Land leases and concessions in the Lao PDR - A characterization of investments in land and their impacts
in which investors demand to secure their access to land while it is still available, perhaps without immediate plans for development. Furthermore, during deal implementation, projects might face a number of issues, such as managerial and technical difficulties (Nolte et al. 2016), that lead them to limit their implementation to a small portion of the originally planned development area. Finally, GoL authorities have been shown to often grant areas in the initial negotiation of concession agreements that are unrealistic or unavailable, a problem exacerbated by the tendency to grant land before surveying it (Lu and Schönweger 2019). Consequently, total area granted is not always indicative of the actual extent of project operations, and therefore is not the most suitable metric when investigating issues related to potential impact. For certain questions, it is more appropriate to consider the actual area that has been developed by the investor.
The land deal inventory documents 539,622 ha developed in the agriculture, tree plantation, and mining subsectors. But the area developed in these subsectors comprises only 56% of the total area granted (see Figure 23). Furthermore, disaggregation of area developed by subsector reveals significant differences. A relatively high share of area granted has already developed in the tree plantation and mining subsectors (61% and 63%), while in the agricultural subsector only 36% of granted area has been developed. The high share of developed area for tree plantation projects may be related to PM/13, which aimed to limit the further expansion of tree plantation projects by prohibiting the approval of new projects for rubber and eucalyptus and thus limiting those crops’ development to already existing projects. This may, in turn, have incentivised those projects to expand to the maximum size possible resulting in a higher share of area granted being eventually developed. 959,256
1,000,000 Area granted (ha)
900,000
Area developed (ha)
800,000 700,000 600,000
539,622
500,000
395,875
400,000
Figure 23: Comparison of total area granted and total area developed by subsector
300,000
339,764 223,617
215,659
200,000 100,000 -
81,412
63%
36% Agriculture Agriculture
Tree plantation plantation Tree Area granted (ha)
Granted versus developed land by stage of land deal development
Further relevant insights into the discrepancy between the amount of area planned for land deals and the area developed is provided by disaggregating of area granted and area developed by stage of land deal development. A total of 480,049 ha had been developed by deals in their active development stages (start-up/construction and operational) at the time of data collection. This constitutes 65% of the area granted to deals in these two stage categories. The remaining 257,983 ha granted to these deals were not yet developed (see Table 19). For completed deals (in the stage, “contract complete and operations concluded”), 69% of the granted area has been developed. This may be a good indicator of
48
242,551
61% Mining Mining
56% All deals deals All
Area developed (ha)
the total proportion of land expected to be developed out of the originally granted area over the lifetime of an active deal. As seen previously, 65% of the area granted had already been developed by deals in the two stages: “start-up/construction” and “operational”. This 4% difference between the share of area developed by deals in their start-up and operational stage, and the share of area usually developed over the lifetime of a land deal suggests that overall these active deals had nearly reached their expected level of development. The total area granted to deals that have temporarily or ultimately finished their operations amounts to nearly 160,000 ha, or 16.4% of the total area granted. The undeveloped land of these deals could either be redistributed back to the government, or even allocated to deals that are interested and eligible to expand their operations, but have not been granted more land.