Award 2016 Nominee
Land Grabbing in the EU: How Rabobank is Profiting of Theft and Abuse in Romania
- Luke Dale-Harris
More than a year ago, I stumbled upon a mystery: Romanian farmers discovered their land had been sold without their knowledge or consent. Investigative journalist Sorin Semeniuc and I followed the money trail all the way to Rabobank, the Dutch banking giant that turns out to have invested millions in agricultural land in the country. How did Rabobank come to own stolen farmland?
– Luke Dale-Harris
Mircea Necrilescu has a story to tell, but he won’t talk at his house, at his local bar or anywhere else in Zarand, the Romanian village where he has lived all his life. Instead, he gets in his car and drives, and only when the village is minute in his wing mirrors does he begin to speak.
He tells how his land was stolen; how one day earlier this year, when filing paperwork to the county council, he was told simply that a chunk of his farmland was no longer his; that it had been sold to some foreigners. Who, they wouldn’t say. Neither would they tell him how it had it happened.
“This has happened to lots of people in this village,” Necrilescu says. “I don’t know exactly [what happened], but I have heard they drew up forged documents and had help from the town hall. It is our land, handed down to us by our parents, and it is not right that someone else can just become the owner of it.”
Part of Necrilescu’s land now belongs to Rabo Farm, a €315 million land investment fund owned by the Dutch banking giant Rabobank. Rabo Farm have bought up over 140 hectares of farmland in Zarand since 2012, and tens of thousands more in 50 villages across Romania. The village is home to over 2500 people, all but a handful of whom continue to eke out a living from small- hold farming, on plots of land returned to them by the state after the fall of communism in 1989.
At first glance, Zarand looks much like every other Romanian village where Rabo Farm has planted its flag. Stretched wide across the flat and fertile plains of western Romania, small houses of rammed earth and bare breeze blocks sit alongside unpaved roads. From behind each house comes the restless noise of pigs and chickens, and from further away still the swishing of farmers cutting crops by hand.
All across Zarand, farmers tell the same story. They say that their land was taken from them. Without their knowledge or consent, and without any form of payment, land registered in their name was sold by someone else, often to foreign-owned companies.
Most are unaware of what exactly happened to their land, as a full investigation by law enforcement is yet to happen. Where cases have been prosecuted, villagers say they are yet to receive any explanation or compensation.
Rabo Farm planned to invest €615 million. The initial phase totaled €315 million, and a subsequent phase has now been put on hold indefinitely, as the institution reconsiders its strategic position “for a number of reasons”. Infographic by Momkai But all are sure of one thing: the former village mayor, Ion Mot, was somehow involved. Mot was forced to resign as mayor in September this year, two years after being convicted by Romania’s top law enforcement body, the National Agency for Anti-Corruption (DNA), for his role in a scam to forge documents and steal hundreds of hectares of land. According to the DNA, Mot had taken 40,000 euros in bribes in exchange for passing on villagers’ land ownership documents to crooked businessmen, who then used them to forge ‘pre- contracts’ in order to transfer the land into their own names.
How do you sell your land without knowing it?
Since 2013, Rabo Farm has bought over 140 hectares of land in Zarand. Of this total, at least 16.5 hectares were acquired by intermediaries through a complex procedure involving a judge who was recently convicted for fraud, and pre-contracts which are now under investigation by state prosecutors and anti-corruption officers.
Mircea Necrilescu’s land is one of dozens of plots in Zarand sold to Rabo Farm in 2013. According to land registry and court records, Necrilescu sold land in 2010 to a woman called Elena Bosca. Three years later, Rabo Farm bought Necrilescu’s land from Bosca, along with land she acquired from at least 14 other villagers in Zarand.
Necrilescu is adamant that he was never informed and that his land was sold without him or any of his family members knowing about it or receiving any money. To understand how this could happen, we have to take a look at Bosca’s methods.
In 2010, Bosca took Necrilescu and 12 other villagers to court in the town of Ineu, claiming that they had reneged on a deal to sell her land. She presented preliminary contracts, stating that the villagers had agreed to sell her a total of nearly 30 hectares of land.
