Business and Human Rights in the ASEAN by IDEALS Inc.

BUSINESS AND HUMAN RIGHTS IN THE ASEAN: Procedures, Responsible Investments, and Making the Case for Women

ÂŠ Oxfam, June 2018 The policy papers and case study presented in this document were written by BHRRC and IDEALS, respectively. For more information, or to comment on this publication, please email Shubert Ciencia at SCiencia@oxfam.org.uk. This publication is copyright but the text may be used free of charge for the purposes of advocacy, campaigning, education, and research, provided that the source is acknowledged in full. The copyright holder requests that all such use be registered with them for impact assessment purposes. For copying in any other circumstances, or for re-use in other publications, or for translation or adaptation, permission must be secured, and a fee may be charged. The views expressed on this handbook are those of the authors and do not necessarily reflect the views of Oxfam and/or the Embassy of Sweden in Bangkok. Published by GRAISEA Programme, Oxfam, in June 2018 www.oxfam.org.uk/graisea

Photos: Mark Vincent Aranas, Michael Glowacki, BHRRC, and IDEALS Production Coordinators: Mark Vincent Aranas and Shubert Ciencia Design and Layout: Richard Agcaoili

III

Table of Contents List of Acronyms

Acknowledgement

VII

Introduction TO THE HANDBOOK ON BHR IN THE ASEAN

National Action Plans on Business and Human Rights in the ASEAN:

Observations and Recommendations on the Procedural Aspects of NAP Development

1 Introduction

Country Commitment to the UNGPs as the Foundation of NAPS

Observation on the Procedural Aspects of NAP Development in the Asean

3.1 Seeking a formal commitment from government to engage in the NAP process, and designating leadership

3.2 Creating a format for cross-departmental collaboration within government

3.3 Establishing platforms of engagement and consultations with various stakeholders

3.4 Arriving at agreements on what to do with the outcome of consultations

4 Recommendation

Promoting responsible and inclusive agriculture investments through ASEAN trade and investment agreements

19 23

Introduction and context

Implications of trade and investment agreementson food security, labour rights, and land governance

2.1 Food security

2.2 Labor rights

2.3 Land governance

Final Note on the Need to Integrate Human Rights in Trade and Investment Agreements

Rural Women and Human Rights:

Findings and recommendations from consultations in CambodiA

1 Introduction

Consultations with Rural Women of Cambodia

Legal and Policy Framework

3.1 International laws in relation to the land and agriculture

3.2 International laws in relation to the labour sector

3.3 Relevant national laws, policies and initiatives

4 Findings 4.1 Womenâ&#x20AC;&#x2122;s awareness of business practices or policies

48 48

4.2 Insecurity of land tenure

4.3 Economic insecurity caused by loss of farmland

4.4 Inequality between women and men

4.5 Discrimination against pregnant women

4.6 Womenâ&#x20AC;&#x2122;s role in supply chains

4.7 Positive development: Interventions to strengthen women activism

Conclusions and Recommendations

Good and Bad Practices in the export-driven Banana Industry in the Philippines 1

Executive Summary

61 62

2 Methodology

The Philippine Banana Industry

Negative Impacts

Best Practices

6 Conclusion

Policy Recommendations

LIST OF ACRONYMS ACIA AICHR AMS MARBEMCO AO ARBs ASEAN AVA BHR BHRRC BHRWG BITs CARP CCHR CFARBEMCO CFS CHR CSOs CSR DAR DARAB DFBGARC DFC-ARBA DFWC DOJ ELCs ELSAM EPSA FDI FPIC GATT GRAISEA

