Assessing the costs of tenure risks to agribusiness
ODI and TMP (Anna Locke, Lou Munden, Joseph Feyertag & Benedick Bowie)
Tenure risk – or the risk of dispute between investors and local people over land or natural resource claims – is endemic in emerging markets. There are hundreds of recorded incidents of tenure disputes creating delays, violence, project cancellation and even bankruptcy at a corporate level. These tenure disputes create lose-lose outcomes for investors, local people and national governments, while robbing emerging markets of the developmental benefits of responsible land investments. However, many investors are unaware of the problem or lack the time and resources to address it. Others lack the means to quantify the risks to business of tenure disputes. This report – based on consultation with business operating across the African supply chain – shines a spotlight on the severity of the issue and shows that tenure disputes can create substantial financial losses. It also presents a new publicly available tool, the Tenure Risk Tool, that investors can use to assess and manage tenure risk.