The hearing was over quickly. Neither Necrilescu nor any of the other defendants appeared at the hearing or gave any form of defence, and Necrilescu claims he didn’t even know the hearing was taking place. But a judge named Florita Bolos, who was sentenced last year to four years in prison for forgery and taking bribes, ruled in Bosca’s favour, granting her official ownership of the land and allowing her to sell it on to Rabo Farm.
This court case, and the ownership documents provided by Bosca, is now under investigation by state prosecutors at the nearby court of Chisineu Cris on charges of forgery of private documents, forgery of official documents and abuse of office.
Different part of the country, same story
The exact same procedure was used by another of Rabo Farm’s intermediaries: An Austrian company called Bardeau Holding Romania have sold Rabo Farm hundreds of hectares of farmland across western Romania. Through Judge Bolos, Bardeau Holding acquired land from at least 148 villagers in Zarand. At least seven of these plots now belong to Rabo Farm. Bardeau’s dealings with Bolos over this land are currently under investigation by Romania’s top law enforcement agency, the National Agency for Anti- Corruption.
An analysis of court records involving Rabo Farm’s subsidiaries in Romania suggest that a pattern of buying land with contested ownership extends far beyond Zarand. In Dolj county for instance, on the other side of the country, a Rabo Farm subsidiary called Kamparo Investment is being sued for buying land that the owner claims he never sold.
And in another case from a court near the Bulgarian border, Kamparo Investment settled out of court after the company was sued by five landowners whose farmland they had purchased through intermediaries. The landowners argued that their land had been illegally taken, after new and illegitimate ownership papers were issued by an office in the local council. Kamparo agreed to give them their land back.
Does Rabo Farm know who they have been dealing with?
In a report published by the fund in 2013, Rabo Farm stated: “Before we acquire or invest in a farm, we conduct an intensive due diligence analysis on sellers, leaseholders, farm operators, farms and many other factors relevant to the investment phase.”
When we asked Rabo Farm what they knew about Elena Bosca, the fund responded: “We performed a Due Diligence on the seller by an external party on all public sources. This includes all info in the public domain. The outcome was positive – the person was not involved in any criminal file or public scandals.”
The fund said that the same held for Bardeau Holdings: “Based on this Due Diligence, it appears that Bardeau as a company and its management are not involved in any criminal files related to the land acquisition procedures or other economic crimes.”
Despite their due diligence work, Rabo Farm missed the fact that they were buying land in a village racked with corruption and land rights abuse, and from sellers involved in murky business.
We asked Rabo Farm what their due diligence consisted of. Dick van den Oever, Managing Director of the fund, replied, “Our regular due diligence consists of collecting all kinds of documents that help us establish an image of who the seller is. If we come across something striking, than we will be triggered to do more, like paying the village a visit.”
Rabo Farm indicate they do not recognize the picture presented of Romania as a country rife with corruption. Van den Oever explains, “You can never say with 100% certainty that you haven’t come into contact with corruption, but we put into place all the procedures to avoid this.”
How can it be that such fundamental issues go unnoticed? Perhaps this is due in part to the nature of corruption itself. After all, how can you trust official institutions and documents if you don’t know who is corrupt and who isn’t?
Is it even possible to run a ‘clean’ investment business in Romania?
Corruption and poverty are entrenched characteristics of rural Romania. This year alone, the National Anti-Corruption Directorate have worked on over 6000 different corruption cases, the majority of them in remote towns and villages. All across the country villagers talk of how a few central figures – invariably revolving around the village mayor – have commanded control of local money flows, resources and employment opportunities.
When we asked a local farmer in Zarand who could tell us about local politics, he told us, on condition of anonymity, “The mayor controls this village, and everyone is either working for him or lives in fear of him. You will not find anyone to speak to you as people are either scared, or on his side.”
Andrei Macsut, a researcher at the Romanian anti-corruption watchdog Romania Curata, explained further, “Our institutions are sick with corruption – it contaminates everything in Romania. When investors bring in large amounts of money, they end up supporting corruption by necessity as it is often the only way to get things done.”
