Land Acquisition and Compensation in Involuntary Resettlement


The forced resettlement of populations in association with the construction of hydroelectric dams, large-scale irrigation projects, highways, mines, and urban renewal and metropolitan development has become commonplace today. The extent and the implications of such forced relocation are diverse and variable, depending on the nature of the project and density of population being affected. The size of a displaced population being affected. The size of a displaced population may vary from only a few thousand to tens of thousands of people.

The Kaptai hydroelectric project, for example, displaced close to 90,000 slash-and-burn agriculturalists in the Chittagong Hill Tracts in Bangladesh (Zaman 1982). The Aswan Dam project in Egypt resettled more than 10,000 people; the Narmada Dam project now under construction in Gujarat, India, will displace some 70,000 people; a recently completed dam project in Togo displaced 10,000 people; about 60,000 urban and rural people were displaced by the Sobradinho Dam in Brazil; 383,000 people were forced to resettle due to the inundation caused by the Danjiangkou Dam project in China; and the Shanghai Metropolitan Development Project in China and the Dhaka Water Supply and Sanitation Project in Bangladesh now underway will cause relocation of 50,000 and 20,000 people, respectively (Cernea 1988). In India alone, according to some estimates, between 1.5 and 2 million people have been displaced by various development projects since the 1950s (Fernandes et al. 1989; Mankodi 1989). Given the nature of rapid urbanization, industrialization, and agricultural modernization in many developing countries, there can be little doubt that the need for involuntary resettlement will increase in the near future.

The consequences of forced resettlement are enormous: it destroys the existing modes of production and ways of life, affects kinship and community organization and networks, causes environmental problems and impoverishment, and threatens cultural identity of tribal and ethnic minorities, often the worst sufferers of hydroelectric dam projects. In addition, forced resettlement tends to be associated with increased sociocultural and psychological stresses and higher morbidity and mortality rates. Population displacement, therefore, disrupts economic and sociocultural structures. People who are displaced undergo tremendous stress as they lose productive resources - land or otherwise - in the adjustment process. Resettling the displaced poor, remote, and economically disadvantaged is not always an easy task.

Resettlement: Some Issues

To date, social science research has largely focused on impacts of dislocation and adjustment strategies (see Hansen and Oliver-Smith 1982). Two previous issues of Cultural Survival Quarterly (Vol. 12, Nos. 3 and 4 [1988]) also centered on problems of dislocation and resettlement. This article primarily focuses on one important aspect of the resettlement process: land acquisition and compensation. What should be the contents and scope of a resettlement plan? Should the displacees be involved in the decision-making process? How do you protect the interests of vulnerable groups such as tribal people, landless and seminlandless peoples, and women groups? How do you stop the influx of nonresidents from taking advantage of compensation arrangements? Should there be a national resettlement and compensation policy?

Compensation: Cash or Kind?

Most countries have land acquisition laws that require prompt and adequate monetary compensation for persons who lose their land and property. However, cash compensation has many negative consequences, particularly for tribal and other marginal populations. Tribal economies are in large part non-monetized, based on reciprocal exchange of goods and services; therefore, people are not well accustomed to managing cash. There is a popular saying among the Havasupai Apache Indians in the United States, a people displaced repeatedly by development projects: "Land is like diamonds but money is like ice" (Mariella 1990, cited in Guggenheim 1990: 32).

Some tribal people have very little transaction experience with the outside world. For example, the cash compensation given to those affected by the Kulekhani hydroelectric project in Nepal, which displaced 3,500 tribal people, produced a greater impact on peoples' behavior, in many instances, than did loss of property:

The sudden cash in their hands gave many the false impression of wealthiness. They changed their life style. The Tamangs of Markhu, who despite their fight against the land acquisition, had lost the best part of their land, became the living example of this side effect [of cash compensation]. Gambling and drinking increased to an unprecedented level. Eight male adults developed severe tuberculosis and all but one died in a miserable condition in the following five years. One young Tamang who had received a large sum in compensation went as far as Casino Nepal in Kathmandu to gamble until he lost all his money and ended up working as a dishwasher in the city... The story of damage ones on and on... The villagers ...think that displacement has cost them a lot both materially, and spiritually. They claim that they were not compensated adequately for their loss. There were serious flaws in compensation planning in the Kulekhani... [that it has become] increasingly important that we review and improve our compensation policy. (Pokharel 1988: 9-10)