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

HARBCO HB HPI HRIA ICAR ICFBMPC IDEALS

– – – – – – –

ILO JPA LFC LMW LTU MCB-MPC NAEC NAPs NCC NUVILASCO PARC

– – – – – – – – – – –

ASEAN Comprehensive Investment Agreement ASEAN Intergovernmental Commission on Human Rights AMS Magatos ARB Multipurpose Cooperative administrative order agrarian reform beneficiaries Association of Southeast Asian Nations agribusiness venture agreement business and human rights Business & Human Rights Resource Centre Business and Human Rights Working Group bilateral investment treaties Comprehensive Agrarian Reform Program Cambodian Center for Human Rights Checkered Farm ARB Multipurpose Cooperative UN Committee on World Food Security Commission on Human Rights civil society organizations corporate social responsibility Department of Agrarian Reform DAR-Adjudication Board Davao Fruits Banana Growers Agrarian Reform Cooperative Davao Fruits Corporation ARB Association Dizon Farm Workers Cooperative Department of Justice Economic Land Concessions Institute for Policy Research and Advocacy Exclusive Production and Sales Agreement foreign direct investment free, prior, and informed consent General Agreement on Tariffs and Trade Gender Transformative and Responsible Agribusiness Investments in South East Asia Hijo ARB Cooperative House Bill Hijos Plantation Inc. human rights impact assessment International Corporate Accountability Roundtable Islanders CARP Farmer Beneficiaries Multipurpose Cooperative Initiatives for Dialogue and Empowerment through Alternative Legal Services International Labour Organization Joint Production Agreement Lapanday Foods Corporation Law on Minimum Wages Law on Trade Unions Mampising CARP Beneficiaries Multipurpose Cooperative National AVA Evaluation Committee National Action Plans New Civil Code Nueva Visayas Labor Services Cooperative Presidential Agrarian Reform Council

VI PARAD PBGEA PHRC PNAP RCAF TAGCO TIAs TPP UNDRIP UNGPs UNWG UPR WTO

– – – – – – – – – – – – –

Provicial Agrarian Reform Adjudicator Philippine Banana Growers Exporters Association Presidential Human Rights Council Philippine National Action Plan Royal Cambodian Armed Forces Tagnanan Agricultural Marketing Cooperative trade and/or investment agreements Trans-Pacific Partnership United Nations Declaration on the RIghts of Indigenous Peoples United Nations Guiding Principles United Nations Working Group Universal Periodic Review World Trade Organization

VII

ACKNOWLEDGMENT An advocacy on business and human rights (BHR)—or any advocacy at all—will not gain ground in silos. To actually produce substantive results, efforts have to be established together with different actors who crave for real advancement on BHR. With this in mind, Oxfam’s work on BHR has been a collaborative journey with partners in Asia at both local and regional levels. This handbook, in particular, highlights the experiences of Oxfam partners in promoting responsible business conduct through procedures, responsible investments, and making the case for women. This endeavor would not have been possible without the support of Oxfam Hong Kong through its advocacy work on the United Nations Guiding Principles (UNGPs) on Business and Human Rights. We also extend our gratitude to the Business & Human Rights Resource Centre (BHRRC) and the Initiatives for Dialogue and Empowerment through Alternative Legal Services (IDELAS) who wrote the policy papers and case study that build this handbook. Likewise, we acknowledge the GRAISEA Programme Management Unit in providing support to the production and editorial stages of this handbook, as well as the Oxfam in Asia team for providing technical support in reviewing the papers.

VIII

Introduction

INTRODUCTION TO THE HANDBOOK ON BHR IN THE ASEAN Overview on the UNGPs Unanimously endorsed by the United Nations Human Rights Council in June 2011, the UN Guiding Principles (UNGPs) on Business and Human Rights (BHR)—for the first time— clearly defined the roles and responsibilities of the state and businesses, and available means of redress to those whose human rights have been violated. Based on the “Protect, Respect, and Remedy” framework, the UNGPs rest on the three pillars of: (1) State Duty to Protect against human rights abuses by third parties through regulation, policymaking, investigation, and enforcement; (2) Corporate Responsibility to Respect by undertaking human rights due diligence to avoid causing or contributing to adverse human rights impacts; and (3) Access to Remedy through the state’s duty to provide judicial, administrative, and non-judicial access to remedies for victims, and the corporate responsibility to provide grievance mechanisms. The UNGPs provide other stakeholders an opportunity to engage both government and corporations to develop and promote international human rights norms on women’s empowerment that will mainstream equal pay and

PILLAR

STATE

BUSINESS

VICTIM

NEED

PROTECT

RESPECT

REMEDY

ACTORS

Protect against human rights abuses by actors including business

Respect human rights throughout the value chain

Greater access to remedies in the case of human rights abuses

Policies Legislation Regulation Adjudication

Acting with due diligence Addressing adverse impacts

ACTION

Source: Report to the Human Rights Council by John Ruggie, 2011

Business and Human Rights in the ASEAN

opportunities, health and safety in working conditions, and maternity rights; and as a platform to engage businesses and corporations in their corporate social responsibility (CSR) agenda, with the intention of transforming CSR to include social investments for the development of micro, small, and medium enterprises that will enable womenâ&#x20AC;&#x2122;s economic empowerment in agricultural value chains.

