Environmental Engineering Reference
In-Depth Information
resources. On other occasions junior mining companies have collaborated with local
authorities to avoid or minimize compensation.
Some jurisdictions restrict land compensation to private land; state land is exempted
from compensation. State land, however, while unused by the government may neverthe-
less be claimed as cultural land by local communities. At the time of allocating the mine
concession, the government (and hence the mining company) may not recognize these
claims. Ignoring such land rights to deny compensation is likely to lead to long-lasting
land conl icts. The same is true of delaying compensation; allegations of wrongdoing by
the mining company will emerge.
The ways and conditions under which land (and land rights) is transferred are import-
ant. Land transfer should follow existing formal and traditional laws, and, of course,
should respect human rights. Land transfer and compensation depend on variables such as
the nature of lands themselves, prevailing land law, the way land is used, ownership, type
of transaction, traditional land transfer practices, or mediation of the transfer process.
Complex traditional land ownership and land rights combined with schedule pressures
in mine development too easily lead to ignoring or by-passing cultural procedures for
land compensation. Mining companies are tempted to resort to government agencies or
local authorities as the best practical way to deal with the host community (Wiriosudarmo
2002). This, of course, invites abuse of power by local authorities, and may also lead to
corruption. No matter what the time constraints are, compensation for traditional land
rights should follow traditional procedures which usually means that the process cannot
be rushed. Financial compensation is necessary, but insufi cient and insulting to the com-
munity if local traditions are not followed.
The ways and conditions under
which land (and land rights) is
transferred are important.
No matter what the time
constraints are, compensation
for traditional land rights should
follow traditional procedures.
Compensation: Cash or Kind?
Failure in the adopted compensation scheme is one of the principal sources of project risk,
especially for mining projects that require large tracts of land. It is also one of the chief
ways that the poor subsidize development.
Most countries have land acquisition laws that require prompt and adequate monetary
compensation for people who lose land or property. However, many remote rural econ-
omies are largely based on reciprocal exchange of goods and services. Since communities
with non-monetized economies are not well accustomed to managing cash, cash com-
pensation has many inherent risks. People may change their lifestyle, start gambling and
drinking or spending on luxury items, until the received money is exhausted.
Experience is that the best strategy for preventing landlessness and the concomitant
threat to livelihoods is 'land for land' compensation. Guggenheim (1990) cited a popu-
lar saying among the Havasupai Apache Indians in the United States, a people displaced
repeatedly by development projects: ' Land is like diamonds but money is like ice '. Displaced
people face a high risk of landlessness if measures are not taken to ensure that the land
they have foregone is replaced, either by the project or by the displaced people themselves.
The goal of 'land for land' compensation is to provide land comparable to that on
which the livelihoods of displaced people are based. World Bank OP 4.12 states ' Whenever
replacement land is offered, re-settlers are to be provided with land for which a combination of
productive potential, location advantage, and other factors are at least equivalent to the advan-
tages of the land taken. '
However decades of international experience in resettlement suggests that 'land for
land' compensation alone is seldom fully accepted by displaced people; they often demand
cash payments. As a result, most compensation schemes provide compensation in both cash
Since communities with non-
monetized economies are not
well accustomed to managing
cash, cash compensation has
many inherent risks.
'Land is like diamonds but money
is like ice'.
 
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