Risk calculation and blood sugar – Can CSR arguments get a handle on the global land-rush?

by Rhodri C. Williams

The nearly 18 months that have passed since David Pred wrote in this blog about industrial sugarcane production and land-grabbing in Cambodia have been dramatic ones in the area of corporate social responsibility (CSR).

Perhaps most notably, the tragic and entirely predictable collapse of the Rana Plaza garment factory in Dhaka, Bangladesh last May galvanized a process of negotiating binding arbitration agreements between corporations and labor unions with participation by the International Labor Organization (ILO). The resulting “Accord on Fire and Building Safety in Bangladesh” was described by Peter Spiro in Opinio Juris as “a signal episode in the continuing evolution of global corporate regulation”:

The template: a legal agreement between non-state parties facilitated and nominally hosted by an international organization. No governments involved, at least not as parties to the agreement. If it works, look for more of the same in other contexts. The ILO ‘s profile will surely rise in the face of this episode and the growing global awareness of worker rights issues.

For better and for worse, the Rana Plaza disaster also generated competing models, with a group of North American retailers unveiling a non-legally binding alternative to the mainly European ‘Accord’ in July. While critics alleged that the latter plan amounted to an attempt by large corporations such as Walmart to co-opt the global CSR movement, US corporations condemned the Accord as rigid, insensitive to the realities of the global textiles market, and (perhaps most tellingly), a potential floodgate for litigation.

These developments indicate that the protracted debate over effective social regulation of global markets (beautifully summarised in this essay by Richard M. Locke) has lurched forward, but is far from over. While experts have raised technical concerns about the arbitration procedures espoused in the Accord, it has nevertheless clearly introduced a new paradigm, planting a new, binding standard in a field dominated by voluntary codes of conduct. However, the competing North American initiative demonstrates the persistence of non-binding commitments that rely on states to regulate the conditions of production, rather than giving workers recourse to the corporations that sit astride global production chains.

Meanwhile, the debate over large-scale acquisition of land in developing countries by foreign states and corporations – the ‘global land rush’ – has rumbled on. In particular light of the extent to which corporations have been actors in the land rush, early indications that the land tenure governance debate would converge with the broader CSR debate appear to have been more than borne out.

Most notably, the UN Food and Agriculture Organization (FAO) recently adopted a well-received set of “Voluntary Guidelines on the Responsible Governance of Tenure“. Though these are frequently referred to generically as ‘land grab guidelines’, they actually focus on the ‘supply side’, setting out duties of care for the authorities that dispose over land subject to investment (for more on the Guidelines, see this dedicated edition of the Land Tenure Journal). Meanwhile, a corresponding set of ‘demand side’ due diligence guidelines for investors – the “Principles for Responsible Agricultural Investments” is currently slated for adoption in 2014.

A similar pattern has emerged in advocacy with, for instance, the Rights and Resource Initiative (RRI) recently having reframed the ‘supply side’ question of State neglect of local tenure rights as a ‘demand side’ problem of corporate risk:

In examining the evidence, a pattern emerges. Many investors and operators have committed time, money and effort without understanding some considerable risks, ones usually considered externalities in the normal course of business. …. Property rights in many emerging markets are dysfunctional to the point that ownership of land can be granted to an investor without the tens of thousands of people living on, or dependent on, that land knowing about it. …. By themselves, delays caused by land tenure problems can inflate a project’s expenditures by an order of magnitude – and in some cases these losses have even been great enough to endanger the future of the corporate parent itself.

Meanwhile, more concerted efforts are being put into gauging the genuine scale of the problem, most notably through the development of a Land Matrix, a public online database of land deals. However, getting a handle on the scale of the problem, with its often murky and frequently unreported (or reported but unconsumnated) deals remains difficult. Nevertheless, two recent and overlapping insights have involved the extent to which the land rush has penetrated – and destabilized – South-East Asia and the role of the sugar industry and sugarcane in driving large scale land investment.