Promoting the UNGPs in the ASEAN This handbook provides interested BHR stakeholders references in developing operational models on BHR and in effectively engaging regional and national processes in crafting action plans on the UNGPs. The papers include: A. Policy briefs that were generated through an intensive research by the Business & Human Rights Resource center (BHRRC): 1. National Action Plans on BHR in the ASEAN: Observations and Recommendations on the Procedural Aspects of NAPs Development that gives an analysis on the ongoing NAP development processes in four ASEAN member-states, and provide recommendations in ensuring the inclusiveness and relevance of these processes. 2. Rural Women and Human Rights: Findings and Recommendations from Consultations in Cambodia that presents a first-hand account on the human rights situation of rural women in Cambodia and offers recommendations in enabling gender transformation in agricultural value chains that can be a possible template for other ASEAN memberstates. 3. Promoting Responsible and Inclusive Agricultural Investments through ASEAN Trade and Investment Agreements (TIAs): Opportunities and Challenges that gives an analysis of these TIAs and their potential effects on the ability of ASEAN membersstates to implement policies that will promote responsible and inclusive agricultural investments in the ASEAN. B. A case study on good and bad practices on corporate investments in the Philippine banana industry by the Initiatives for Dialogue and Empowerment through Alternative Legal Services (IDEALS) to further illustrate

Introduction

the need for policies that will guide responsible agricultural investments. We hope that through this handbook, stakeholders are provided with expert references in further understanding the important elements of a National Action Plan on Business Human Rights, and why responsible business is actually good business for both companies and their host communities.

NAPS on BHR in the ASEAN

NATIONAL ACTION PLANS ON BUSINESS AND HUMAN RIGHTS IN THE ASEAN: Observations and Recommendations on the Procedural Aspects of NAP Development1 Business & Human Rights Resource Centre

1 This report compiles BHRRC’s observations and lessons learned on the procedural aspects of the development of national action plans on business and human rights (NAPs or NAP on BHR) in ASEAN memberstates. Most of these observations are derived from the Centre’s participation in various capacities in NAP processes in the ASEAN, as well as from its conversations with close allies who are deeply involved in their respective country efforts.

Business and Human Rights in the ASEAN

1 Introduction In 2011, the United Nations Human Rights Council endorsed the UN Guiding Principles (UNGPs) on Business and Human Rights (BHR) to help clarify the roles of governments and companies in addressing the human rights impacts of business enterprises. The UNGPs are founded on the following:

A NAP is an “evolving policy strategy developed by a State to protect against adverse human rights impacts by business enterprises in conformity with the UNGPs on BHR.”

1. States’ existing obligations to respect, protect, and fulfil human rights and fundamental freedoms 2. The role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights 3. The need for rights and obligations to be matched with appropriate and effective remedies when breached The UNGPs are implemented through various means, such as introducing relevant legislation and policies, changing corporate policy and practice, and providing remedies for victims of business-linked human rights abuses. Likewise, states implement the UNGPs through the development of national action plans on business and human rights (NAPs or NAP on BHR). The UN Working Group (UNWG) on BHRs Guidance on National Action Plans on Business and Human Rights2 defines a NAP as an “evolving policy strategy developed by a State to protect against adverse human rights impacts by business enterprises in conformity with the UN Guiding Principles on Business and Human Rights.” The development of NAPs in ASEAN is encouraging increased interaction among governments, civil societies, and businesses—albeit with some groups still being heard more than others, and others still being totally excluded. Indonesia, Thailand, Philippines, and Malaysia are the most advanced ASEAN member-states in terms of developing a NAP on BHR. The idea has also been introduced in other countries, such as Myanmar, with various Civil society organizations (CSOs) leading the call for a process that 2 United Nations Working Group on Business and Human Rights. 2016. Guidance on National Action Plans on Business and Human Rights. Geneva, Switzerland: UN. http://www.ohchr.org/Documents/Issues/ Business/UNWG_NAPGuidance.pdf

NAPS on BHR in the ASEAN

meets international standards and best practice. Multi-stakeholder participation is critical in ensuring that NAPs are inclusive, rights-based, and victim-centered. ASEAN governments in the process of developing NAPs could all do better to ensure broader participation of communities, workers, and companies.

