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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.
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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
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.
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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
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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
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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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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
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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
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Guideline Framework
Investment steps
Preparation Implementation Closing
Risk Identification
Recommendations
References and Examples
How-to-do
Land
Labor
Environment
Culture/ Indigenous
Peoples
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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
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“HELP YOURSELF BY HELPING OTHERS”_Ho Chi Minh President_
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