Does a RAP cover businesses, or only homes and farms?
Businesses are covered, employees are covered, and both are the categories most often left out of the entitlement matrix.
Yes. Businesses are covered, whether registered or informal, and so are their employees. Losing income because a project takes your premises or your pitch is economic displacement, and it is within scope of the standards whether or not you own the building and whether or not you move house.[1]
What a displaced business is owed
- The premises, at replacement cost if you own them, or the value of your leasehold interest and fit-out if you rent.
- Moving and re-establishment costs — dismantling, transport, reinstallation, any licence or fee at the new location.
- Lost income for a realistic re-establishment period, based on what the business actually earns.
- Permanent loss where the business cannot be re-established at all — assessed as the value of the business rather than the cost of moving it.[2]
- Stock that cannot be moved, particularly perishables.
Employees are affected persons too
When a business is displaced, the people who worked in it lose their jobs. The standards treat them as displaced in their own right rather than as a matter between them and their employer, so they should be enumerated individually — name, role, length of service, wage — and given transitional support and access to the livelihood programme.[3]
Very few entitlement matrices carry the row, which is why it is worth asking about directly if you are an employee of an affected business.
Informal traders
A kiosk, stall or workshop with no registration and no accounts is still a business. The difficulty is proving income, and the answer is a survey designed for it: typical daily takings on a good day and a bad day, days traded, seasonal variation, purchase cost of goods, and rent or fees paid — cross-checked against observable stock and against other traders in the same place.
Where projects substitute a flat disturbance allowance for that assessment, they systematically under-compensate the most exposed businesses, because for a roadside trader the asset is the location rather than the structure.[4]
What relocation is worth more than money
For traders, an alternative site on the same traffic is usually worth more than any payment — a designated market area, allocated stalls at the reconstructed frontage, or temporary trading space during the works.
Two things determine whether it works: whether the new site is within sight of the trade that supported the old one, and whether allocation actually reaches the displaced traders rather than being captured by whoever manages the new facility. Both are worth raising during consultation, in writing.
The impact with no entitlement
If your business is not displaced but is cut off by the works for a year — a trench across your frontage, access blocked, dust — you may fall outside the matrix entirely. This is foreseeable and can be provided for: ask whether the plan has a row for severe temporary business disruption, and if not, raise it before construction rather than after.
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]Handbook Module 5: Livelihood Restoration and Improvement — International Finance Corporation, 2023.
- [4]Good Practice Handbook: Land Acquisition and Involuntary Resettlement — International Finance Corporation, 2023.
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
- Compensating registered businesses: accounts, goodwill and relocationA formal business brings records, employees and a lease. That makes assessment easier and the negotiation considerably harder.
- Economic displacement of informal traders, kiosks and roadside businessesLosing a stall is losing a location, not a structure. Why disturbance allowances under-compensate the most exposed businesses.
- What is a project-affected person (PAP)?Anyone who loses land, assets, income or access because of a project — whether or not they own anything, and whether or not they move.
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