeking comment.

But Brazil may be the most contentious of Harvard’s overseas adventures. A public prosecutor’s office in the northeastern state of Bahia, for instance, has said that it may sue to reclaim some of the 140,000-hectare farm owned by Harvard-backed Caracol Agropecuaria after finding that titles for about two-thirds of the property are invalid. In its most recent tax filing, Harvard valued its interest in Caracol at $87 million. Elsewhere in Bahia, villagers have protested the property titles of a farm that was in part sold to Harvard-backed Gordian Bioenergy, according to the report. The endowment has been seeking to end its relationship with Gordian, which is developing farms to produce both crops and energy, though it still controls assets it acquired through the company.

Alberto Pereira da Silva (left) and Juvercino da Silva gaze at land where Alberto’s cattle graze.
PHOTOGRAPHER: LIANNE MILTON FOR BLOOMBERG BUSINESSWEEK

In the neighboring state of Piaui, a Harvard-controlled company called Sorotivo Agropecuaria has been battling with Grun and five other plaintiffs who say they lost their land in 2004. Earlier this year a judge dismissed the lawsuit and said Sorotivo could acquire a new title from the state for the 27,000-hectare farm it controls. However, in his decision he said that both the plaintiffs and Sorotivo practiced land-grabbing on title acquisitions. Accusations of land grabbing, which can date back decades, became epidemic as Brazil’s farm belt expanded and were often linked to speculators falsifying titles in order to steal and sell public property used by subsistence farmers.

The judge, Heliomar Rios Ferreira, says that the state agency from which the plaintiffs said they got their titles didn’t have any records of the grants. He also says Sorotivo improperly extended a boundary of its vast farm, though this was in an area unrelated to the lawsuit.

The plaintiffs’ lawyer says their property titles are legitimate and that they will appeal. Harvard controls Sorotivo through a Brazilian farming company called Insolo Agroindustrial, which didn’t return calls and emails seeking comment. A spokesman for Harvard declined to comment on the litigation.

Alberto Pereira da Silva watches over his cattle.
PHOTOGRAPHER: LIANNE MILTON FOR BLOOMBERG BUSINESSWEEK

While Grun relocated, people who for generations have made their home in the region known as the Cerrado are living with the consequences of the dispute. Eurotides Paulo da Silva resides in a village below Insolo’s vast farm, which stretches on for miles and miles and evokes a moonscape when it’s between harvest and seasonal plantings. His son works on the farm. But locals, who hunted and collected honey and medicinal plants on the plateaus, say their way of life has been hemmed in over the last decade with the arrival of industrial farms.

Silva produces a document dated from 1991 that he says shows his grandfather also owned land on the plateau. His cousin, Alberto Pereira da Silva, makes a similar claim, saying they never challenged the loss of the properties because they felt intimidated. Says the cousin: “We feel like we are trapped without a way out.” —With Lianne Milton

DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Kiryandongo leadership agree to partner with Witness Radio Uganda to end rampant forced land evictions in the district.

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By Witness Radio team.

Kiryandongo district leaders have embraced Witness Radio’s collaboration with the Kiryandongo district aimed at ending the rampant violent and illegal land evictions that have significantly harmed the livelihoods of the local communities in the area.

The warm welcome was made at the dialogue organized by Witness Radio Uganda, Uganda’s leading land and environmental rights watchdog at the Kiryandongo district headquarters, intended to reflect on the plight of land and environmental rights defenders, local and indigenous communities and the role of responsible land-based investments in protecting people and the planet.

Speaking at the high-level dialogue, that was participated in by technical officers, policy implementers, religious leaders, leaders of project affected persons (PAPs), politicians, media, Civil Society Organizations (CSOs), and development partners that support land and environment rights as well as the Land Based Investments (LBIs) Companies in the Kiryandongo district, the leaders led by the District Local Council 5 Chairperson, Ms. Edith Aliguma Adyeri appreciated the efforts taken by Witness Radio organization to organize the dialogue meeting aimed at bringing together stakeholders to safeguard community land and environmental rights in order address the escalating vice of land grabbing in the area.

During the dialogue, participants shared harrowing accounts of the impacts of land evictions and environmental degradation, including tragic deaths, families torn asunder, young girls forced into marriage, a surge in teenage pregnancies, limited access to education, and significant environmental damage which have profoundly affected the lives of the local population in Kiryandongo.

Participants attending the dialogue.

In recent years, Kiryandongo district has been embroiled in violent land evictions orchestrated to accommodate multinational large-scale agriculture plantations and wealthy individuals leaving the poor marginalized.

According to various reports, including findings from Witness Radio’s 2020 research Land Grabs at a Gun Point, the forceful land acquisitions in Kiryandongo have significantly impacted the livelihoods of local communities. It is estimated that nearly 40,000 individuals have been displaced from their land to make room for land-based investments in the Kiryandongo district. However, leaders in the district also revealed in the dialogue that women and children are affected most.

The Kiryandongo Deputy Resident District Commissioner, Mr. Jonathan Akweteireho, emphasized that all offices within the Kiryandongo district are actively involved in addressing the prevalent land conflicts. He also extended a welcome to Witness Radio, acknowledging their collaborative efforts in tackling and resolving land and environmental issues in the district.

“Ladies and gentlemen, we all know that the land rights together with environmental rights have been violated in our district, but because we don’t know what our rights are, because we have not directly done what we could to safeguard our rights and now this is the time that Witness Radio has brought us together to safeguard our rights. I want to welcome you in Kiryandongo and be rest assured that we shall give you all the necessary support to help us manage these rampant cases,” Ms. Adyeri said in her remarks during the dialogue meeting.

