Agro EcoEnergy land deal, Tanzania

Resistance by local villagers who were to be evicted and concern for wildlife stopped the Swedish Agro EcoEnergy project for sugar and ethanol production in Tanzania.


Description
In 2006 the Swedish company SEKAB signed a Memorandum of Understanding with the Government of Tanzania to cultivate 20,000 hectares of sugar cane for the European biofuel market. The area targeted by the company is located 20 km from Bagamoyo town and it was given in 1974 to the Government of Zanzibar by Tanzania’s first President for livestock production. The ranch was then closed in 1994 and the land returned under the control of the Tanzanian government. Since then the latter considered the area uninhabited and unused, despite many people have been living there in dependence on forest resources. In 2007 SEKAB chose ORGUT, a Swedish consultancy firm, to conduct the Environmental and Social Impact Analysis (ESIA). ORGUT’s ESIA found out that more than 1000 people were living within the project’s area and showed some critical issues such as a huge water requirement, the possible loss of biodiversity and common resources, including the wildlife in the nearby Saadani National Park, rising conflicts between communities, the increase of communicable diseases, as HIV and malaria, due to the influx of workers and the growing of social interactions. Despite these risks, SEKAB altered ORGUT’s conclusions and submitted a revisited and softened version of ESIA to the National Environmental Management Council, which was approved in 2008. Before starting any operations, SEKAB in 2009 sold the project to the Swedish company AgroEcoEnergy as a consequence of the international crisis and lack of funds. The new company revisited the project by planning the production of sugar cane for the local market and the production of ethanol for the generation and supply of electricity. The African Development Bank Group accepted to provide secure funding for this project on the condition that the ADBG’s Involuntary Resettlement Policy and the International Financial Corporation’s Performance Standards on Environmental and Social Sustainability were complied by AgroEcoEnergy. Both standards encourage investors to avoid resettlement whenever possible or to minimized negative impacts if resettlement is unavoidable. The company mandated in 2010 International Development Consultants Limited to carry out the first Resettlement Action Plan in accordance with funders’ standards. The RAP identified 1374 people to be affected by the project and eligible for compensation. Since the Government didn’t recognize people’s land rights, the company would have had to cover the full cost of compensation and resettlement, causing the slowing down of the project. After a year of negotiation, the Government decided to act as if the land was legally occupied and, according the Land Laws of 1999, recognized 815 people eligible for compensations. This census didn’t include all those impacted by project like Barbaig pastoralists or the illegal charcoal makers. Moreover, the Land Laws only provide monetary compensation and fail to comply with the funders’ standards. For this reason, the company was supposed to bear the costs of providing new houses and land for those living in the area. In 2013 Ecoenergy acquired a derivative right of occupancy for 99-years, but in June 2016 Tanzanian government took the decision to halt the project. Action Aid considered this a "victory" for vulnerable local communities and for the surrounding wildlife.  As reported some months earlier in The Guardian (21 October 2015), Per Carstedt, executive chairman of the Swedish company Agro EcoEnergy, had a dream for  land on the north Tanzanian coast,  a dream quite similater to that proposed for the Tana Delta in Kenya by other investors. Under his firm’s plan, farmers who once depended on subsistence work would earn wages on a sugarcane plantation or from selling sugarcane they grow to a sugar mill. The factory wouldl process sugar for export as well as for ethanol. The fields would be crisscrossed with irrigation canals and treated with a mix of organic and synthetic fertiliser. Within a few years, Tanzania would be the biggest sugar producer in theEast African Community. Carstedt was adamant that large-scale farming projects are central to meeting Africa’s rising food needs. “What can a smallholder do if he doesn’t have access to infrastructure, access to market, access to training? Well, he does what he’s done for generations – produce the food he needs to survive,” Carstedt said, speaking to The Guardian in his office halfway between the project area of Bagamoyo and Dar es Salaam.  However, the shelving of the project in 2016 had been foreseen in the financial press. Thus The Economist Intelligence Unit had reported on 2 June 2015 that the proposed US$620m sugar project in Bagamoyo (some 75 km north of Dar es Salaam) faced an uncertain future, following the decision by a number of key backers to withdraw their financial commitments.              
Basic Data
NameAgro EcoEnergy land deal, Tanzania
CountryTanzania
ProvinceBagamoyo district
Accuracy of LocationHIGH local level
Source of Conflict
Type of Conflict (1st level)Biomass and Land Conflicts (Forests, Agriculture and Livestock Management)
Type of Conflict (2nd level)Land acquisition conflicts
Agro-fuels and biomass energy plants
Establishment of reserves/national parks
Specific CommoditiesLand
Sugar
Water
Ethanol
Electricity
Project Details and Actors
Project Details
The project at full operations was expected to process approximately 1 million tonnes of sugar cane annually and produce 125,000 tonnes of sugar and deliver 100,000 megawatt hours (MWH) of power to the national grid and produce 8 million litres of Ethanol.
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Project Area (in hectares)22,000
Level of Investment (in USD)500,000,000
Type of PopulationRural
Start Date01/06/2009
Company Names or State EnterprisesAgro EcoEnergy (T) Ltd/EcoEnergy Africa AB (Ecoenergy) from Sweden
Relevant government actorsGovernment of Tanzania
International and Financial InstitutionsAfrican Development Bank (AfDB)
Swedish International Development Cooperation Agency (SIDA) (SIDA) from Sweden
Environmental justice organisations and other supportersTake Action: Stop EcoEnergy’s Land Grab in Bagamoyo, Tanzania, http://www.actionaid.org/sites/files/actionaid/stopecoenergy.pdf
The Conflict and the Mobilization
Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginIn REACTION to the implementation (during construction or operation)
Groups MobilizingFarmers
Indigenous groups or traditional communities
International ejos
Pastoralists
Conservationists
Forms of MobilizationDevelopment of a network/collective action
Lawsuits, court cases, judicial activism
Objections to the EIA
Public campaigns
Impacts
Environmental ImpactsPotential: Biodiversity loss (wildlife, agro-diversity), Food insecurity (crop damage), Loss of landscape/aesthetic degradation, Soil erosion, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Reduced ecological / hydrological connectivity
Health ImpactsPotential: Malnutrition
Socio-economic ImpactsVisible: Displacement, Loss of livelihood, Land dispossession, Loss of landscape/sense of place
Potential: Increase in violence and crime, Social problems (alcoholism, prostitution, etc..), Increase in Corruption/Co-optation of different actors
Outcome
Project StatusStopped
Pathways for conflict outcome / responseCompensation
Land demarcation
Court decision (undecided)
Migration/displacement
Technical solutions to improve resource supply/quality/distribution
Under negotiation
New Environmental Impact Assessment/Study
Project temporarily suspended
Development of AlternativesBy June 2016, the Swedish Agro EcoEnergy project appears to have been shelved by the Tanzanian government, and the villagers threatened with eviction will remain in their land.
Do you consider this as a success?Yes
Why? Explain briefly.A mixture of concern for conservation of wildlife and reluctance to evict many villagers explains why the project for large scale production of sugar and ethanol had been (apparently) stopped by June 2016.
Sources and Materials
References