Another project in Indonesian revealed that "displaced families provided only cash compensation suffered about a 50 percent reduction in income compared to pre-project conditions, and their productive resource base was reduced by 47 percent" (Partridge 1989a:8). Studies carried out at the Srisailam and Lower Manair dam projects in India also confirm the inadequacy of cash as a mode of compensation. Exclusive cash compensation is least useful to the resettlers in the long run; instead, for land-based resettlement, a "land-for-land" approach may be more beneficial since land is the key to reestablishment and contributes to cultural security. Guggenheim (1990) considers that the land-for-land approach is essential for resettlement despite criticisms that it denies the settlers the right to choose for themselves and that cash compensation could provide opportunities for opening family businesses.

One important mechanism for implementing the land-for-land strategy is to identify several possible relocation sites to provide alternative choice to the displacees. The productive potential, quality of soil, availability of irrigation water, and locational advantages of the new relocation sites should be ideally better or at least equivalent to the lost site in order to make it attractive to the settlers. Furthermore, in selecting relocation sites, attention should be paid to the possibility of off-farm income (e.g., fishing, seasonal wage labor, gathering forest products) to supplement family income.

Partridge (1989a) notes that there are three significant issues related to monetary compensation: (1) evaluating the worth of property to determine the amount of payment; (2) the timing of the payment; and (3) determining noncash compensation where cash alone is not appropriate. In many countries, market value of the land being acquired is used as the determining factor in calculating compensation. A displaced person may find it difficult to acquire comparable land with the compensation money because of limited land market or higher value of land in the relocated area, where prices can double or even triple almost overnight. In addition, the costs for relocating, transporting, salvaging building materials, and so on can put financial strain on the resettlers. In such circumstances, cash compensation should be supplemented by providing "replacement assets" (e.g., house, land, shop) in order for the displacees to be resettled (Partridge 1989a).

Compensation payments are sometimes severely delayed - as much as 10 to 15 years in India, Bangladesh, and Nepal - which obviously devalues the compensation award. Compensation money must be made available before the actual move so that displaced households can use the money to overcome or minimize the hurdles of dislocation. Furthermore, compensation for land acquisition should not be limited to monetary payments to individuals; there should be appropriate compensation to the community of people to reestablish their new communities:

The Narmada Water Dispute Tribunal (NWDT), formed by the Supreme Court to adjudicate sharing of water of the Narmada river among four states in India, established in a land mark decision that property holders displaced due to land acquisition were entitled to cash compensation. The NWDT specified that irrigable agricultural lands, houseplots, schools, community buildings, drinking water wells, fuelwood lots, livestock wells, health clinics, threshing grounds, burial or cremation grounds, and so forth were to be provided by the government to replace those sacrificed to planned development projects. Only the cost of agricultural land is to be recouped from the cash compensation of the affected people; other components are project costs. (Partridge 1989a:8)

Finally, cash compensation disproportionately benefits some interest groups (i.e., big landlords) and not so much poor and small-scale farmers, the landless, and women. Landlords profit more from relocation because much of their land is either sharecropped or remains uncultivated, making the cash compensation more attractive to rich farmers, who then reinvest it in the nonagricultural sector. Landless laborers are often the hardest hit group in the relocation processes due to their lack of ownership and entitlement to land. In many countries such as Bangladesh, India, and Pakistan, landless people constitute 50 percent of the total rural population. In such circumstances, there is often customary recognition of "use-right," but cash compensation to landless displacees is always inadequate.

