Guides for responsible land-based investments tend to focus on the beginning of an investment, but there has been far less attention to what happens to land at the end of an investment – when investments fail, projects reach a natural conclusion, or companies need to divest. National laws tend not to contemplate the end of an investment or the withdrawal of a company that has acquired community lands; best practices and international standards likewise provide limited direct guidance.
While there is little information available on the extent of land divestment, available data on land investment indicates a significant amount of company-acquired land globally is not being used for its intended investment purpose and that some lands may be beneficial for companies and communities to return. A recent study of 4,558 land deals covering an area of 179,120,562 ha estimated that 19 percent of deals and 23 percent of land area subject to investment had been abandoned, were still under negotiation, had expired (without any use or occupation of the land), or the investment had failed or ended (Borras et al, 2022). These estimates suggest that a significant proportion of land deals have not resulted in the anticipated commercial use, and raises the question of how governments and companies have responsibly considered and addressed community rights in the process.
Two recent cases of voluntary relinquishment of land by a company offer a rare opportunity to better understand land divestment, and to identify motivations, risks, and good practices to carry out a responsible exit that supports communities’ rights and benefits. Established in 1995, Green Resources, A.S. (GRAS) is the largest forest development and wood processing company in East Africa, with operations in Uganda, Tanzania, and Mozambique. The company recently carried out large-scale land divestments under different circumstances and at different scales in Mozambique and Tanzania.