Tag Archives: CSR

Petition against watering down of World Bank safeguard policies

Having obtained and analysed a draft of proposed new World Bank social and economic policies, my colleagues at Inclusive Development International (full disclosure – I am on the IDI Advisory Board) have circulated a petition demanding that the Bank follow its own first principles in this matter – in that the draft submitted for upcoming consultations should provide for conditions “no worse off” than those that prevailed under the old policy.

There are alarming indications that the current draft standard fails to meet even this minimum threshold. The full text of the petition setting out these concerns can be downloaded here, and I have reprinted IDI’s summary version below. Concerned individuals and organizations are welcome to join the petition anytime before Monday at 12 pm (EST) by sending an email to IDI Managing Director David Pred (david@inclusivedevelopment.net).

–//–

Dear Friends,

As many of you will have already heard (depending on which lists you’re on), the World Bank has presented to its Board an appalling draft of its new social and environmental safeguards policies.  The Board Committee on Development Effectiveness (CODE) will be meeting on July 30th to decide whether the draft is “fit for purpose” and should be opened up for public consultations.

A leaked version of the draft Social and Environmental Framework that we have reviewed effectively turns back the clock 30 years to the days before people and the environment were protected from harm by binding Bank policies.  At the same time, the Bank is proposing to significantly scale up its lending and get back in the business of high-risk mega-projects.  All this while slashing its operational budget and the resources available for project due diligence, monitoring and supervision.  Remember the Chixoy dam in Guatemala? The Sobradinho dam in Brazil?  Narmada in India?  We’ll be seeing plenty more of these human rights disasters if the Bank moves forward with this draft.

For those of us concerned about the global land grabbing crisis, this draft opens the floodgates to more massive land grabs, forced evictions, and dispossession of poor communities –  financed with our public purse.

Some of the most alarming proposed changes include:

  • An ‘opt out’ option for governments that decide they don’t want to apply the Indigenous People’s policy.
  • Major dilutions of the Bank’s current standards on “involuntary resettlement,” including the requirement for borrowers to submit and the Bank to review and approve – prior to project approval – a comprehensive resettlement plan that ensures affected people are not harmed and have an opportunity to share in the benefits of the project.
  • Exclusion of land titling projects from the coverage of the resettlement policy, leaving people like Cambodia’s Boeung Kak Lake community whose homes were demolished after they were determined not to have ownership rights by a Bank titling project completely unprotected from forced eviction. 
  • Totally inadequate protections against land-grabbing, despite an alarming reference indicating that Bank projects could involve large-scale transfers of land for agricultural investment. 
  • The elimination of essential appraisal and supervision requirements, which made the Bank itself accountable for non-compliance with the policies.

The World Bank released a statement last year pledging that its new safeguards would be informed by the Voluntary Guidelines on the Responsible Governance of Tenure and that “additional efforts must be made to build capacity and safeguards related to land rights.”  This commitment, which we welcomed at the time, has translated into one vague line in the draft framework about assessing risks or impacts associated with land tenure, which fails to articulate any policy objectives related to access to land or security of tenure, while many of the protections in the current Bank policies have been eviscerated as outlined above.

We have drafted the attached statement on land rights to send to CODE by Monday morning with the message that this draft is a non-starter for consultation and must be sent back for major revisions.   It has been endorsed so far by Asian Indigenous People’s Pact, Forest Peoples Program, Ulu Foundation, Urgewald (Germany), Friends of the Earth (US), Indigenous Peoples Links, Jamaa Resource Initiative (Kenya), Institute for Policy Studies, Center on International and Environmental Law, Lumière Synergie pour le Développement (Senegal) and Inclusive Development International. 

Will you add your voice to the global outcry?  Please consider signing on as an organization or an individual and sharing this with anyone else you think would want to join. 

In solidarity,

David and Natalie 
Inclusive Development International

 

 

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.

Continue reading

Corporate social responsibility in a changing world: Targeting conflict resource exploitation

by Rhodri C. Williams

The march of the voluntary guidelines continues, it seems, with new approaches geared to address gaps in earlier efforts to urge corporate self-control. As Peter Spiro noted some time back in Opinio Juris (and Chris Huggins pointed out in these pages), the promotion of “soft” voluntary standards as a means of getting at some very hard human rights violations is still seen with skepticism in many quarters.

Nevertheless, Mark Taylor makes an engaging case for such standards in a recent Open Democracy piece on the role of natural resource extraction in fueling conflict. The article highlights the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas, a standard adopted by the Organization for Economic Cooperation and Development (OECD) in May 2011 and subsequently regulated in the US through new regulations issued by the Securities and Exchange Commission (SEC)  under the Dodd-Frank Wall Street Reform Act.