2 Country commitments to the UNGPs as the foundation of NAPs The UNWG on BHR has emphasized that it is essential and indispensable for an effective NAP to be founded on the UNGPs. It said: “As an instrument to implement the UNGPs, NAPs need to adequately reflect a State’s duties under international human rights law to protect against adverse businessrelated human rights impacts and provide effective access to remedy. A NAP further needs to promote business respect for human rights including through due diligence processes and corporate measures to allow for access to remedy. Moreover, NAPs must be underpinned by the core human rights principles of nondiscrimination and equality.”3

Thus, recommendations under NAPs should address the three pillars4 of the UNGP under its “Protect, Respect, and Remedy” framework: 1. The state duty to protect against human rights abuses by third parties, including business; 2. The corporate responsibility to respect human rights; and 3. Greater access by victims to effective remedy, both judicial and non-judicial. 3 Ibid. 4 Ruggie, J. 2008. UN “Protect, Respect and Remedy” Framework and Guiding Principles. Business & Human Rights Resource Centre. https:// www.business-humanrights.org/en/un-secretary-generals-specialrepresentative-on-business-human-rights/un-protect-respect-andremedy-framework-and-guiding-principles.

Business and Human Rights in the ASEAN

Based on these pillars, countries developing NAPs need to bring together stakeholders from government, businesses, and civil society in a process that should be constructive and solutions-centered. These actors usually encounter each other in more tense contexts where human rights abuses are being alleged, and victims/survivors are seeking redress. The NAP process is a unique platform to address human rights issues before abuses occur, with proposals ideally coming from all key stakeholders.

Indonesia, Malaysia, Philippines, and Thailand have all publicly committed to ensuring that their plans are consistent with the UNGPs.

Between December 2014 and January 2015, the Business & Human Rights Resource Centre (BHRRC) contacted over 100 governments and asked them to provide information on actions they have taken on.5 At that time, the response rate of governments from Asia and the Pacific was the lowest; out of the 19 governments invited to respond, only three governments did (i.e., Indonesia, Myanmar, and Japan).6 This has started to change among ASEAN member-states, with more countries acknowledging the UNGPs and using them to guide national policy and strategies. In its report titled Baseline Study on the Nexus between Corporate Social Responsibility and Human Rights, the ASEAN Intergovernmental Commission on Human Rights (AICHR) emphasized that its work has “strong reference with established internationally recognized frameworks, particularly the UN Protect, Respect, and Remedy framework for business and human rights, the UNGPs, and other relevant internationally recognized tools and measurements to regulate corporate conducts.”7 Indonesia, Malaysia, Philippines, and Thailand have all publicly committed to ensuring that their plans are consistent with the UNGPs. Myanmar did the same in 2015, but the process has lagged since, with most initiatives now coming from civil society alone. Indonesia’s National Human Rights Commission or Komnas HAM, in its 2016 Submission to the United Nations 3rd

5 Business & Human Rights Resource Centre. Government Action Platform. 2015. Action on Business & Human Rights: Where are we now? https://www.business-humanrights.org/sites/default/files/Action_ Platform_Final.pdf 6 Ibid. 7 ASEAN Intergovernmental Commission on Human Rights (AICHR). 2014. Baseline study on the nexus between corporate social responsibility and human rights: An overview of policies and practices in ASEAN. Singapore: ASEAN CSR Network. http://asean-csr-network.org/c/images/ ASEANBaselineStudyonCSRandHRFINAL.pdf

NAPS on BHR in the ASEAN

Universal Period Review, reiterated government’s support to the UNGPs. When it launched its NAP in June 2017, Indonesia also included, as one of the objectives, the need to harmonize the perception of all stakeholders regarding the application of the UNGPs. Indonesia’s NAP is also structured according to the three pillars of the UNGPs. Each pillar includes discussions on the following: (1) description of the main principles; (2) mapping of policies, including analysis of existing policies that can be used as modalities to implement the principles of each pillar; and (3) policy plans/initiatives that can be developed to encourage synergy in implementing each pillar. Meanwhile, Malaysia’s Strategic Framework on a National Action Plan on Business and Human Rights, prepared by the Human Rights Commission or SUHAKAM, recommended the use of the UNGPs as the foundational reference for the country’s NAP.8 Further, it provides clearly SUHAKAM’s hope that “translating the Guiding Principles into concrete objectives and recommendations specific to Malaysia will provide entry points for obtaining the commitment of government and nongovernmental stakeholders to develop a NAP, and begin the process of obtaining the stakeholder input needed to formulate NAP action points.”9 The Philippines’ commitment to the UNGPs showed from early conversations around the development of a NAP under the leadership of the Commission on Human Rights (CHR). In its 2015 Accomplishment Report, the CHR recognized that: “The formulation of a National Action Plan by states is seen as a crucial step for its implementation of the UNGP. To date, a number of States have formulated their NAP on the UNGP implementation. For the Philippines, formulating a NAP on BHR will require calibrated steps considering that the UNGP has yet to be appreciated by the various agencies and branches of government.”10

