Smit Tit v. Mitr Phol: Ensuring Access to Remedies Against Land Grabbing by Transnational Corporations

Binit Agrawal analyses the global impact of a Thai court judgement, which provides a judicial forum to farmers from Cambodia, who were victims of transnational land grabbing.

On 31st July, the Bangkok South Civil Court admitted a petition by 700 farmers from Cambodia, whose land was grabbed by Mitr Phol, a giant sugar company based out of Thailand. In 2008-09, Mitr Phol’s subsidiaries leased land under concession from the Cambodian government. These lands belonged to the Cambodian farmers, who were forcibly evicted by the company and Cambodian government. As per the then UN Special Rapporteur on Cambodia, the company “hired armed forces and security guards to set up check points and restrict the use of roads”. This case is the first of its kind in Asia, paralleled in the west by precedents like Vedanta, which was sued in the UK for violations in Zambia. In this post, I will first, detail how the natives are permanently disenfranchised during the process of land grabbing in fragile countries; second, critically look at the defence presented by Mitr Phol; and lastly, display the importance of this judgement.

Land Grabbing in Fragile Countries

Long-term concessionary leasing of land by countries in the global south was promoted by the World Bank and the UN as a “win-win” situation. It was argued that fallow land cannot be developed without import of capital from the north. With the support of these institutions, the political elite in countries like Cambodia went about implementing leasing policies, which generally extend to 99 years. However, fair leasing can take place only when there are clear property rights in place.

Poorer countries tend to delineate land ownership through customs and informal arrangements and not by formal titles. Consequently, state machinery in these countries have complete control over land ownership. Cambodia, for instance, has classified over 80% of its territory as state land. Through a law enacted in 2001, it permitted the transfer of state public land into state private land, which can then be leased to private firms under concession. Similarly, Tanzania, another preferred choice for investors, classifies land into: reserved land (national parks and reserves); general land (belonging to the government); and village land (property of the community). While officially village land constitutes 70% of the total land, the Land Act, includes “unoccupied or unused village land” in its definition of general land. This gives the state the power to appropriate almost any land it wants, leaving the poor with few protections. Further, the Village Land Act, 1999 provides that foreigners can only buy or have lease-holding over general lands. Thus, every time they want to invest in arable village lands, they take the help of the state to transfer these village lands into the general category. In Laos too, only 30 per cent of land in the entire country is registered. Those not registered are free to be given out to the investors. These examples show that common lands in the global south, on which millions of livelihood depends, are effectively being converted into terra nullius, and being passed over to multinationals at a pittance.

However, such fluidity in land tenure is unidirectional. Land usually goes from being community land to government land, and hardly ever returns. The result is a permanent loss of land and community resources. One prime example is that of Bioshape’s investment in Tanzania. In return for investment in Jatropha cultivation, Bioshape got a 34,000 hectare concession for 99 years. Most of the land was village land. Within a matter of 3 years, it cleared the entire forest and sold the woods. Before it could start the cultivation of Jatropha, the company went bankrupt. The land continues to remain leased to the company as government land for 99 years and will lie unused for a long time unless the government brings amendments to its land laws. In Cambodia, after the government promised to review land concessions, it retained most of the land taken back from foreign investors. Similar stories have played out in Sierra Leone, Ethiopia, and many other countries.

Mitr Phol’s Defence

The arguments made by the farmers, including reliance on UN Guiding Principles on Business and Human Rights (UNGP) and the Thai Civil Code, are well documented by Amnesty International. My aim here is to critique the defence presented by Mitr Phol, which is common across companies accused of land grabbing. Mitr Phol argues, “we do not support encroachment on private land or forced eviction, or the destruction of private property, the investment in the Kingdom of Cambodia has followed a land concession process prescribed by Cambodian domestic law in conformity with the United Nations’ Guiding Principle on Business and Human Rights 2011”. This argument, however, hides two key loopholes: the domestic law and the UNGP.

Domestic law, in most of these countries, is a patchwork, purposively created for the benefit of the global and local elite. In Cambodia, the situation is worse due to its tumultuous history. Khmer Rouge, which had banned private property, destroyed almost all the documents related to private land ownership. As a result, most of the population does not have the deed for the land they live on. The Land Law of 2001 allows the state to give away state private land for lease holding of up to 99 years. The law also provides that “any person”, who has lived for more than 5 years over an identifiable tract of land before the law came into force, can “request” for definitive title of ownership.

There are two issues with this: first, most people are uninformed about such a provision. Hence, unless they claim the title before the land is leased out, they will be dispossessed. Secondly, most agricultural and pastoral lands do not belong to “persons”, they belong to communities. They do not live on such lands but jointly utilize them for their livelihood. As a result of this law, all open land is converted into state property in effect. The Act goes on to provide that any occupation of land belonging to the state after the act comes into force will be null and void. Hence, it becomes impossible for people to claim any right over the grasslands, ponds, forests, etc. which were the very means of their sustenance.

This legal situation has created a strong nexus between politicians, private armed forces and investors. The choicest arable lands are earmarked by senators in their area, captured with the help of private forces, and passed on to investors at a pittance, in return for business profits. The people get to know of the process only upon eviction. Today, no one knows exactly how much of arable land has been leased in Cambodia. As per estimates, over 70% of it has been.

The voluntary United Nations’ Guiding Principles are not of much help. By their very nature, they are a product of principled pragmatism whose aim was to achieve consensus between the various stakeholders. The guiding principles primarily create an onus on the state to review its laws and ensure its implementation. As we have seen, when the states themselves are dysfunctional, there cannot be fair changes to the law. As such, the guiding principles, due to their lack of enforceability, end up becoming an enabler for the corporations, who can always claim that they have abided by the guiding principles. In such a scenario, judgements like the one announced in Bangkok can be revolutionary.

What are the implications of this judgement?

The judgement, by allowing Cambodian farmers a forum for seeking remedies, has created a much-needed precedent. The victims of such human rights violations, especially in the Asian region, will now feel empowered to file more such class-action suits. Secondly, everyone will look at how an Asian court appreciates the arguments which are based on international human rights instruments and treaties like the guiding principles. Until now, most such cases have been fought only in the Western countries. For most victims, those legal systems are very far-fetched and costly. Thus, creation of precedents within the global south on trans-boundary human rights violations by businesses will certainly improve access to justice by reducing costs. Lastly, if successful, this case will help the farmers seek compensation from Mitr Phol, in the process destroying whatever value it may have captured by getting the concessions. This will pressurize multinationals to not engage with and perpetuate such land grabbing. This directly contributes to countries like Cambodia reforming their land laws and policy to encourage fairer investments.

However, going ahead, such cases can only be an additional tool in the hands of the victims. They cannot replace robust and enforceable international treaties which pressurize states to strengthen their landholding rights framework and companies to stop engaging with such rogue states. In the last few years, significant efforts have been made to come up with such a treaty. A Draft UN Treaty on Business and Human Rights has been proposed by an intergovernmental working group and is expected to be negotiated on by state parties in the coming months. Further, national efforts to implement the UNGP have also been ongoing. Over twenty-one countries, including Thailand, have already published a National Action Plan (NAP) on Business and Human Rights. Sixteen other nations are in the process of developing one.  NAPs go a long way in shaping judicial and public discourse on protection of human rights.

Binit is a final year law student at the National Law School of India University, Bengaluru. He is deeply interested in issues relating to Law, Development and Human Rights.