Taylor notes several key insights that have emerged in the wake of older certification schemes such as the Kimberly Process for conflict diamonds. These include the manner in which both illicit inflows into conflict areas (such as small arms) and outflows (such as natural resources) have become incorporated into global market flows, as well as the extent to which vulnerable local populations may be just as dependent on extraction activities for their survival as warlords are for their arms budget. In light of such factors, Taylor argues that considerable advantages may be derived from focusing on business actors rather than states:

Like the Kimberly Process, or even UN sanctions, the Guidance seeks to exclude certain commodities from global trade flows. But there the similarity ends. Instead of obligating states, the Guidance places the responsibility on business to manage their supply chains. Instead of relying on a certification regime hobbled by a lack of state capacity, the Guidance deploys the concept of business due diligence, the practice of self-investigation and risk management in a business activity. And instead of targeting a commodity based on its association with rebel groups – a definition that has plagued the Kimberly Process, for example preventing it from taking action where abuses are committed by state armed forces, as in the case of Zimbabwe – the Guidance in effect focuses on the problems of conflict financing and human rights abuse associated with mineral extraction, regardless of whether the perpetrator is a state or non-state armed group.

In effect, the Guidance places the onus on businesses to show they are not financing conflict or contributing to human rights abuse through their sourcing of minerals. And nothing in the Guidance prevents states from regulating this responsibility to conduct due diligence, which is precisely what the US has done with the conflict minerals provision of Dodd-Frank, a measure the EU is now considering.

The combined reliance on traditional state regulation and more novel forms of corporate self-regulation is promising though not, as Taylor points out, unproblematic. However, even at this early stage, there may be timely lessons that could be drawn by the UN Food and Agricultural Organization (FAO) in its current efforts to develop a set of ‘demand side’ standards regulating the conduct of actors participating in large-scale land investments in developing countries. This process should be facilitated by the fact that the FAO has already launched a set of ‘supply side’ guidelines for countries that are the object of such investment. While the latter clearly addressed state authorities disposing over targeted land, the former will need to take into account the role of both state and powerful non-state actors whose investments are driving the global land-rush.

Finally, in a timely reminder that such policies and safeguards are often only as effective as the advocates that monitor their application, Inclusive Development International issued a press release announcing a complaint before the Asian Development Bank’s Compliance Review Panel. The complaint alleges a violation of the Bank’s involuntary settlement policies with regard to communities affected by an ADB-funded railway rehabilitation project in Cambodia (on which, see Natalie Bugalski’s guest postings here and here). As such, it recalls the ongoing controversy in Cambodia over the World Bank’s attempts to act on a finding by its own Inspection Panel of a violation of its Resettlement Policy.

The Onion on Corporate Social Responsibility Approaches

The Onion has the scoop on Goldman Sachs’ new CSR offensive, namely the hiring of a single employee with moral integrity to sit in an office entirely segregated from the rest of the company’s employees and take ethically grounded decisions his colleagues will resoundingly ignore:

“We are very pleased to welcome Mr. Kohler, who will be adhering to the letter of the law in a workspace physically detached from the rest of our firm’s operations,” public relations chief Richard Siewert said during a press conference. “He’ll be joining a select group of 33,000 talented individuals at Goldman Sachs as our sole employee not motivated purely by the pursuit of obscene wealth at the expense of society.”

“While Mr. Kohler won’t be attending a single meeting or influencing any of our business decisions, we’re confident his acute sense of professional integrity will prove a valuable asset,” Siewert continued. “He will technically be on our staff, collecting a paycheck, and that’s really all that counts.”

TN readers are advised to touch up their resumes – if the trend holds perhaps sovereign agricultural investment funds will soon be sniffing around.

Guest posting announcements and updates – Focus on Somalia, Colombia, Kosovo, Bolivia and Ecuador

First of all, I am very pleased to announce that repeat TN guest author and independent consultant Shane Quinn will shortly be providing some observations on recent proposals to stabilize Somalia by providing autonomy to its regions. I am also expecting follow-up pieces by Brookings collaborator Roberto Vidal on property issues in Colombia, and by legal aid team leader Massimo Moratti on property claims in Kosovo.

In the meantime, I also wanted to provide some follow-up on two recent guest-postings contributed by Nicholas Fromherz of the South American Law and Policy blog. First, Nicholas has provided an update to his earlier observations in TN on the controversy over plans to build a road through the TIPNIS nature reserve in Bolivia. Once again, it seems that the appearance of government restraint in the matter may be deceiving.