Fabio de Blasis, INVESTIMENTI IN AGRICOLTURA IN TANZANIA TRA LAND GRABBING E TENTATIVI DI BEST PRACTICES. I CASI SUN BIOFUELS ED ECOENERGY NEI DISTRETTI DI KISARAWE E BAGAMOYO, tesi di laurea discussa alla facoltà di scienze politiche, Alma Mater Studiorum, Università di Bologna, A.A. 2012-2013
[click to view]

Alanna Taylor, LARGE-SCALE LAND ACQUISITIONS IN TANZANIA: A CRITICAL ANALYSIS
OF THEIR IMPLICATIONS ON WATER SECURITY

Links

Ecoenergy, accessed June 15, 2016
[click to view]

African Development Bank Group, Bagamoyo sugar project, Executive summary of the environmental and social assessment
[click to view]

Ariel Zirulnick, “Tanzania sugar project leaves bitter taste for farmers caught up in land disputes”, The Guardian, 21 October 2015
[click to view]

Finnigan Wa Simbeye, “Tanzania: Bagamoyo Sugar, Power Project ‘on course’”, 11/5/2015, Tanzania Daily News,
[click to view]

Mats Widgren, Swedish land grab in Tanzania causes protests, March 22 2013, farmlandgrab.org
[click to view]

Charlie Hamilton, Tanzania: Locals to be displaced for Agro EcoEnergy's sugar plantation yet to compensated; includes company's comments, Business and Human Rights Resource centre, Published on: 30 November 2015
[click to view]

"Tanzania: Dam Project Halts 'Victory' for Vulnerable Communities - Agency", 29 June 2016, AllAfrica
[click to view]

ActionAid, Take Action: Stop EcoEnergy’s Land Grab in Bagamoyo, Tanzania, March 2015
[click to view]

Media Links

News by Kizito Makoye (Thomson Reuters Foundation) | 6 June 2016
[click to view]

Other Documents

Waiting for land compensation
[click to view]

Meta Information
ContributorCarla Petricca
Last update27/07/2016
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