Holding actors in agricultural investment chains to account

When communities lose access to land, or their livelihoods, as a result of large agricultural investment projects, what can they do? An IIED webinar examined how mapping out the investment chains and using 'pressure points' can help.

Guest blog by
22 October 2015

Thierry Berger is a qualified solicitor and legal tools consultant at IIED

Cambodia's rural population is heavily reliant on small-scale rice production. The Clean Sugar Campaign campaigns against large-scale plantations that push smallholders off their land (stefans_box, Creative Commons via Flickr)

How can local communities protect their rights when their land and livelihoods are affected by large agricultural investment projects?

Our recent webinar explored how mapping out the investment chains can help identify pressure points. Using an example from the Cambodian Clean Sugar Campaign, we saw how using those pressure points can help civil society to hold companies along the chain to account.

Large-scale agricultural investments (e.g. sugar plantations) frequently involve a variety of actors, including investors and lenders, companies managing the project locally, subcontractors, government authorities and buyers, often located across several countries.

This creates an 'investment chain', which can be defined as the network of all the actors making any investment project possible. Money flows in both directions along the chain, as explained in this animation and report.

Such projects can have benefits for local communities, but may also have damaging impacts, such as loss of land, loss of livelihoods or human rights abuses. When negative impacts occur, communities are often unclear about whom to hold accountable or how to do this. 

Identifying pressure points

'Mapping' an investment chain identifies the key actors in the project and the role they play – whether that is providing financial support, managing the project locally, or buying the produce. This in turn will help identify and activate 'pressure points', i.e. who can be targeted or used to influence the outcome of an investment.

David Pred and Natalie Bugalski from Inclusive Development International (IDI), who co-authored IIED's 'Following the money' guide, explained how this process had worked based on their experience working with a coalition of communities and civil society organisations (CSOs) with the Clean Sugar Campaign in Cambodia. 

Preddd's presentation, 'Promoting accountability in agricultural investment chains: lessons from practical experience', can viewed below and on IIED's SlideShare site.

Also available on Slideshare is a presentation on 'Promoting accountability in agricultural investment chains' by Philippine Sutz, a senior researcher in IIED's Legal Tools team, who introduced the topic of the webinar.

The Cambodian 'Clean Sugar' Campaign 

In the 1990s, following 30 years of war, large tracts of land in Cambodia were allocated to investors. This resulted in widespread deforestation with devastating consequences for local communities. 

Civil society initially tried to stop the process through various actions, including filing court cases in Cambodia. But this was not effective.

So working with IDI, they started to research all the actors involved so that they understood the whole investment chain and could identify the pressure points. As a result, the coalition decided to focus on the sugar market in four provinces where there were promising pressure points.

Targeting the pressure points

The coalition decided that the key thing was to identify 'strong' pressure points, i.e. actors who are responsive to advocacy and have the ability to influence decision-making on the ground. They identified a number of Cambodian concession companies involved in the chain, as well as some government actors who had approved the projects.

At the top of the chain, the companies involved were subsidiaries of companies based in Thailand and Taiwan. The coalition discovered that an Australian bank funded one of the Cambodian companies and a German bank funded the Thai company. 

At the bottom of the chain, the coalition found that the sugar was sold to a European buyer, which in turn sold it to a major soft drink conglomerate. The coalition also realised that that sugar was being exported to the European Union (EU) under the EU's Everything But Arms (EBA) initiative granting preferential trade treatment to Least Developed Countries, such as Cambodia. 

Leveraging the pressure points

The Clean Sugar Campaign decided to take a number of actions, including:

  • The communities initiated court proceedings against the European buyer in its home country
  • National CSOs filed a complaint with Bonsucro, the multi-stakeholder organisation that promotes sustainable sugar cane
  • They filed a complaint with the Thailand Human Rights Commission
  • Affected communities initiated a mediation procedure with the Australian bank before the Australian National Contact Point (established by the OECD to ensure multinational enterprises promote and implement OECD guidelines in countries that have adhered to them), and
  • They worked with CSOs in Europe to lobby the European Parliament and cEuropean Commission to withdraw/suspend the trade advantages under the EBA initiative.

Key successes

The campaign's results were impressive. For instance, some investors divested from the Thai company, the UK sugar company was suspended from Bonsucro, the soft drink conglomerate made a commitment to zero tolerance for land grabbing, and the European Parliament called on the European Commission to investigate human rights abuses in Cambodia and to suspend trade preferences on products in cases where abuses were identified.

An audit is now going to be carried out by the EU with the Cambodian government to assess the number of people displaced.

Key lessons

The Clean Sugar Campaign was a steep learning curve for IDI and its partners. They did not have a master plan when they started, and the mapping process was devised on the back of their experience. 

Building a network of CSOs outside of Cambodia was crucial as it allowed them to link up strategies (e.g. working with European NGOs to lobby the European Commission). At the local level, it was also important to get all the affected communities on board and to make sure they were in the driving seat. 

Devising an advocacy strategy was complex, and IDI and its partners had to take time to explain to local communities what was involved. Managing the communities' expectations was crucial, especially as many have still to be compensated. IDI did not want to make promises that could not be kept. 

The aim was to turn off the flow of money and that meant identifying all investors and buyers and applying pressure in as many places as possible.

Challenges going forward

Following the success of campaigns like the Clean Sugar Campaign, there is a risk that some businesses will try to organise their investments to avoid CSO scrutiny. Financial mechanisms are in particular getting more and more opaque, and it can be difficult to identify all the actors involved. 

No doubt new strategies, such as increasing the focus on companies' reputation or carrying our more in depth investigations, will be needed. But by mapping out the entire chain, communities and CSOs know who they will need to target.

Thierry Berger (thierryberger14@gmail.com) is a qualified solicitor and legal tools consultant at IIED focusing on law and sustainable development.

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