Second, a further comment on litigation over oil extraction-related damages in Bolivia by Chevron-associated law professor Doug Cassel on Opinio Juris – as well as the associated comments – highlight some of the key issues Nick raised in his guest-posting on the same topic – and its associated comments. Particularly interesting are questions related to tensions between the merits of the case and the behavior of the parties. However, Dr. Cassel also defends the engagement of human rights actors in favor of even big corporate plaintiffs like Chevron as necessary to demonstrate a level of consistency and impartiality necessary to convince such firms to sign onto voluntary human rights guidelines.

See Shane’s posting here:
– Local governance in Somalia – New emperor in old clothes? (18 April 2012)

 

FAO Voluntary Guidelines on land, fisheries and forestry governance near approval

by Rhodri C. Williams

The Food and Agricultural Organization (FAO) has announced the recent conclusion of a lengthy negotiation process to shape a set of Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. The resulting final draft will soon be published and is meant to be adopted at a special session of the body’s Committee on World Food Security (CFS) in mid-May. Afterwards, it is expected that the document will provide authoritative guidance to governments in drafting laws and policies in this area, with its legitimacy derived from the inclusiveness and extensiveness of the three year drafting process.

The scope of the voluntary guidelines is broad, and includes “promoting equal rights for women in securing title to land, creating transparent record-keeping systems that are accessible to the rural poor, and how to recognize and protect informal, traditional rights to land, forests and fisheries.” While numerous recent cases of abuse of state prerogatives over customarily held land demonstrate the needs for such guidelines, the experience of actors such as the International Development Law Organization (IDLO) counsels a degree of caution. As noted by the IDLO’s Erica Harper in these pages, prescriptive approaches to customary systems have tended to be counterproductive in the absence of an intimate understanding of local context:

…what works in a given country context is situation-specific and contingent upon a variety of factors, including inter alia, social norms, the presence and strength of a rule of law culture, socio-economic realities, and national and regional geopolitics. In order to make strategic decisions on what is likely to yield sustainable and positive impact, development practitioners need to possess in-depth knowledge of the target country, its people and its customary legal systems, as well as the theories and practicalities pertaining to legal development and customary justice programming.

At the same time, the scope of the new guidelines is limited in certain interesting respects. For instance, the FAO PR notes that they “come within the context of intensifying competition for land and other natural resources resulting from a variety of factors, including population growth, urbanization and large-scale purchases of farmland in the developing world by both overseas interests and domestic investors.” However, unlike the FAO, IFAD, UNCTAD and World Bank Principles for Agricultural Investment, the new guidelines provide only indirect guidance on addressing the ‘global land-rush‘.

In fact, the FAO has a separate drafting process underway to address large-scale land investment. As reported in TN last January, the FAO commissioned a project team to examine the issue of land tenure in the context of international investments in agriculture, developing recommendations for the High Level Panel of Experts on Food Security and Nutrition (HLPE) of the CFS. The issue had been discussed at a policy roundtable at the CFS’ 2010 session (contrast the erudite overview provided by ILC with the Quatar National Food Security Program’s impenetrable defense of responsible investment). With the issuance of a July 2011 report and further side-event discussion at the October 2011 CFS session, the process seems to be underway.

However, the foreword to the July 2011 report clarifies that the issue is to be handled in a separate standard-setting process, resulting in “the elaboration of principles for responsible investments in agriculture with due consideration to the framework of the Voluntary guidelines on the tenure of land, fisheries and forests.” Muddying the waters slightly, the FAO also cooperated with Transparency International to develop a December 2011 working paper on how corruption in the context of weak governance undermines both land access and development. As reported here in TN, pervasive corruption in transnational land investment may be the crucial damning factor that has swung development opinion against the practice in recent months. In its press release, however, FAO referenced the forthcoming voluntary guidelines as its response to bad governance practices without mentioning the expert group on international investments.

More broadly, the new FAO guidelines will provide new material for the ongoing debate over corporate social responsibility approaches to land and natural resource exploitation, as well as non-state actor abuses more broadly. Two years ago, Chris Huggins posed the basic question of whether the lengthy and uncertain route of punitive enforcement measures should be chosen over the more forthcoming but less tested route of voluntary compliance. This question arguably remains as debated today as it was then. However, it is worth noting that Peter Spiro recently waxed optimistic in Opinio Juris, raising the possibility that Apple’s recent accession to the Fair Labor Association standards and auditing process could be “the biggest thing ever to happen in the world of private, rights-related codes of conduct” and “a major test case for the efficacy and legitimacy of non-governmental rights regimes.” So, onward FAO, and let a thousand voluntary standards bloom!