The team leader at Witness Radio Uganda, Mr. Geoffrey Wokulira Ssebaggala expressed gratitude to the participants for their active involvement in the dialogue and revealed that Witness Radio’s objective is to find a holistic solution to the escalating land disputes in Kiryandongo district serving as an example to other districts.

“We are here to assist Kiryandongo district in attaining peace and stability because it stands as a hotspot for land grabbers in Uganda. Mismanagement of land conflicts in Uganda could potentially lead to a significant internal conflict. Everywhere you turn, voices are lamenting the loss of their land and property. Kiryandongo, abundant with ranches, suffers from a lack of a structured framework, which amplifies these land conflicts. The influx of wealthy investors further complicates the situation,” Mr. Ssebaggala disclosed.

Within the dialogue, Mr. Ssebaggala emphasized the need for the Kiryandongo district council to pass a by-law aimed at curbing land evictions as an initial step in addressing the prevalent land injustices.

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WITNESS RADIO MILESTONES

Kiryandongo authorities decry rising cases of land disputes

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The LC5 chairperson of Kiryandongo, Ms Edith Aliguma Adyeri, has saidnland dispute has impacted on people’s lives, dignity and children’s education in the district.

Just like other parts of Uganda, conflicts over land in Kiryandongo arise when individuals – who often are blood relatives – compete for use of the same parcel of land or when members of the community lay claim over ownership of unutilised government land.

Ms Adyeri further said land and environmental rights affect people both directly and indirectly, “and we are not hearing it from afar. It is already together with us [here], it has already affected us!”

She was speaking at a meeting which sought to discuss alternative remedies to salvage the appalling land and environmental rights situation in Kiryandongo at the district headquarters on Thursday.

The one-day dialogue was aimed at reflecting on the plight of land and environmental rights defenders, local and indigenous communities and the role of responsible land-based investments in protecting people and the planet.

It was attended by private companies, members of civil society and local government officials and organised by Witness Radio – an advocate for land and environmental rights in Uganda – in partnership with Oxfam, and Kiryandongo District leadership.

“Some people have even died, families are broken up, and brothers are not seeing eye-to-eye because of land rights. Access to justice is equally becoming very difficult because when you hire one lawyer that
lawyer will talk to learned friends, and they agree. They leave you in suspense,” Ms Adyeri said.

According to her, some children have not accessed education because of land and environmental rights.

Mr Jonathan Akweteireho, the deputy Resident District Commissioner of Kiryandongo, said enlightened people especially should be sensitive to the historical injustice of this area.

“We can never handle the Bonyoro land question without thinking about that history. It will be an injustice to the incomers, to the government and to the leaders who don’t understand,” he said.

“We had 38 ranches here which on the guidance of these international organisations, especially the World Bank, the government restructured them, allowing people to settle there, they were never given titles and up to today, there are big problems in all those ranches,” he added.

Mr Jeff Wokulira Ssebaggala, the executive director of Witness Radio, said that a well-functional land sector supports land users or holders and investors, reduces inefficiencies and provides mechanisms to resolve land disputes.

Mr David Kyategeka, the secretary to the Kiryandongo District Land Board, said the issue of land rights is very clear but the major challenge has been sensitising the locals to know what rights he or she expects to enjoy out of this very important resource.

Source: www.monitor.co.ug

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DEFENDING LAND AND ENVIRONMENTAL RIGHTS

Statement: The Energy Sector Strategy 2024–2028 Must Mark the End of the EBRD’s Support to Fossil Fuels

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The European Bank for Reconstruction and Development (EBRD) is due to publish a new Energy Sector Strategy before the end of 2023. A total of 130 civil society organizations from over 40 countries have released a statement calling on the EBRD to end finance for all fossil fuels, including gas.

From 2018 to 2021, the EBRD invested EUR 2.9 billion in the fossil energy sector, with the majority of this support going to gas. This makes it the third biggest funder of fossil fuels among all multilateral development banks, behind the World Bank Group and the Islamic Development Bank.

The EBRD has already excluded coal and upstream oil and gas fields from its financing. The draft Energy Sector Strategy further excludes oil transportation and oil-fired electricity generation. However, the draft strategy would continue to allow some investment in new fossil gas pipelines and other transportation infrastructure, as well as gas power generation and heating.

In the statement, the civil society organizations point out that any new support to gas risks locking in outdated energy infrastructure in places that need investments in clean energy the most. At the same time, they highlight, ending support to fossil gas is necessary, not only for climate security, but also for ensuring energy security, since continued investment in gas exposes countries of operation to high and volatile energy prices that can have a severe impact on their ability to reach development targets. Moreover, they underscore that supporting new gas transportation infrastructure is not a solution to the current energy crisis, given that new infrastructure would not come online for several years, well after the crisis has passed.

The signatories of the statement call on the EBRD to amend the Energy Sector Strategy to

  • fully exclude new investments in midstream and downstream gas projects;
  • avoid loopholes involving the use of unproven or uneconomic technologies, as well as aspirational but meaningless mitigation measures such as “CCS-readiness”; and
  • strengthen the requirements for financial intermediaries where the intended nature of the sub-transactions is not known to exclude fossil fuel finance across the entire value chain.

Source: iisd.org

Download the statement: https://www.iisd.org/system/files/2023-09/ngo-statement-on-energy-sector-strategy-2024-2028.pdf

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