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Page 1: Content AGRICULTURAL RESPONSIBLE INVESTMENT: Initiative on ... · Reduce the risks to investment Protect the image and prestige of Vietnamese investors; Harmonize the relationship

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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

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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 7 179

1 12

3,509

2,3991,825

966449 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

7091

115

9

122

16 30 25 27 5

1,630

4,319

478

1,874

169 86908 372 163 1,239

0

1,000

2,000

3,000

4,000

5,000

020406080

100120140

Nông lâm thủy sản

Khaikhoáng

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

Tàichính -ngân

hàng -BH

Bất động sản

Giải trí-nghệ thuật

Tri

ệu

US

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

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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 BoardPage 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

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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_

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Thank you for your attention!

Contact:

Nguyen Hoang PhuongEmail: [email protected]