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  • 1

    AGRICULTURAL RESPONSIBLE INVESTMENT:

    Initiative on developing Voluntary

    Guideline to mitigate the environmental

    – social risks for Vietnamese investors

    Nguyen Hoang Phuong

    Policy Research Department

    People and Nature Reconciliation

    Page  2

    Content

     Why do we need socially – environmentally responsible investing?

    – Adversely environmental impacts to investment;

    – Legal risks;

    – Affected image and reputation of investors and host country.

     Initiative on developing the Voluntary Guidelines

    – Research on Vietnam’s agribusiness in sub-Mekong region

    – Pioneered Enterprises for co-developing

     Introduce on Voluntary Guidelines (edition for pilot apply)

    – Objectives

    – Principles based approach

    – Structure

     Piloting progress

    Page  3

    Climate change

    Source: IPCC (2014)

    Does the Flap of a Butterfly's

    Wings in Brazil Set off a

    Tornado in Texas? Page  4

    Historic drought and saline intrusion in Mekong Delta 2016

    • This is the most severe

    drought in last 100 years;

    • Saline intrusion attacked

    into 13 provinces in

    Mekong Delta;

    • 10 province declared the

    disaster situation and

    some of them hit the

    highest level of saline

    intrusion disaster.

    • Damaged around 160,000

    hectares of rice, estimate

    complete loss of 800,000

    tones rice (MARD);

    • Around 20 million affected

    people.

    Picture’s source: Cafef.vn

    Page  5

    International legal risks related to land conflicts

    Land conflicts started since 2006 and still going on. There are a lot of international dispute resolution mechanisms have been applied.

    Page  6

    Everything

    But Arms

    KSL Group

    of Thailand

    (70%)

    Koh Kong Plantation Co. Ltd (KKPC)

    9.400ha

    Koh Kong Sugar Co. Ltd. (KKSI)

    9.700ha

    Ve Wong Corporation of

    Taiwan

    Senator Ly Yong Phat

    (Shares sold in 2010)

    Producers

    Tate & Lyle of UK

    American Sugar Refining (ASR) -2010

    Buyers

    Government pension fund

    global of Norway

    The OECD

    Guidelines for

    Multinational

    Enterprises

    Users

    International Legal risks: Thailand investment in sugar plantation in Cambodia case study

    Financiers

    Cambodia’s

    mechanism

    International mechanisms

    https://www.ipcc.ch/report/ar5/wg3/ http://cafef.vn/man-hon-nuoc-mat-khong-ly-nong-van-ly-huong-20160509091415399.chn http://www.boycottbloodsugar.net/whos-involved/ve-wong-corp/ http://www.boycottbloodsugar.net/whos-involved/l-y-p-group-and-ly-yong-phat/

  • 2

    Page  7

    Affected image and reputation of investors and host country.

    • Boycott campaigns;

    • Technical Barrier for goods

    exportation and monitoring;

    • Limited access to markets,

    capital and potential

    partners.

    Page  8

    Research on Vietnam’s agricultural investment in Mekong sub-region

    Cambodia

    December 2015

    May 2016

    Laos

    May 2016

    Vietnam

    June 2016

    210

    105

    2 17 2 7 1 79

    1 12

    3,509

    2,399 1,825

    966 449 413 346 254 225 128

    0

    500

    1,000

    1,500

    2,000

    2,500

    3,000

    3,500

    4,000

    0

    50

    100

    150

    200

    250

    Số dự án Vốn đăng ký (triệu USD)

    (*) Luỹ kế các dự án còn hiệu lực đến ngày 31/12/2011

    Top 10 of Vietnam outward investment by country

    70 91

    115

    9

    122

    16 30 25 27 5

    1,630

    4,319

    478

    1,874

    169 86 908 372 163

    1,239

    0

    1,000

    2,000

    3,000

    4,000

    5,000

    0 20 40 60 80

    100 120 140

    Nông lâm thủy sản

    Khai khoáng

    CN chế biến,

    chế tạo

    SX và PP điện, khí đốt

    Buôn bán xe

    có động cơ

    Vận tải, kho bãi

    Thông tin và

    truyền thông

    Tài chính - ngân

    hàng - BH

    Bất động sản

    Giải trí- nghệ thuật

    T ri

    ệ u

    U S

    D

    Số dự án Số vốn đăng ký

    Top 10 of Vietnam outward investment by sector

    Nguồn: Tổng cục Thống kê

    Page  9

    Some key findings

    Limited inclusive information on opportunities and challenges of tentative projects before decision making;