8 Human Rights Commission of Malaysia (SUHAKAM). 2015. Strategic Framework on a National Action Plan on Business and Human Rights for Malaysia. Kuala Lumpur, Malaysia: SUHAKAM. http://www.suhakam.org. my/strategic-framework-on-a-national-action-plan-on-business-andhuman-rights-for-malaysia-2015/. 9 Ibid. 10 Commission on Human Rights (Philippines). 2016. 2015 Accomplishment

Business and Human Rights in the ASEAN

The Presidential Human Rights Council (PHRC) was tasked to lead the development of the NAP. In March 2017, during the 1st Core Group Discussion-Workshop, the PHRC re-affirmed the government’s commitment to use the UNGPs as anchor for the Philippine NAP.11

With everincreasing intraASEAN trade, and with ASEAN positioning itself as a major investment hub, policies and practices must be introduced among states and businesses that will protect and promote human rights, and provide remedies for victims of rights abuses.

For Thailand, commitment to the UNGPs was publicly made by Prime Minister Gen Prayut Chan-o-cha.12 He expressed his belief that implementing the principles will be beneficial to businesses and the government. In a seminar titled, “Disseminating and Driving Forward the UNGPs on Business and Human Rights in Thailand,” the Prime Minister also witnessed the signing of a memorandum of cooperation to mobilize actions under the UNGPs. The memorandum was signed by the National Human Rights Committee, the Ministry of Justice, the Ministry of Foreign Affairs, the Ministry of Commerce, Federation of Thai Industries, the Thai Bankers Association, the Thai Chamber of Commerce, and the Global Computing Network of Thailand. Thailand’s NAP process was initiated as a result of Sweden’s recommendation in Thailand’s second Universal Periodic Review, which took place on 11 May 2016.13 The recommendation that the Thai government accepted was for it to “develop, enact, and implement a NAP on BHR in order to implement the Guiding Principles on Business and Human Rights.” ASEAN’s commitment to the UNGPs, as expressed by AICHR, and the public commitments of the four member-states mentioned above are welcome developments. These can be used to push forward initiatives in the region, and to advance solutions and policies that address businesslinked human rights concerns. With ever-increasing intraASEAN trade, and with ASEAN positioning itself as a major

Report. http://chr.gov.ph/wp-content/uploads/2018/01/CHR-2015Annual-Accomplishment-Report.pdf. 11 Hanns Seidel Stiftung. 2017. PHRC holds 1st Core Groupo DiscussionWorkshop for NAP BHR. https://southeastasia.hss.de/news/detail/phrcholds-1st-core-group-discussion-workshop-for-pnap-bhr-news1064/. 12 National News Bureau of Thailand, PM affirms commitments to UN Guiding Principles on Business and Human Rights, Published at https:// business-humanrights.org/en/thailand-as-govt-affirms-commitmentto-guiding-principles-on-business-human-rights-groups-raiseconcerns-about-continued-abuses-including-threats-against-rightsdefenders, 06 June 2017. 13 Danish Institute for Human Rights, National Action Plans on Business and Human Rights (Thailand, https://globalnaps.org/country/thailand/ (accessed on 20 February 2018).

NAPS on BHR in the ASEAN

investment hub, policies and practices must be introduced among states and businesses that will protect and promote human rights, and provide remedies for victims of rights abuses.

