Date: Wed, 8 Oct 2014 23:08:18 +0200
Feeding the One Percent: Foreign Investors’ Land Grabs in Africa and Asia,
Tax avoidance and Obscene Payouts to Directors
By <http://www.globalresearch.ca/author/grain> Grain
Global Research, October 08, 2014
food
Since the global food crisis of 2008, there has been a massive wave of
private sector investment in food production. The World Bank maintains that
this money means innovation, jobs and more food for a hungry planet.
But examining the investments made by one of the most active private sector
players in the global rush to acquire farmland – Chinnakannan Sivasankaran –
GRAIN has uncovered a worrying picture of how foreign investors are grabbing
the lands of rural communities in Africa and Asia and setting up complex
corporate structures to facilitate tax avoidance, kickbacks and obscene
payouts to their directors.
Since 2008, the Indian billionaire’s Siva Group has acquired stakes in
around a million hectares of land in the Americas, Africa and Asia,
primarily for oil palm plantations. His investments are channeled through a
web of shell companies based in offshore tax havens such as Singapore and
the British Virgin Islands, and companies specialising in acquiring lands
from poor rural communities, particularly in Africa.
* Liberia – Sivasankaran bought a controlling interest in
UK-registered Equatorial Palm Oil, with claims to two concessions. One was a
staggering 700,000 ha concession secured for around $3 million from two
anonymous companies registered in the British Virgin Islands; the other, a
controversial land deal involving people close to President Sirleaf that has
degenerated into violent conflicts with the local community who say they
were never consulted and who refuse to give up their lands.
* Sierra Leone – Several communities are outraged at a series of
concessions secured by UK army veteran Kevin Godlington on behalf of British
businessmen. These were eventually sold to Sivasankaran. Different
companies, same address, and same pattern in each case – deals reached via
pressure on chiefs, with members of local communities adamant that they have
never agreed to part with their land.
* Côte d’Ivoire – Sivasankaran bought DekelOil, a company based in the
tax haven of Cyprus and listed on London’s AIM stock exchange, which raised
money with an ambitious plan to lease lands for oil palm plantations and
contract growing in the Guitry region. Admin expenses here have totaled ten
times more than operating costs as Dekel’s executives draw generous salaries
and bonuses. Curiously, local community leaders say they never negotiated
any leases for their land and deny the company’s official claim that a deal
for the lands was signed.
* DR Congo – In 2009, a financial whiz kid from Toronto promised to
revolutionise African agriculture with a bold new startup called Feronia.
Ravi Sood bought up an old Unilever plantation, raised $20 million from
Sivasankaran and several funds managed by Sood. But the company has declared
escalating losses every year, its stock price has tanked and local
communities say working conditions and services provided by the company to
the community have deteriorated badly. This has not stopped Feronia from
making handsome payouts to its directors, one of whom is a right-hand man to
President Kabila. Nor did it stop the UK’s CDC and other European
development finance agencies from taking over the company and bailing out
its shareholders last year.
* Papua New Guinea – Sivasankaran-owned Geoff Palm, based in the tax
haven of Labuan, Malaysia, took control of a 110,000 hectare concession in
East Sepik Province that belonged to 230 local clans before it was converted
to a special lease behind their backs and snapped up by a local MP, who then
leased it to a mysterious Australian company, SPV. A month later, SPV sold
it to Geoff Palm. Locals say they were never consulted – they haven’t even
seen the papers that transferred their lands, and don’t know who signed
them.
“The companies Sivasankaran has invested in are far better at funnelling
generous payments into the pockets of their directors than they are at
producing food,” says Devlin Kuyek, a research with GRAIN. “Sivasankaran
symbolises a new wave of investors that are stripping peasant farmers of the
main assets they need for their livelihoods and for producing food for their
communities – their lands.”
Instead of protecting local people or holding investors to account,
governments are providing these investors with generous incentives and
support. The door is thus left wide open for financial players like
Sivasankaran to grab lands and make quick profits, permanently undermining
food systems and the livelihoods of farmers in the process.
There are much more effective methods to generate investment in agriculture,
in ways that keep control and profits in the hands of local farmers. The
peasant-owned and controlled palm oil cooperatives in Honduras are one
example. Traditional oil palm cultivation and processing on mixed farms or
semi-wild groves in West and Central Africa is an even stronger model for
how local people – especially women – can reap economic and social benefits.
The global expansion of oil palm production by vertically-integrated
corporations like the Siva Group is a clear threat to food sovereignty.
Communities – who have cared for ecologically vital tropical forest for
generations – cannot be an afterthought to quick profits. Their rights and
access to land must be protected.
Read the report: <http://grain.org/e/5048> grain.org/e/5048
(image/jpeg attachment: image001.jpg)