Procuring land for renewable energy with responsibility
Renewable energy (RE) has a crucial role to play in mitigating climate change. Majority of RE deployment will come from utility-scale solar and on-shore wind energy, which requires acres of land.
Majority of “easily available” land has already been used in the RE push over the last decade. With more than 300GW of RE capacity in India (of a target of 450GW) yet to be deployed, more land is needed as RE continues to be deployed, making it an increasingly contentious resource. While utility scale solar power plants require relatively flat land in sun-rich areas, on-shore wind energy systems usually find rounded hills, open plains near a coastline and valleys suitable.
In this article, we speak to Pinaki Halder, Director of National Programmes, Landesa, and one of the partners of the Responsible Energy Initiative India, on the land and RE nexus. We explore several issues that have come up in accessing land for RE development and discuss how land procurement can be done in a way that is responsible, builds resilience, and creates value for all stakeholders involved.
Responsible Energy Initiative India (“REI India”): There are several anecdotal stories in the media that cite issues faced by RE companies in land procurement for RE development, and increasing discontent in some communities who have given their land for RE development. RE companies maintain that they follow due diligence and honour the contracts that landowners have signed. What do you see as the disconnect between the different perspectives of landowners and RE companies?
Pinaki Halder (“PH”): RE companies may approach and negotiate with landowners through a mediating agency engaged by them for the purpose of land procurement. Alternatively, companies may rely upon the government to procure land for RE projects through specially formed special purpose vehicles.
Majority of land holdings in India (about 86%) are classified as marginal or small–that is, below two hectares of land. Along with small landholding, commons make up to a third of India’s land area. They have a significant cultural and economic importance for communities. Hence, communities whose land is being used for RE deployment tend to be concerned with three main issues:
- Loss of livelihoods from the land,
- The adequacy of the compensation offered, and
- The loss of social status associated with land ownership.
All these elements can contribute to a disconnect between the different perspectives of landowners and RE companies. For example, there are instances when small landholders resist selling land since they anticipate that an escalated price may be offered during a later stage of the RE installation. Land in rural India is one of the most coveted and valuable assets, and its value can be higher in the absence of well-functioning capital markets, insurance markets and social-safety nets.
There are more contributing factors to the increasing discontent, such as:
- Post-signing of contracts, the landowners look back at the income that was generated from their land, how it supported household food security, helped the household absorb economic shocks, and provided a hedge against high inflation or economic recession. They might then feel disenchanted at having lost these benefits. Furthermore, there is a feeling of loss of a secure form of holding wealth, which provides some insurance value, as well as old-age support to its owners.
- Landowners may come to realise that their hard-earned farming skills are not transferable to other occupations. The landowners’ emotional well-being may be compromised as their social status and ancestral identity are lost.
- Even after having received all the compensations agreed upon between the RE company and the landowners, the latter may not always have the skills and temperament to invest the compensation amount profitably in non-agricultural uses.
- Poverty and a lower level of human capital for smallholders limit alternative earning options, causing owners to be reluctant to sell the land unless they receive a price above the market rate.
REI India: Beyond compliance, what can RE companies do to ensure that land-use change is done in a way where RE development contributes to building community resilience?
PH: Participatory approaches — including engaging with the community early and before the land procurement process starts, and ensuring community representation and inclusion in all kinds of discussions — are key to building community resilience and reducing risks associated with land use change due to RE development.
The community and project leaders must strive to envision optimum improvements that could result from the land use change. The discussion between the RE company and community should seek to be innovative, while exploring the range of benefits to pass on to the affected community. It would obviously help if the company is open to adjusting the investment in ways that promote long-term community values and interests post land procurement.
This consultation exercise should seek to address the ways in which the changed land use will affect livelihoods and other associated vulnerabilities, including changes that befall agricultural labourers who work on the land being procured.
Ideally, the exercise should include community women and marginalised families, since there is a risk that their interests will not be considered unless the company or the government makes a concerted effort to include them.
Companies should prioritise siting energy projects on lands already degraded by human activities, which would help to protect natural habitats, forests and agricultural lands with high productivity. Lands with high social and environmental value should be avoided wherever possible.
REI India: What impact can improved land literacy in local government and communities have on RE development? How would it benefit the RE companies?
PH: “Land literacy training” usually entails educating the community on their land rights and land administration processes, such that they understand the basic principles and processes related to land ownership. In the context of RE development, the promotion of community land literacy should ideally address questions related to the uncertain changes to livelihoods and other vulnerabilities that often accompany land use change.