Rabo Farm hoped that they would prove to be an exception, but to no avail. In their report they wrote: “Rabo Farm is active in rural regions where the economic and social situation is usually below the country’s average. Rabo Farm believes that its investments contribute to the local social and economic developments of the communities where it takes place and that it has a role in supporting these developments.”
Clearly, things haven’t worked out that way.
But what are the consequences of Rabo Farm’s dealings?
We spoke to Attila Szocs of the Romanian NGO Eco Ruralis, which has been investigating this issue for years now. Szocs places Rabo’s dealings in a larger frame, by explaining that Romania is traditionally a farming country. “Land grabbing drives peoples out of the rural landscape, generating an already well-known trend in the Western countries of rural exodus. An aging population and youth migration were already becoming an issue in the rural areas, and land grabbing exacerbates the problem.”
In Zarand, the illegal land grabs that have left much of the village without farmland are the final nail in the coffin of an already ailing farming community. In the two and a half decades since communism ended, the smallholder economy has been eroded from all sides, first as foreign-owned supermarkets drove down the value of agricultural produce, and then as the seed market was monopolized by multinationals selling seeds at vastly inflated prices.
Through a crack in her gate on the outskirts of Zarand, an elderly woman introducing herself as Mrs Pocriser broke down in tears as she explained how she and her husband were robbed of their land. “It was only a small plot – a few hectares. But we used it to feed ourselves and to sell a little bit. Now it is gone; we don’t have anything left.”
What can be done to stop this? What role can the European Union play?
How Rabo Farm is taking advantage of the EU’s Common Agricultural Policy
Sylvia Kay of the Transnational Institute has been researching the issue of agricultural justice since 2011. Earlier this year she co-wrote a report for the European Parliament which argued that land grabbing in Europe has serious implications for food security, employment and welfare.
“[Rabo Farm’s activities] really paint an alarming picture of what is going on in Romania,” she says. “The European Commission currently leaves the entire issue up to member states and the sustainability policies of private investors. It is clear that is not enough.”
The idea that land grabbing could be a European problem is new. The term has long been associated with the global south and the huge, often state- assisted takeovers of agricultural land and forest by western companies. But in Europe, the concentration of land into fewer and fewer hands has become part of our political narrative, more often categorized under ‘rural development’ than economic crime. Each year, the European Commission provides billions of euros to companies buying up huge tracts of land in Eastern Europe, on the premise that they are assisting in land concentration and driving up land prices.
For Romania’s four million smallholders, this means they are sitting on a hugely valuable resource. Since 2012, the price of land in Romania has seen a 25-fold increase, and Rabo Farm believe it will continue to grow – albeit at a slightly slower rate. Often with little in the way of market savvy, smallholders have found themselves in the middle of a world of hungry investors, and they are the only thing standing in the way of them making an awful lot of money.
Szocs sums up why Romania is a ‘perfect storm’ scenario for large-scale land grabbing. “In its transitional economy, where access and control over strategic resources floated from a communist regime towards local oligarchs and then to corporate businesses, weak national land governance coupled with institutional corruption or passivity paved the way for large land grabs with far- reaching effects for rural society.”
The question remains: why so secretive?
Van den Oever often indicates he is not at liberty to answer our questions. Who does the land bought by the fund belong to? Who does the land belong to if they then lease it out? These are questions the bank fails to fully answer. “These are closed investments, which means we cannot disclose all information. Some of our investors may choose to do so, on their own initiative, but we will not.”
In response to more practical questions as well – such as how many leaseholders the bank has, who they are, and how many villages the bank has purchased farmland in – the bank is not at liberty to say.
To determine how widespread this phenomenon is and how far-reaching its effects, further research is required. And ultimately, greater transparency and oversight is needed, according to Sylvia Kay. She explains, “The European Commission tends to look at this issue through the lens of one of its principal values, the free flow of capital between nation-states. They trust in nation- states and Corporate Social Responsibility. Stories like these show that this is not enough. More European oversight is needed, to ensure people remain in control of what happens to their land.”