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Deal #1757

Location #1

Spatial accuracy level
Administrative region
Location
Lanya, South Sudan

Target country
South Sudan
Comment on location
Block1 at Mukaya Payam- Lanya County

Land area

Intended size (in ha)
1000000
Size under contract (leased or purchased area, in ha)
[2008] 600000
Comment on land area
Grain states size is 345000ha.

Intention of investment

Intention of investment
Agriculture unspecified, Timber plantation (for wood and fibre), For carbon sequestration/REDD
Comment on intention of investment
The kind of business that they say they want to do is not clear. They talk of agriculture as one of their activities, and also about minerals and agrofuels. There are some hints that suggest that development plans are focused on the agrofuel sector but without limitation of expansion into other sectors. Contract mentions agro-forestry (harvesting timber and selling carbon credits) and agriculture (jatropha and palm oil trees). There were already negotiations between the government and Kinyeti Mining (a project partner) to authorize oil, gas and mining activities. (According to the transitional constitution, all subterranean natural resources in South Sudan are deemed to be the property of the central government. Douglas and Franklin would therefore need to secure a concession agreement from the GoSS Ministry of Energy and Mining to authorize their oil, gas and mining activities, despite the language in the March 2008 lease agreement purporting to transfer these rights to Nile Trading) Resettlements on such a scale are impractical. Even if the company was to invest in a manner that does not require resettlements, it would still affect patterns of land access and use for tens of thousands of people. The apparent shortcomings in the company's investment plans suggest that some element of land speculation may be involved. Indeed, despite having leased their landholdings in 2008, Nile Trading has yet to establish any visible presence on the ground.

Nature of the deal

Nature of the deal
Lease
Comment on nature of the deal
The deal was negotiated between Nile Trading and Development Inc. (NTD) and Mukaya Payam Cooperative, the “lessor”. At the time of the signature, the government had not yet recognized the deal and it was little more than an agreement between two entities, neither of which owned the land in question. In October 2008, the state-level Ministry of Physical Infrastructure issued a lease for 600,000 ha of land to the Cooperative, effectively formalizing the March 2008 transfer between the Cooperative and Nile Trading. The invoice attached to the October 2008 lease indicates that the Cooperative paid just 75,000 Sudanese pounds (approximately USD 25,000) in fees for the lease.

Negotiation status

Negotiation status
[2008] Concluded (Oral Agreement)
Comment on negotiation status
In 2008, Nile Trading and Development closed a 600,000 hectare lease agreement, for 49 years, in South Sudan. Initially, the agreement involved forestry, agriculture and mining, with an apparent focus on jatropha. However, Nile has abandoned the plans for a biofuels project, as it became apparent that food production was a greater priority. The agreement is not a binding contract, it is rather a memorandum of understanding – consultations and negotiations have yet to start. Land ownership is still with the local communities. Currently, Kinyeti Development is the temporary executive agent for the lease agreement and is evaluating options for the commercial development of the land lease

Implementation status

Implementation status
[2011] Project not started
Comment on implementation status
NTD has not activated its lease, nor has it applied to the Government of South Sudan for any licence – a prerequisite for NTD to become operational. Grain states project failed.

Purchase price

Comment on purchase price
75,000 Sudanese Pounds (equivalent to approximately USD 25,000)

Contract farming

Contract farming
No

Contract #1

Contract date
2008-09-01
Duration of the agreement (in years)
49

Number of domestic jobs created

Jobs created (domestic)
Yes
Comment on jobs created (domestic)
The company will provide training and apprenticeships.

Operating company

Comment on investment chain
Kinyeti Development is the temporary executive agent for the lease agreement. Proportion of the % of investment which the cooperative owns will decrease over the term of the lease.

 

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Data source #1

Data source type
Research Paper / Policy Report
File
Date
2011-01-01
Comment on data source
“The New Frontier: A baseline survey of large scale investment in Southern Sudan” by David K. Deng

Data source #2

Data source type
Research Paper / Policy Report
File
Date
2011-01-01
Comment on data source
Oakland Institute- Understanding land investment deals in Africa. Country report: South Sudan

Data source #3

Data source type
Research Paper / Policy Report
File
Comment on data source
Oakland Institute: Brief Nile trading

Data source #4

Data source type
Research Paper / Policy Report
File
Date
2013-07-01
Comment on data source
Land grabs for biofuels driven by EU biofuels policies. Ecofys 2013

Data source #5

Data source type
Research Paper / Policy Report
File
Comment on data source
Grain report- Land grabbing for biofuels must stop

Data source #6

Data source type
Research Paper / Policy Report
File
Comment on data source
Land and Power- The growing scandal surrounding the new wave of investments in Land. Oxfam.

Data source #7

Data source type
Crowdsourcing
Date
2014-07-07

Data source #8

Data source type
Contract
File
Date
2008-09-01

Data source #9

Data source type
Research Paper / Policy Report
File
Date
2018-06-06
Comment on data source
Grain- Failed farmland deals: a growing legacy of disaster and pain

Consultation of local community

Community consultation
Not consulted
Comment on consultation of local community
The deal was negotiated between Nile Trading and Development Inc. (NTD) and Mukaya Payam Cooperative, the “lessor,” a “fictitious cooperative”: Influential natives leased out the land behind the backs of the entire community. When OI researchers visited Mukaya Payam in June 2011, none of the community leaders had even heard of the Cooperative. The paramount chief who signed on behalf of the Cooperative in the March 2008 claims that several “intellectuals” from the community who reside in Juba brought him a lease agreement that had already been signed by all the other parties to the agreement and instructed him to sign. The chief, an elderly man with primary level education, says that he signed the lease without understanding the terms of the agreement.

Displacement of people

Comment on displacement of people
Large population in targeted area. No info whether relocation required.

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)
According to the residents of Mukaya Payam, no compensation was given to the community.

Promised benefits for local communities

Promised benefits for local communities
Financial Support
Comment on promised benefits for local communities
The company says it will give the local community a portion of the profits from the investment, increasing from 40 to 50 percent of net profits over the life of the lease. How or whether the Cooperative will distribute the rents among the payams and community members is unknown. From the contract -"Nile Trading & Development is to use its commercially reasonable best efforts to enhance the lifestyles of the communities within or adjacent to the leased land in which it conducts its activities."

Former land owner (not by constitution)

Former land owner
Community
Comment on former land owner
Land formally handed over to the cooperative.

Former land use

Former land use
Forestry

Former land cover

Former land cover
Forest land
Comment on former land cover
Nile Trading & Development agrees that the substantial majority of the land within the leased land from which trees are harvested is to be subject to a reforestation or agricultural cultivation program.

Detailed crop, animal and mineral information

Crops area
Jatropha, Oil Palm, Teak

Use of produce

Has domestic use
Yes
Has export
Yes

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
BIO (Biofuel production);AGF (Agrofuel production)

Overall comment

Overall comment
The agreement includes the Right to explore, develop, mine, produce and/or exploit petroleum, natural gas, and other hydrocarbon resources for both local and export markets, as well as other minerals, and may also engage in power generation activities on the leased land.

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Feb. 15, 2013, 5:02 p.m.

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