    Lack of awareness and understanding on international laws and international dispute resolution mechanisms;

    Improperly evaluation of social and environmental risks arising from foreign investment;

    Poor connection, information sharing and investment supportsResearch

    Page  10

    Ideas for guidelines development

    Information Supply

    Supported Tool for Investors

    Awareness Raising

    Reference for Stakeholders

    Networking and

    Implementing support

    Suitable for Vietnamese private sector

    The guidelines aim to:

    Reduce the risks to investment

    Protect the image and prestige of Vietnamese investors;

    Harmonize the relationship between investors and other stakeholders, especially local communities

    Enterprises

    Business Associations

    Research Team

    Guideline Development Team

    Page  11

    Pioneers Group

    Vietnam Rubber Association (VRA)

    • Ms Trần Thị Thúy Hoa – Head of Advisory Committee for Rubber Industry Development

    Tín Nghĩa Corporation

    • Mr. Huỳnh Tấn Dũng – General Director in Laos

    Hoang Anh Gia Lai Group (HAGL)

    • Mr. Nguyễn Xuân Thắng – General Director of HAGL Agricultural JSC

    Vietnam – Laos – Cambodia Association for Economic Development (VILACAED)

    • Mr Vũ Đình Tích – Head of Information Department

    385 Economic Cooperation Ltd.

    • Mr. Nguyễn Văn Tuy – Head of Planning and Business

    Southern Laos Friendship Ltd.,

    • Mr. Trương Mạnh Tùng - Head of Planning and Business

    Vietnam Rubber Group (VRG)

    • Mr. Phạm Văn Thành – Head of Planning and Investment Department, Member of Board of Directors

    GEMADEPT JSC

    • Mr. Vũ Ninh – Member of Management Board Page  12

    Understanding the Corporate social responsibility (CSR)

    Voluntary contributions to community development,

    charity and other social and environmental efforts.

    Understand and address business impact on society,

    to avoid adverse impact and maximize the benefits.

    People and Nature Reconciliation

    This is the definition of CSR used by the European Union.

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    Page  13

    Principles-based approach

    PROTECT

    National Laws of companies in business

    relationships

    Home country’s Laws

    Host country’s Laws

    International Human Rights Laws

    Company policies through its business

    relationships

    Policies from financial fundings

    Based on UN

    Guiding

    Princinples

    on Business

    and Human

    Rights

    Page  14

    Outline of Guidelines

    Opening

    • Acknowledgements

    • Pioneers Group Introduction

    • Guideline introduction: Objectives, Scopes, Usage

    • Principles-based Approach

    Content

    • Recommendations for each stage of the investment process

    • 20 Examples

    Annexes: Useful information

    •Some Conflicts Resolutions Mechanism

    •Laws on related investment (Vietnam, Laos and Cambodia Laws, international human rights treaties,)

    •International safeguards policies, Guidelines for reference

    •Useful contacts

    Page  15

    Guideline Framework

    Investment steps

    Preparation Implementation Closing

    Risk Identification

    Recommendations

    References and Examples

    How-to-do

    Land

    Labor

    Environment

    Culture/ Indigenous

    Peoples

    Page  16

    Risks and dispute resolution mechanisms

    State Judiciary

    State alternative

    dispute resolution

    Human rights mechanism

    Non-State dispute

    resolution

    Page  17

    3. Field survey

    4. Identify the risks

    5. Recommendation for pilot

    6. Midterm evaluation

    7. Field survey

    8. Final Evaluation

    1. Review the company’s policies

    2. Initial evaluation

    VOLUNTARY

    GUIDELINES

    Pioneers in piloting Voluntary Guidelines in 2017-2018

    Page  18

    “HELP YOURSELF BY HELPING OTHERS” _Ho Chi Minh President_

    http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf

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    Page  19

    Thank you for your attention!

    Contact:

    Nguyen Hoang Phuong Email: hoangphuong@nature.org.vn

    mailto:hoangphuong@nature.org.vn