The land literacy of an affected community should be grounded well ahead of the land procurement process. It should have emphasis on providing clarity on current land uses and how the new land uses would change the land classification, address myths surrounding the land recordation and updation process so that landowners understand what actions they need to take, and provide greater understanding on the process by which land is transferred to the company.
Another essential component of such literacy promotion would be to guide the affected community members on how they can invest the compensation they receive for the land, and guide them on how to explore developing alternate skills that can allow them to earn a living in the local context. The RE company would benefit by investing resources in land literacy, skill development and exploring opportunities for the agricultural workforce, specifically women to receive remunerative employment in the process of installation and operationalizing the RE unit. Early in the process, the company may consider engaging an accredited agency to identify the community’s land literacy and other information needs.
It is also important to help the community understand formulae that will be used to calculate compensation for different land classifications, the meaning of the informed consent clause, and rehabilitation and resettlement component being considered by the company. This understanding would help to ensure that the process of land procurement either by leasing or direct purchase will involve fewer disputes. The company should have similar discussions with local government representatives.
These discussions on land literacy meant for the entire affected community will contribute to building trust between the local government and the affected community. The RE companies should take this initiative to minimise the conflict that can arise out of inadequate understanding by the community and local government. This platform further will ease the tension in the process of land procurement by providing opportunity to the community to weigh the benefits offered against the perceived loss of land and the associated emotional loss.
REI India: What role can investors play in embedding responsible land procurement practices with developers?
PH: It is important for local communities, governments, and landholders to take more interest in the ultimate stake of the RE development at an early stage. Simultaneously, it is important for RE project developers to secure suitable investors who understand or are given to understand the complexities involved in land procurement and are willing to support measures that consider the interests of primary, secondary, and tertiary tenure holders.
The RE project developer could also educate the investor to foresee the risks associated with land procurement in a less transparent, clumsy manner which might have unwanted consequences in the process of installation of RE unit. There should be a mutually agreed plan with a budget considered to mitigate the impacts on vulnerable populations including women and Indigenous Peoples.
REI India: Can you give us an example from your work where local government, communities and the private sector have worked together to ensure equitable and just development of land?
PH: In India, Landesa has been working on a project where a private (corporate) sector player aspires to embed women’s economic empowerment, agricultural skills and knowledge development across the entire value chain of production. The local government and a women’s collective at local government, called Sangha, is supporting the initiative by providing opportunities for the women from the disadvantaged section of the community to lease land at a market rate from a landowner and then cultivate crops for sale in the market. The women are exercising control over all aspects of farming and taking decisions related to farming on their own.
Landesa facilitated capacity development of the women’s groups to improve their confidence in negotiating land leasing terms with landowners, and promoted land literacy to enable them better understand their lease clauses, supporting them to establish themselves as farmers in a traditionally patriarchal society.
REI India: Could you share with us about how you and Landesa got involved with the Responsible Energy Initiative India, and how you’ve been working with the consortium of partners since?
PH: During the later part of 2019, Forum for the Future got in touch with Landesa to introduce the Responsible Energy Initiative in India, which was planned in partnership with WRI and TERI.
Subsequent discussion between the REI India team and Landesa India team paved the way for joining the REI India consortium in early 2020, with the primary objectives to 1) explore the environmental and social impacts of renewables because of land procurement and land use change, and 2) how the renewable sector could emerge as just and human rights upholding net positive business model. The Initiative now has several other expert partners and consortium members whose experiences and insights have been deeply valuable for us.
The first step was considered as a collaborative research effort that would act as an engagement tool, as well as providing foundational knowledge to take the Initiative forward.
The onset of the pandemic slowed down the start of work and visiting the RE unit was challenging. Landesa, which has long worked in India to address the land rights challenges by working in collaboration with the governments, provided inputs to the research findings through desk research and subsequent field visits to solar parks and windmill sites.
Since then, Landesa has continued to work as part of the Responsible Energy Initiative in Phases II and III of the project. The contributions from Landesa focuses on land issues, the challenges associated with land procurement and the mechanisms followed by government and private developers to procure land within the framework of existing legislation and land policies of state governments.
The Responsible Energy Initiative (REI) is a multi-year programme working to ensure renewable energy in Asia achieves its full potential and creates value in a way that is ecologically safe, rights-respecting and socially just.
REI India is a collaboration under this programme, led by Forum for the Future, TERI, and WRI India, with expert partners Landesa, Business and Human Rights Resource Centre, CEEW, Climate Group, Consensus Building Institute, and WWF India.
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