Saturday

24th Jun 2017

Investigation

Dutch bank faces questions on Romania land-grab

  • Since 2002, 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. (Photo: Adam Jones)

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.

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  • Rabo Farm believes that its investments contribute to the local social and economic development. (Photo: European Commission)

Who? They wouldn’t say. Neither would they tell him how it took place.

"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."

Through subsidiary companies belonging to a €315 million investment fund for farmland in Romania and Poland called Rabo Farm, Dutch banking giant Rabobank has acquired over 21,000 hectares of farmland across Romania since 2011, as part of a fifteen year investment which is expected to give returns of up to €900 million to investors.

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 mayor

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.

The village is home to over 2,500 people, all but a handful of whom continue to eek out a living from small-hold farming, on plots of land returned to them by the state after the fall of Communism in 1989.

All across Zarand, farmers tell the same story.

They say that their land was taken from them; that without them knowing, or seeing any kind 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 officers is yet to happen.

Where cases have been prosecuted, villagers say they are yet to receive any explanation or compensation. But all are sure of one thing: the former village mayor, Ion Mot, was somehow involved.

Mot was forced to resign from his position 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 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?

In order to understand how this came about, we decided to follow the money.

Since 2012, Rabo Farm has bought over 140 hectares of land in Zarand from intermediaries. 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.

Contested ownership

Bosca’s method for obtaining ownership of the land is complex, but the following is what we could gather.

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 almost 30 hectares of land in total.

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 has no awareness the case ever took place. But a judge named Florita Bolos, who was sentenced last year to four years in jail 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, are now under investigation by state prosecutors at the nearby court of Chisineu Cris, under charges of forgery of private documents, forgery of official documents, and abuse of office.

This exact same procedure was used by another of Rabo Farm’s intermediaries; an Austrian owned company called Bardeau Holding Romania, which sold Rabo Farm over 1,200 hectares of farmland in western Romania.

Through Judge Bolos, Bardeau Holding acquired land from at least 148 villagers in Zarand, at least seven plots of which now belong to Rabo Farm. Bardeau’s dealings with Bolos over this land is now 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, on the other side of the country, a Rabo Farm subsidiary called Kamparo Investment is being sued for buying land that the owner also claims he never sold.

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 bought 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?

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 holds 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, Rabo Farm missed the fact that they were buying land in a village racked with corruption and land rights abuse, and from sellers deeply involved in murky business.

We asked Rabo Farm what their due diligence consists 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, then we will be triggered to do more, like paying the village a visit."

Rabo Farm indicated it doesn’t recognise the picture presented of Romania as a country rife with corruption.

Van den Oever said: "You can never say with 100 per cent certainty that you haven't come into contact with corruption, but we put into place all the procedures to avoid this."

In response to more practical questions - such as, how many leaseholders the bank has, who they are, and how many villages the bank has purchased farmland in - the bank claims it is not at liberty to say.

"These are closed investments, which means we cannot disclose all information. Some of our investors may choose to do that, on their own initiative, but we will not."

6,000 corruption cases

But does Rabo Farm’s response miss the bigger picture? Corruption and poverty are entrenched characteristics of rural Romania.

This year alone, the National Anti-Corruption Directorate has worked on over 6,000 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 knows about local politics, he told us, on conditions of anonymity, that: "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."

We also spoke to Andrei Macsut, a researcher at the Romanian anti-corruption watchdog Romania Curata.

He explained: "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."

Rural exodus

Rabo Farm hoped that they would prove to be an exception.

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."

Attila Szocs works for Eco Ruralis, a Romanian NGO which has been investigating this issue for years now.

In an interview, he placed Rabo’s dealings in a larger frame: "Romania is a characteristically agricultural country where farming occupies a large proportion of its population. However, land grabbing drives peoples out of the rural landscape, generating an already well-known trend in the Western countries of rural exodus. If ageing population and youth migration were already becoming an issue in the rural areas, land grabbing accelerates the problem even more."

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, small-hold 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 monopolised by multinationals selling seeds at vastly inflated prices.

Price hike

Introducing herself as Mrs Pocriser through a crack in her gate on the outskirts of Zarand, an elderly woman broke down in tears as she explained how her and her husband’s land was robbed.

"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,” she said.

In their promotional literature, Rabo Farm talks repeatedly of its role in improving the quality of the land it buys.

When we spoke to Van den Oever, the Rabo Farm managing director, he told us that “our work contributes towards food security and sustainable food production.”

He added that the fund is investing in infrastructure and necessary work to increase productivity on its farms.

But our evidence suggests that this is largely untrue, and that Rabo Farm has put little or no money towards the management or improvement of the land.

We spoke to tenants of Rabo Farm’s land, farmers from prominent agricultural associations in areas where Rabo Farm own large amounts of land, and both small hold and industrial farmers who had come into regular contact with Rabo Farm.

All said the fund invests nothing in the land whatsoever.

One tenant, who is renting nearly 1,000 hectares from a Rabo Farm subsidiary, replied: “It [the investment claim] is a lie. They just wait for the price to rise and then they will sell.”

After we put this to Van den Oever, he responded the fund has so far invested very little in improving the land, but that they “plan to invest in the land in the future.”

The fund also claims to be consolidating farmland, which it says is vital for increasing productivity and boosting Romania’s market capacity. But an analysis of satellite imagery using land registry data and Romanian satellite software shows this invariably not to be the case.

Instead, Rabo Farm appears to have bought entirely fragmented plots of land with little apparent order, often with plots of a hectare or less situated alone, far from the next plot owned by the fund.

This gives the impression that Rabo Farm bought any piece of land they could get access to, with little regard for consolidation.

When we question Van den Oever about this, he responded that, Yes, this is the case, and that the fund plans to consolidate the land in the future. If this is to happen, it will involve buying vastly more land in order to join the existing plots.

A European problem

Meanwhile, Rabo Farm is taking advantage of the European Union’s Common Agricultural Policy.

Sylvia Kay has been researching the issue of agricultural justice since 2011, with the Transnational Institute, an Amsterdam-based NGO.

Earlier this year she co-wrote a report for the European Parliament titled Extent of Farm Land Grabbing in the EU, which argued that land grabbing in Europe has serious implications for food security, employment, and welfare.

"[Rabo Farm’s activity] really paints an alarming picture of what is going on in Romania," she said. "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 categorised 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.

Perfect storm scenario

For Romania’s 4 million smallholders, this means they are sitting on a hugely valuable resource.

Since 2002, 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.

"Romania is an example of a 'perfect storm' scenario," says Attila Szocs from Eco Ruralis, an NGO based in Cluj, Romania.

"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 over the rural society."

Luke Dale-Harris is a freelance journalist based in Bristol, UK and before that in Transylvania, Romania. Sorin Semeniuc is an award winning journalist and founder of the investigative news website ziardebuzunar.ro. They carried out the investigation with De Correspondent in the Netherlands and the Romanian Centre for Investigative Journalism. Their project was funded by the Journalismfund.eu. and the Robert Bosch Stiftung

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