Can a private company take your land, or only the government?
Companies negotiate; states compel. Where a company can call on the state's power, the negotiation is not what it appears to be.
A private company normally has to buy your land by agreement. Only the state can compel a sale, and only for a public purpose set out in law. The complication is that some projects sit between the two: a private developer whose scheme has been designated as serving a public purpose can have the state acquire land on its behalf, and then the negotiation is not really a negotiation.
Three situations, with different rules
- A genuine market purchase. A company approaches you, you can say no, and the price is whatever you agree. Ordinary contract law applies.
- Acquisition by the state for a private project. Where a statute permits it — commonly for power, mining or designated investments — the state exercises compulsory powers and the developer pays. Compulsory acquisition protections apply in full.
- Negotiation in the shadow of compulsion. The developer negotiates, but everyone understands the state could step in if you refuse. Formally voluntary; substantively not.[2]
Why the third case matters
Projects often treat negotiated purchases as ordinary transactions outside the resettlement framework — no census, no entitlement matrix, no grievance mechanism, no assistance for people without title who use the land.
Under lender standards that is not correct. Where the seller could not realistically refuse, the acquisition is treated as involuntary and the full requirements apply: replacement cost, assistance to those with no legal claim, consultation, and a grievance route.[1] The practical test is simple — could you have said no without consequence?
What to ask a company that approaches you
- Who is financing this project, and under what standards?
- Is the state acquiring the land, or are you buying it from me?
- What happens if I decline?
- Has a census been done, and are the people who use this land — tenants, herders, my sharecropper — being recorded too?
- Is the offer based on replacement cost, and can I see the breakdown?
The financing question is worth asking first. If a development bank or a commercial bank applying the Equator Principles is involved, obligations arrive with the money and are enforceable through the loan documents.[4]
Leases rather than purchases
Renewable energy projects in particular often lease rather than buy, which is presented as the gentler option and changes three things worth checking: whether the payment obligation survives the project changing hands, whether the rent is indexed over a term measured in decades, and whether the person signing is the person actually farming the land.[3]
Sources
- [1]Performance Standard 5: Land Acquisition and Involuntary Resettlement — International Finance Corporation, 2012.
- [2]Guidance Note 5: Land Acquisition and Involuntary Resettlement — International Finance Corporation, 2012.
- [3]ESF Guidance Note 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement — World Bank, 2018.
- [4]The Equator Principles (EP4) — Equator Principles Association, 2020.
Olule Solomon
Lead Consultant, ValueSpace
Olule Solomon is Lead Consultant at ValueSpace, where he works on land acquisition and resettlement systems for donor-financed infrastructure in East Africa. He writes about the practical gap between what the safeguard standards require and what a project can actually evidence at completion audit.
Related reading
- Can the government take your land without paying you?It can take it. Taking it without compensation is a different question, and the answer under both national law and lender standards is no.
- Land acquisition for solar and wind: a different displacement problemRenewables take large areas with few structures, often by lease rather than purchase. Why that changes the whole instrument.
- What rights do you have when a project takes your land?Eight of them, most of which projects will not volunteer. Knowing they exist is what makes them usable.
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