Working towards greater community control over land, forests and natural resources

Govt may lift ban on mining, land concessions ahead of schedule

Vientiane Times, 10 June 2014

The government may revoke a suspension and resume the approval of new investment proposals in mining or land concessions for rubber and eucalyptus plantations as part of efforts to boost growth over the next two years, although in a more limited capacity than before the ban.

The government has realised it may not be able to maintain a blanket ban on all approvals and will instead proceed more cautiously by carrying out proper strategic forecasts, an official from the Ministry of Planning and Investment has said.

Director of the Investment Promotion Department’s Legal Division Ms Thavichanh Thiengthepvongsa said during a seminar held last week at the Vientiane Times office in Vientiane that the government will promote quality investment by approving only one or two projects in each province or region. The government suspended approvals for any new investments in mining or land concessions for rubber and eucalyptus plantations in 2012 after learning that many investors had breached agreements and relevant laws.

As some projects had impacted the country’s environment and livelihoods of local people the government said it would consider any proposals on these kinds of projects until December 31 next year. The suspension has given the government time to review its policies and assess the effectiveness of existing projects to make sure Laos can maximise its benefits from the sectors. Some of the problems that were occurring were due to a lack of land surveys and proper allocation, as well as details on how many hectares of land investors were really using and whether it was the amount of land agreed upon in their original proposals.

According to the ministry, Laos has approved 4,492 land concession investment projects since 1988 across many sectors, with a total value of over US$24.8 billion. Of the total investment in the country, the mining sector ranked as the most valuable, with 299 projects worth more than US$7.1 billion. It was followed by hydroelectricity, which had 46 projects worth over US$6.6 billion; then agriculture, with 985 projects worth over US$2.7 billion; and finally by the service sector, with 664 projects worth over US$2.5 billion.

Private sector investment has contributed to the continued growth of the country’s economy and poverty reduction. For instance, average GDP growth reached between 7.5 and 8 percent from 2006-10 and has sat at 8 percent since 2011. According to a government report last year, a total of 212 rubber and eucalyptus plantation projects were approved covering an area of 574,534 hectares with a total investment value of around US$1.65 billion.

Of the 212 projects, 35 were approved by the central government and the rest by local authorities. A total of 201 were rubber plantations. The government is reviewing the performance of these projects to assess their social and environmental impact on the country and ensure that reasonable revenue has been collected. It is looking to determine whether the investment in these sectors has brought real benefits for Laos and its people.

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