“Avatar” – Case Study in Involuntary Resettlement Planning?

An extractive company (mining ‘unobtainium’), a botched resettlement program and heavy-handed interventions by security forces provide the backdrop in the SciFi movie “Avatar” played out on the fictional planet of Pandora. What lessons can this movie provide about IFC Performance Standards relating to Land Acquisition & Involuntary Resettlement for extractive projects here on Earth?

Resettlement planning requirements of the IFC are always a hotly debated subject during the 20 short courses I have delivered on IFC Performance Standards and Equator Principles in Canada, China, Panama, Peru, UK and Venezuela since 2007. The term ‘involuntary resettlement’ is already confusing.  Resettlement is considered involuntary when affected individuals or communities do not have the right to refuse land acquisition that may result in physical or economic displacement. This ability to take over the land from previous land users may be enshrined in the mining concession or project sharing agreements , or be part of government obligations/contributions to a project.  The introduction of a negotiated compensation process would still trigger IFC Performance Standard 5 on Land Acquisition and Involuntary Resettlement. This means that the environmental and social impact assessment (ESIA or SEA) requires a chapter or annex typically called Resettlement Action Plan (or RAP).

Complications of RAPs often include the need to bridge the gap between local regulatory requirements and those defined under IFC Performance Standards. For example, the amount of compensation due when following the IFC Performance Standards typically exceeds the local regulatory requirements. Similarly, IFC Performance Standards do not consider the absence of a legal title to land (often the case with communal/traditional land use) a barrier to compensation eligibility.

But unlike the fictional Avitar story in Pandora, IFC compliant resettlement planning seems to create an unwelcome demand. Notwithstanding that some genuinely do not want to be resettled (regardless of benefits), others view IFC-compliant resettlement compensation as a once-in-a-lifetime ‘lottery ticket’. This results in the ‘opportunistic squatter syndrome’ and may be an important underlying cause of some complaints placed at the doorstep of IFC’s Compliance/Advisory Ombudsman office.

What is you experience with resettlement planning and related stakeholder expectations? Have you seen that process causing delays in project finance or project start-up?