3 Observations on the procedural aspects of NAP development in the ASEAN States pave their own paths towards NAP development. While the UNWG on BHR normally recommends developing stand-alone NAPs on BHR, it also recognizes the fact that in some states, other approaches may prove to be more effective. Examples include the integration of the NAP on BHR process to the development of a more general NAP on human rights, or the integration of policies that address business-linked abuses in the various initiatives of government. In ASEAN, approaches vary. This section includes our observations and lessons learned from the processes in Indonesia, Malaysia, Thailand, and the Philippines, and looks at four critical procedural aspects in the development of NAPs: 1. Seeking a formal commitment from government to engage in the NAP process, and designating leadership 2. Creating a format for cross-department collaboration within government 3. Establishing platforms of engagement and consultations with various stakeholders and providing resources for the process 4. Arriving at agreements on what to do with the outcome of consultations

3.1 Seeking a formal commitment from government to engage in the NAP process, and designating leadership The UNWG on BHR recommends that stakeholders seek a formal commitment from governments before engaging in the NAP process. For countries that have developed or are

Business and Human Rights in the ASEAN

developing NAPs, this commitment has been expressed verbally by some government officials or through official issuances. Securing a formal commitment is important to ensure that the outcomes of the process, including policy recommendations, will be supported and implemented— with responsibilities assigned to the government itself, the private sector, and civil society. Committed government leadership and a clear buy-in on the process are critical in bringing the private sector and civil society together, and ensuring that various sectors of government will cooperate in both the development and implementation stages is similarly critical.

Indonesia Indonesia’s NAP development is led by its national human rights institution, Komnas HAM, which recommended the development of a NAP to the government primarily because the country’s National Human Rights Action Plan for 2014–2019 still did not reflect the UNGPs. Civil society support and monitoring were consistent and strong when Komnas HAM was developing the NAP. For example, the Institute for Policy Research and Advocacy (ELSAM) worked closely with Komnas HAM to strategize ways to build momentum and gather political support for the NAP.14 Support for consultations and dialogues on the NAP and related matters was also extended by Human Rights Resource Centre and the Investment and Human Rights Project of the School of Economics and Political Science.15 The early support helped moved the process forward and encouraged significant participation from various stakeholders. After a series of consultations, Komnas HAM launched the NAP16 in June 2017 (Komnas HAM Regulation No. 1). While there was government commitment to develop a NAP, it appeared that the ministries did not initially agree on the framework of implementation. In September 2017, three

14 Saldarriaga A. and A. Shemberg. 2015. Implementation of the state duty to protect human rights in the context of investment policymaking. Laboratory for Advanced Research on the Global Economy, Investment and Human Rights Project. http://blogs.lse.ac.uk/investment-andhuman-rights/files/2016/04/Final-Indonesia-Report-Back-10-11November-2016.pdf. 15 Id. 16 Komnas Ham and ELSAM. 2017. National Action Plan on Business and Human Rights. https://globalnaps.org/wp-content/uploads/2017/11/ nap-indonesia.pdf.

NAPS on BHR in the ASEAN

proposals were presented for discussion, namely: 1. That the NAP on BHR be integrated with the existing National Action Plan on Human Rights (RAN HAM); and/or 2. That the NAP on BHR be transformed from a Komnas HAM regulation to a presidential regulation; or 3. That the recommendations in the NAP on BHR be included in the strategies and initiatives of various ministries tasked to regulate the intersection of business and human rights concerns in the country. In November 2017, Indonesia’s government representative to the UN Annual Forum on Business and Human Rights in Geneva announced that the country will be developing a national guideline on business and human rights—to be released in 2018. Pursuant to this, a focal person was assigned from the Ministry of Economic Affairs to spearhead the efforts. When the BHRRC asked what this would mean for the NAP developed by Komnas HAM, the representative from the Indonesian government said that it will be taken into consideration as the national guidelines are developed.

Malaysia As early as 2010, SUHAKAM was already studying issues related to BHR. It found out that there is a “lack of awareness and recognition of the role and obligation of business entities to ensure that their operations do not in any way lead to human rights abuses”17 (p. 1). Because of this, SUHAKAM recommended for the government to formulate a NAP on BHR in order to, among others, “create awareness on areas of business and human rights.”18 After SUHAKAM released the strategic framework for a NAP on BHR, the government made a public statement and recognized this document as an important step towards the development of the NAP on BHR.19 The statement was made through Datuk Paul Low Seng Kuan, a minister in the Prime Minister’s department in charge of governance, integrity, and human rights.

17 Id. 18 Id. 19 The Rakyat Post. 2015. National Action Plan on Business and Human Rights to be drafted. Accessed on February 13, 2018 http://www. therakyatpost.com/news/2015/03/24/national-action-plan-onbusiness-and-human-rights-to-be-drafted/.

