The ABBBA Checklist on Sustainable Investments 31 May, 2013
Introduction This Checklist is designed for early assessments of project proposals. It is meant to be used by an independent actor and not primarily for self-assessments; although a dialogue between the evaluator and the project implementing party is necessary. The questions are formulated for assessments of projects ideas or businesses still in an early project phase, but can be used for established projects as well. If ABBBA decides to proceed with a project, we will recommend sector specific guidelines in the next phase. The questions are based on – but cannot claim to cover – international guidelines such as The Voluntary Guidelines on the Responsible Governance of Land, Fisheries and Forests in the Context of National Food Security (FAO 2012), IFC Performance Standards on Environmental and Social Sustainability (IFC 2012), and Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources (PRAI 2010). The Checklist includes aspects of social effects, environmental effects, economic sustainability, transparency & corruption, partnerships & relations, working conditions & labor rights, and management & monitoring. The section on social effects and the section on environmental effects have four questions each that are to be answered through the rating method described below. All other question should be answered with yes/no and an added comment.
Rating method and example The rating method only concerns questions on how the project will affect different social and environmental issues. The effect should be rated at a scale from -5 to +5, where -5 is very negative, +5 is very positive and the midpoint (0) is no effect at all. Add a comment to each rating. Example: How will the project have an impact on climate change?
-5
0
+4
+5
Comment: Since the stove reduces carbon dioxide emissions by 40 percent and emissions of other toxic gases are reduced by 70 percent, the climate effect is considered to be positive. Since the production model involves shipping from China, a certain transport GHG-emission will occur. This is estimated to be ... etc…
Social Effects Rate -5 to +5 and add a comment for each question 1. How will the project affect food security and the possibility of diversified livelihoods/selfsufficiency?1 2. How will the project affect local job opportunities and local income levels? Please specify how job opportunities and income levels are likely to affect both women and men. 3. How will the project affect minorities/ethnic groups/marginalized groups/indigenous peoples?2 4. How will the project affect local traditions/practices/cultural behavior?3 Answer yes/no and add a comment for each question 5. Is the project controversial/likely to generate debate/touch upon a critical issue? 6. Will the project threaten the rights of any individuals/groups (including civil, political, social and cultural rights)?4 7. If relevant, are consultation, grievance, and remedy mechanisms in place? Are local communities and other effected groups/individuals informed about the mechanisms?5 8. If relevant, are informal tenure holders’ and informal workers´ rights protected?
Environmental Effects Rate -5 to +5 and add a comment for each question 1. How will the project have an impact on climate change (generating GHGemissions/replacing fossil fuels etc.)? 2. How will the project affect water usage, minerals, or other natural resources (including biodiversity and other living natural resources)?6 3. How will the project affect air, land, soil, and water in terms of pollution?7 Please include aspects such as usage of pesticides, activities generating toxic waste etc. 4. How will the project affect the local environment? Please include aspects such as disturbing noise, smells etc. 1
UN, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security § 12.4 2 UN, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (2012, § 9) 3 UN, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security (2012, § 9) 4 UN, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. § 4.8 5 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:30-36 6 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 6 7 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 3
Answer yes/no and add a comment for each question 5. Does the project have an impact in terms of Land Use Change? 6. Does the company have a realistic and long-term plan for environmental impact?
Economic sustainability Answer yes/no and add a comment for each question 1. Is the assessment of the price structure and market realistic? 2. Is the project budget realistic? 3. Is the project economically viable?8 4. Is there a long-term and sustainable financial plan? 5. Are there high financial risks associated with the project (such as heavily dependence on highly variable rates, dependence on one single donor or customer etc.)? 6. Does the project respect the rule of law and reflect industry best practice?9 7. If relevant (e.g. concerning crop investment agreements with net food-importing countries), is a certain minimum percentage of the crop/foodstuff produced sold on local markets?10 8. Is the implementing party’s financial resources sufficient to carry out the project idea?
Organization and competence Answer yes/no and add a comment for each question 1. Does the implementing organization have sufficient skills to carry out the planned activities?11 2. Is the technology/project design relevant to the stated objectives? 3. Is the technology/project design adapted to local circumstances? 4. Are the proposed technology and/or business model innovative in its design? If so, please specify in what way. 5. Has the proposed technology and/or business model been tried and tested elsewhere (in a similar context or region)? 6. Does the business model have any comparative advantages? If so, please specify in what way. 8
PRAI - Principles for responsible agricultural investment that respects rights, livelihoods and resources (2010) Principle 5 PRAI - Principles for responsible agricultural investment that respects rights, livelihoods and resources (2010) Principle 5 10 Large-scale land acquisitions and leases: A set of minimum principles and measures to address the human rights challenge (De Schutter, 2009) Principle 8 11 Oktagonen - Ett verktyg fĂśr att bedĂśma styrkor och svagheter i enskilda organisationer (2002) 9
7. When relevant, does the project generate improved technologies for local farming and/or forestry?12 8. Is there a scale-up component to the project?
Transparency and corruption Answer yes/no and add a comment for each question 1. Is the company acting in a transparent manner (communicating openly, sharing documents, welcoming visits etc.)? 2. Is there a risk of corruption (internally or in relation with partners/agencies/local or national governments, local communities etc.)? 3. Is there an action plan to prevent corruption? 4. If relevant, does the company provide staff training on its anti-corruption policy? 5. Is the implementing party’s track record a critical issue?
Partnerships and relations Answer yes/no and add a comment for each question 1. Does the project risk creating conflict or tension with local and/or national governments, local and/or national NGOs, trade unions, and/or institutions? 13 2. Has the company got the ability to communicate and share relevant information externally, to local communities etc.?14 3. Do local and national decision-making bodies approve of the project?15 4. Does the project contest with any national or local law, legislation and practice?16 5. Does the project have a long-term plan for collaboration with the local community?
Working conditions and labor rights Answer yes/no and add a comment for each question 1. Is the workplace safe and healthy?17 2. Are vulnerable categories of workers protected, such as migrant workers, workers 12
Large-scale land acquisitions and leases: A set of minimum principles and measures to address the human rights challenge (De Schutter, 2009) Principle 4 13 UN, Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security. § 25 14 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:29 15 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:6 16 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:6 17 BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct
engaged by third parties, and workers in the clients supply chain? 18 3. Are freedom of association and the right to collective bargaining respected?19 4. Is child labor prohibited? 20 5. Are legal minimum and/or industry standard wages paid? 21 6. Are working hours in compliance with national laws? Do they exceed 48 hours regular + 12 hours overtime?22 7. Are there any forced labor and/or disciplinary measures? 23 8. Is there a sufficient number of staff and a clear division of labor?24
Management and monitoring Answer yes/no and add a comment for each question 1. Is there mechanisms and sufficient competence to monitor and evaluate impact and activities? 2. Are regular external/independent audits performed? 3. Are regular internal inspections performed?25 4. Is there a risk management system in place? 5. Is there emergency preparedness, response system, and natural disaster prevention?26 6. If relevant, are agreed obligations enforceable and in cases of non-compliance, are sanctions pre-defined?27
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IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 2, introduction. BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct 20 BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct 21 BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct 22 BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct 23 BSCI Code of Conduct, http://www.bsci-intl.org/our-work/bsci-code-conduct 24 Oktagonen - Ett verktyg fรถr att bedรถma styrkor och svagheter i enskilda organisationer (2002) 25 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:23 26 IFC Performance Standards on Environmental and Social Sustainability (2012) Performance Standard 1:20 27 Large-scale land acquisitions and leases: A set of minimum principles and measures to address the human rights challenge (De Schutter, 2009) Principle 7 19