1. Reducing Land Rights Violations within Global Supply Chains Session on Scope for Improving Land Governance through the Value Chain 2016 World Bank Land and Poverty Conference Julian Oram, Global Witness March 17, 2016

2. How do risks of land rights violations arise for companies with global supply chains? As direct land investors (‘greenfield’ and ‘brownfield’ sites, including legacy issues) Through joint ventures/ takeovers Indirectly, through their supply chains As financiers/ investors By doing deals with States that commit land rights violations; and/ or where systems for democratic accountability and access to justice are dysfunctional

3. Reputational risks Material risks: –World Bank and UNCTAD study – high failure rate in Ag investments –Costs of local opposition – x29 magnitude (US$10m) Linked with other risk factors - social instability, conflict, migration, corruption, climate change Risks for companies and their investors

4. But…Poor Understanding of Risk Land tenure associated risks have been demonstrated (e.g. by TMP/RRI) to be substantial; financially and reputationally Yet many large companies are still not taking land rights / tenure associated risks seriously Same weight should be given by companies considering investing in a land / ag project, as would be given to investing in any new and relatively unknown context

5. No international law against land grabbing, but there are relevant obligations on companies and investors: –National Law (host state) – can be complex and contradictory –National Law (home state) –e.g. UK Bribery Act, FCPA –International Law – human rights obligations on companies and on States; UN Guiding Principles on Business & Human Rights; VGGTs 1,000s legal cases filed nationally by victims of land grabbing, but corruption provides elite with impunity International cases, legal firms focus on precedent-setting cases, eg: Land grabbing in Cambodia as a crime against humanity at ICC IFC, OECD, RSPO, FSC mechanisms + Chinese Mineral DD Guidelines IG Guide on VGGTs – good start, but only as good as its users! Policy, legal and regulatory frameworks and provisions

6. How should “land issues” be considered by companies and investors? IG Guidelines on VGGTs > a useful tool  Guidance on applying FPIC to greenfield investments  Undertaking proper due diligence to assess pre-existing disputes associated with brownfield site acquisitions/ M&As before getting involved  Setting the bar high for due diligence across the supply chain…. towards fully traceable supply chains, eg. Nestle/ Olam  Getting investors to consider both financially material and reputational risks when getting involved in a land-based project/ company Establishing Conflict resolution/ redress mechanisms Monitoring & Reporting, openly & honestly

7. The State You’re In  Excepting ungoverned areas, land grabs don’t happen unless the State allows it.  In some cases governments are actively complicit in land grabbing and human rights violations. Corrupt and kleptocratic regimes can also make it impossible for investors to follow the rule of law.  In these circumstances companies should recognise that its going to be difficult for them to operate responsibly, and be prepared to walk away.

8. Ultimately, Governments Should Govern We need binding, effective regulations and rule of law at national & international level, not more voluntary initiatives & commitments This means strengthening ‘democratic power’ to hold governments to account Industry leaders have a crucial role to play in supporting regulation.

9. Final (controversial?) thought… …The biggest thing MNEs could do to improve land governance is to use their influence to support civil society efforts towards greater democratic accountability.

10. Thanks Julian Oram – joram@globalwitness.org joram@globalwitness.org