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Accountable Development To Communities

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

Accountable Development To Communities

The committee calls for the protection of projects’ host communities.

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By Witness Radio team

Development Banks and investors have been urged to invest in activities or projects that do not deprive individuals or communities of access to land or land-associated resources on which they depend for their livelihoods.

The negative effects arising from the projects funded by some development banks and investors have forced the Committee on Economic, Social, and Cultural Rights General Comment No. 26 (2022) on Land and Economic, Social and Cultural Rights while giving its general comment on land to call on development banks and states hosting the projects to refrain from actions that interfere, directly or indirectly, with the enjoyment of the Covenant rights in land-related contexts outside their territories

In 2014, an investigation by the International Consortium of Investigative Journalists revealed that some 3.4 million of the most vulnerable people were left homeless by the projects funded by World Bank. Till today, more of the bank’s funded projects continue to harm communities.

Currently, there is an ongoing mediation process between the project-affected persons of Kawaala Zone II and Kampala Capital City Authority, an implementer of a World Bank funded-project over human rights violations.  In December 2020, their houses were marked with an x as a sign of demolition and later some of the residents’ crops got destroyed.

In the Pakwach district, the Paten clan continues to experience gross human rights violations arising from the Wadelai Irrigation Scheme implementation funded by the African Development Bank (AfDB).

According to the communities, the project forcefully acquired more land for the Wadelai Irrigation Scheme project under The Farm Income Enhancement and Forestry Conservation Project-Phase 2 (FIEFOC-2). This was contrary to the earlier understanding with the community that the project would utilize 365 acres which the community had freely offered for the project. Instead, 365 hectares were forcefully acquired.

The committee while reviewing state parties’ reports, claims has encountered an increasing number of references to the negative impact on individuals, groups, peasants, and indigenous peoples’ access to productive resources, as a result of international investment negotiations, agreements, and practices, including in the form of public-private partnerships between state agencies and foreign private investors

The committee says land transfers are quite often financed by international actors, including public investors such as development banks financing development projects requiring lands, such as dams or renewable energy parks, or by private investors.

“Parties must take concrete measures to prevent their domestic and international policies and actions, such as trade, investment, energy, agricultural, development and climate change mitigation policies, from interfering, directly or indirectly, with the enjoyment of human rights that applies to all forms of projects implemented by development agencies or financed by development banks.” The committee noted.

Adding that “ there is a need to establish the necessary regulatory mechanisms to ensure that business entities, including transnational corporations, and other non-State actors that they are in a position to regulate, not impair the enjoyment of Covenant rights in land-related contexts in other countries and moving the necessary steps to prevent human rights violations abroad in land-related contexts by non-State actors over which they can exercise influence, without infringing the sovereignty or diminishing the obligations of the host States.”

The committee further emphasized the conduct of human rights impact assessments before making such investments and regularly assess and revise them. Such assessments shall be conducted with substantive public participation and the results shall be made public and inform measures to prevent, cease and remedy any human rights violations or abuses.

In addition to responsible investment, the committee directed states to take all necessary measures to respect human rights defenders and their work, including concerning land issues and to refrain from imposing criminal penalties on them or enacting new criminal offenses to hinder their work.

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Accountable Development To Communities

World Bank extends the Lubigi drainage project dispute resolution process for another six months.

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By Witness Radio Team.

The World Bank, Accountability Mechanism has granted the Parties involved in a dispute resolution case in Uganda an additional six months with expectations of achieving better mediation in the ongoing dispute resolution between the Kampala Capital City Authority (KCCA) and the Projected Affected Person.

According to the brief by World Bank Accountability Mechanism Secretary, Ms. Orsolya Szekely, the DRS extended the dispute resolution process which was supposed to end in December 2022, to six months which began this January 2023. Orsolya believes the added time will help all the parties resolve their differences.

The World Bank Accountability Mechanism is an independent complaints mechanism for people and communities who believe that they have been or are likely to be harmed by a World Bank-funded project.

The extension follows the failure to negotiate between the two parties in one-year-long negotiations of the dispute resolution process which started in December 2021.

The Kampala Capital City Authority is implementing the Lubigi drainage Channel expansion project under the KIIDP-2 with funding from the World Bank.

On December 3, 2020, the Kawaala communities were shocked to find KCCA representatives in their village, accompanied by armed police officers, distributing eviction notices and informing residents that they had 28 days to vacate their homes. A few days later, for instance, in the wee hours of 05th/12/2020, the community started experiencing attacks by armed anti-riot police and workers of the construction company; destroying properties, without any prior consultation or plan for compensation and resettlement.