As a group, women are also affected by forced relocation; very rarely have their concerns been considered in resettlement projects. In many cultures, women are involved with land-based activities and in herding animals; they are part of the productive work force and contribute substantially to the sustenance of the family. However, compensation monies always go to men, often leading to mistrust and division in the family. Areeparampil (1989) has documented how some men, often hand in hand with corrupt officials, have fraudulently deprived indigenous people in Chotanagpur, India - particularly the weaker ones such as widows and elderly women - of their rightful compensation.

Land Tenure, Acquisition, and Resettlement

Involuntary resettlement plans must not only address the relocation and rehabilitation needs of property owners, but also the landless, wage laborers, artisans, craftspeople, and women (Partridge and Salam 1990). In other words, resettlement designs must keep the community in mind, not the individual. This means carefully considering existing land tenure systems and inheritance patterns, and local customary practices that govern use and entitlement to community property. Studies of land tenure systems and customary practices will be helpful in devising compensation rules and resettlement titles.

Furthermore, developing and designing a resettlement plan means understanding the legal framework. Many World Bank-financed projects in Asia and elsewhere dealt with the problems associated with relocation and resettlement on an ad hoc basis due to lack of national resettlement policies (see Partridge 1989b). Since the legal basis for land acquisition may vary from state to state and region to region (as in India), a national land acquisition and resettlement policy should be flexible enough as an instrument for guidelines, leaving the details to local authority for local decisions on the merits of individual projects.

Planning resettlement must begin early on in a development project. It should be based on information as accurate as possible about the scale of displacement, impacts and consequences on the life and livelihood of the people, the extent of loss of assets, and destruction of infrastructure and services. A good strategy is to undertake a complete socioeconomic survey of potentially affected families, with names of all members of the household, their age, gender, education levels, and occupational backgrounds. The survey should also include questions aimed at gauging people's attitudes, preferences, and choices on future resettlement. Such a survey is of fundamental importance to plan ahead and to prevent inflows of outsiders for future compensation award.

Due to the lack of a proper survey, for example, the number of families requiring relocation almost tripled from initial estimates in the Upper Krishna Irrigation Project in India, causing considerable delay in resettlement operations. Participation of and assistance by the local community in the survey and planning process may ensure better results. Instead of a "top-down" resettlement planning, if the people are consulted right from the beginning and feel involved in the local decision-making process, they will be more likely to see the resettlement plan as their project. Partridge and Salam (1990) conclude that people's participation in resettlement planning and implementation can be very helpful in designing realistic and sustainable economic production systems. Finally, the socioeconomic survey data can also be used to develop new training programs for alternative employment if the available land is not sufficient to accommodate all the project-affected people.

Developing Local Participation

Land acquisition and compensation are only two important issues as well. Since completely avoiding dislocation is sometimes difficult, the importance of carefully assessing the scale of disruption and preparation of a plan for resettlement can hardly be overemphasized. In India and elsewhere, nongovernmental organizations (NGOs) have been useful in mobilizing local resources and institution-building. The key to any successful resettlement program lies in defining and developing mechanisms for people's participation in planning and implementation; this will further facilitate social cohesion and the development of a sense of community among the resettlers.


1. Population dislocation and involuntary resettlement also occur as consequences of wars, civil strifes, and natural disasters such as floods, riverbank erosion, and earthquakes. Despite important differences between population displacement caused by natural disasters and resettlement caused by development, people displaced by flood and riverbank erosion in Bangladesh face problems almost similar to those affected by development projects (see Zaman 1989, 1990).


Areeparampil, M.

1989 Industries, Mines and Dispossession of Indigenous peoples: The Case of Chotanagpur. In W. Fernandes and E.G. Thukral, eds. Development, Displacement and Rehabilitation. pp. 13-38. New Delhi: Indian Social Institute.

Cernea, M.M.

1988 Involuntary Resettlement in Development Projects. World Bank Technical Paper Number 80. Washington, DC: The World Bank.

Fernandes, W. et al.

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Guggenheim, S.

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Partridge, W.L. and A. Salam

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Pokharel, J.C.

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Zaman, M.Q.

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