Last April, writing for the Fletcher School blog, Michael Kugelman referred to South-east Asia as “the Global Land Rush’s overlooked ground zero”. Kugelman noted that the region has many of the same advantages in terms of arable land and water as other, better known land-rush target areas such as Africa, along with some extraordinarily accommodating governments. The following August, the Diplomat blog published a series of articles on “the Great Southeast Asian Land Grab” that noted a set of common issues in the region that fuelled the problem:

an inadequate legal framework within each country dealing with land ownership and occupancy, the dilemma between customary land occupancy and formal land ownership, and market forces driving policies in support of large agribusiness and other major development projects on these lands.

For me personally, this insight came as something less than a surprise. My own consciousness of a global land rush as such came about when I was interviewed by Adrian Levy and Cathy Scott-Clark for a 2008 Guardian piece (memorably titled “Country for Sale“) about land-grabbing in Cambodia. Until then, my work with COHRE in Cambodia had predisposed me to focus mainly on ‘supply side’ issues and the human rights of victims of forced evictions. It had not occurred to me to consider how the global economic crisis and rising food prices was triggering a new and fateful spike in demand.

Within Southeast Asia, Cambodia has remained the country most profoundly affected by the global land rush. Having taken an early foray into wanton concession of occupied land in the 1990s, Cambodia may now top the global charts with as much as 55% of its arable land leased or sold to foreign investors in as many as 104 major deals. A recent timelapse image of spreading land concessions by the Cambodian human rights NGO Licadho tells the whole story.

Another issue that has recently come to the fore, both in Southeast Asia and beyond has been the role played by sugarcane cultivation in fuelling the land grab. In an October 2013 report, Oxfam noted that the crop already took up more grabbed land than the better known problem of oil palms even as demand – particularly from the ‘Big 10’ global food producers – was set to increase. As covered previously in TN, the issue of land-grabbing for sugar plantations arose early in Cambodia and led to a sustained campaign against both the implicated sugar manufacturers and an EU decision to grant them preferential tariffs.

However, sugar cane is a problem in many other parts of the world as well, as demonstrated by this Guardian story on the crop’s progress in Guatemala, another small country in which economic predation has followed quickly in the wake of post-conflict fragility:

Some progress on land reform was made after the end of Guatemala’s civil war in 1996, when peace deals included an agreement to promote the democratisation of land structures and reverse the concentration of land. But an estimated 46% of smallholders who were granted land titles after the peace accords no longer hold them, according to (Oxfam’s Laura) Hurtado.

“It’s terrible to see that, 15 years after the peace accords, the little that was won has been lost,” she says. Many farmers are selling their land because of unpayable debt or crops failure – and sugar and palm companies are snapping up the bargains. Often, farmers are coerced into selling when they see their access to roads or water cut off by encroaching plantations. Others are threatened outright.

Palm and cane plantations are expanding in areas where lands have been newly titled. “The fact that newly titled farmers go into debt to plant their crops makes the lands more vulnerable to be appropriated,” says Hurtado, who points out that maps of newly titled land and palm and sugar plantations overlap at many points.

In this dreary context, it is encouraging to note that recourse to even non-binding CSR approaches may not be entirely ineffective. Land-related cases in the past have often involved corporations predisposed to be sympathetic, such as the Body Shop in relation to Colombian palm oil suppliers. However, last week reports emerged that the Oxfam clean sugar campaign had caught the conscience of Coca Cola, one of its targeted ‘Big 10’ food producers. According to Oxfam, the Coca-Cola Company declared “zero tolerance” for land grabs in its supply chain, announced “sweeping social and environmental assessments across its supply chains” and promised to publicly reveal its biggest sugarcane suppliers.

Not at all bad for a campaign that relied on good old fashioned petition drives and public advocacy. Coca-Cola’s decision also undoubtedly ups the ante for the other global food producers on Oxfam’s list. However, as noted in Oxfam’s press release, the hardest test may relate to the damage already done in past land-grabbing cases, and the issue of whether Coca-Cola will take concrete steps to support an “appropriate resolution for the communities in Brazil and Cambodia who continue to struggle to regain the rights to their land.”

As if to underscore this point, the NGOs Inclusive Development International (IDI) and Equitable Cambodia launched a new report on the devastating human rights impact of ongoing sugarcane production in Cambodia on precisely the same day the Coca-Cola agreement was announced.

One response to “Risk calculation and blood sugar – Can CSR arguments get a handle on the global land-rush?

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