In a bid to find justice, in June 2021, the affected community filed a complaint with the World Bank’s Inspection Panel raising concerns about forced evictions during COVID-19.

According to the complaint filed against KCCA, the implementor of the KIIDP-2 project excluded the affected community from benefiting from the Project’s Resettlement Plan (RAP) and instead resorted to the use of force to have them evicted. Following the intervention of the World Bank, KCCA conducted another Project’s Resettlement Plan. However, according to the affected community, the process was rushed and intended to promote inequality.

The project is marred with retaliatory attacks from people believed to be project implementers against project affected community.

The Accountability Mechanism’s operating procedures allow for a one-year period for all parties to resolve, with a six-month extension period in case parties fail to reach an amicable understanding.

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Accountable Development To Communities

Festive holiday forced evictions: armed gangs linked to a Chinese tree planting company descend on a village, severely beat and wound dozens of villagers.

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By Witness Radio Team

A festive holiday is happily waited for by many people in every corner of the world. It’s a period for merry-making and family get together. In Africa, particularly in Uganda, most people travel from towns to their ancestral homes to spend that time with family members, make parties and meet longtime childhood friends.

For a community at Kicuculo village, Kiruuma Sub-county, in Mubende district was a different experience. The much-awaited season was marred with violence, anxiety, and death threats from Formasa Tree Planting company targeting the community’s land to expand its commercial trees business.

Formosa is a Chinese-owned tree-planting company planting pine and eucalyptus trees in the Mubende district, Central Uganda.

Ugly incidents started happening on December 7th, 2022 in the wee hours of that night. A group of over 20 casual workers linked to Formasa invaded homesteads, started cutting people with pangas, and beat everyone found in their houses accompanying them with threats to kill them if they don’t leave the land.

Three people were hacked with pangas and clobbered with sticks by armed company laborers in an attempt to force them off the land they have lived on for decades.

While more than seven (7) people got hospitalized after sustaining deep cut wounds during the scuffle. Mr. Byakatonda David who sustained a deep cut wound on the head narrates his ordeal. “At around 11 pm, I heard my neighbor crying for help, and decided to respond. On reaching there, I found a group of armed workers from Formosa destroying his house while others were beating him. When one of them saw me, “he said, he is also among the people on our wanted list”.

“I wanted to run but was immediately caught by the rogues. They beat me and left me unconscious with deep cuts on my head. I got back to my normal senses admitted and bandaged at Maduddu Health Center II.” The father of 13 revealed this in his interview with the Witness Radio team.

According to his relatives, they found him lying in a pool of blood and rushed him to the hospital. “We waited for someone who had gone to the neighborhood to respond to an alarm, but he wasn’t returning. Due to fear, we searched only to find him bleeding on his head and lying in blood. I called the chairman on the phone who helped with a BodaBoda motorcycle to rush him to the hospital.” His wife revealed.

Violent forced evictions in the Mubende district occurred despite a government ban on evictions during the festive seasons. The lands minister, honorable Judith Nabakooba on December 2022, ordered that no family should be evicted during the festive holiday. She directed police and Resident District Commissioners (RDCs) to respect the order.

Mr. Byamukama Yuda, an area chairman of Kicuculo village told Witness Radio that Formosa company is a threat in their village because of continuous and violent attacks on his people for refusing to surrender their land to the company to grow commercial trees.

“Ever since the company started operations in 2012, the company under the protection of the police has been grabbing people’s land, beating them, raping women and young girls, cutting them, and causing arrests to community land rights defenders. Over 2500 hectares of people’s land have been grabbed and rendered families landless. And for only 2022, over 100 people have been terrorized by angry company workers.” He added.

He further said company workers seem to have powerful people protecting them and respect or fear no one. Adding that on Christmas, a group of workers went to his home and threatened him to be castrated in front of his wife and children.

The same company in 2017 caused the arbitrary arrest, and imprisonment of 5 community land rights defenders for 15 years and 35 years on murder and other charges. The five among others include; Paul Sinamenya, Richard Ssemombwe, Fenehansi Kaberuka, Esau Hategeka, Godfrey Bukenya, Yonnah Ssebanenya, and Sserugo Sam Ssemigo

Witness Radio has since appealed against the conviction on grounds that the evidence relied on by the court was doctored.

When we contacted the Company Manager, Ms. Annah Kyoheirwe, she declined to discuss the allegations. She said she was busy attending a meeting and hung up.

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