Business and Human Rights in the ASEAN

Although Malaysia’s efforts to develop a NAP has been temporarily stalled, SUHAKAM Commissioner A. Bidin emphasized that the country continues to work on human rights issues using the UNGP as a framework,20 with the hope of developing its NAP in the next two years.

Philippines In the Philippines, the PHRC is leading the effort to develop a NAP on BHR. However, there is no clear commitment yet to move towards actual NAP development. As of writing, the PHRC is finalizing an administrative order (AO) that outlines the responsibilities of various government ministries in relation to NAP development. This AO will be signed by the President and, once signed, it will be the document that sets forth the mandate of concerned agencies, and triggers the official start of the NAP development process. Even if the NAP process is temporarily stalled because of the unsigned AO, Civil Society Orgranizations (CSOs) and university-attached centers in the country continue to organize alliance-building activities to gain more support and build capacity in engaging with the process of developing a NAP.21

Thailand For Thailand, the lead office for the development of a NAP on BHR is the Rights and Liberties Protection Department of the Ministry of Justice. This office is mandated to implement the Thai government’s commitments to the accepted recommendations in its second Universal Periodic Review (UPR) at the UN Human Rights Council. Based on this UPR, Thailand accepted Sweden’s recommendation for the country to develop, enact, and implement a NAP on BHR. Alongside the Rights and Liberties Protection Department of the Ministry of Justice, CSOs that build the Thai CSOs

20 This was part of her intervention during the UN Forum on Business and Human Rights in Geneva, for the session entitled Moving Forward with NAPs and Implementing Pillar III in Southeast Asia (29 November 2017). 21 Some notable and active players in the development of a Philippine NAP are the Initiatives for Dialogue and Empowerment through Alternative Legal Services, Women’s Legal and Human Rights Bureau, and the University of the Philippines Law Center Institute of Human Rights.

NAPS on BHR in the ASEAN

Coalition for the UPR, together with a new Asian regional organization, Manushya Foundation, are now actively participating in the consultations and preparation of national baseline assessments for NAP development. The Thai government, through its Prime Minister, has publicly declared support to the NAP process. This is an opportunity for Thailand to immediately implement NAP recommendations as soon as the action plan is completed.

3.2 Creating a format for crossdepartmental collaboration within government The UNWG recommends that once the government or the lead ministry has committed to engage in a NAP process, it should also ensure that there is an established format for cross-departmental collaboration because this is â&#x20AC;&#x153;crucial for the coherent implementation of specific actions and the NAP as a whole.â&#x20AC;?22 This collaboration begins once the mandate to develop a NAP is given, and will continue until the NAP is implemented and then reviewed. NAP implementation rests on the operationalization of the recommendations through changes in law and policies established by different ministries and offices in the government. However, a NAP is rendered useless if cross-departmental collaboration is weak or totally nonexistent. For example, when the UK NAP was developed, some stakeholders criticized the process and did not view the NAP as an operational working document because it provided limited information about the roles and responsibilities of other departments in government or a timeline and procedure for the implementation of the recommendations.23 However, it must be noted that cross-departmental collaboration often does not exist or is not strong enough to push reforms forward. For instance, because NAP is a human rights document, other departments/ministries would not have the legal mandate to participate in the process or even the inclination to engage in a process that is traditionally viewed as outside their jurisdiction. It could also be because there is an optimistic belief that once the 22 Ibid. See note 1.. 23 Scabin, F, et al. n.d. Preliminary essay on National Action Plans on Business and Human Rights and Recommendations to Brazil. https:// direitosp.fgv.br/sites/direitosp.fgv.br/files/arquivos/gdhee_ embaixada_do_uk_no_brasil_paper_en.pdf..

ILLUSTRATING THE NEED FOR CROSS-DEPARTMENTAL COLLABORATION ON THE NAP Let us consider this scenario: the NAP identifies as a major issue the displacement of indigenous peoples from their land without free, prior, informed consent and/or adequate compensation. Here, relevant departments have different roles to play in addressing the problem through the proper implementation of existing laws or development of new laws altogether. For this kind of issue, the following departments/offices may have to be involved: legislative, land ministry, indigenous peoplesâ&#x20AC;&#x2122; ministry/commissions, investment regulatory offices of government, and such other ministries. To provide another example, the NAP can recommend creation of laws that will disclose beneficial ownership of extractive industry companies to ensure that when violations are committed, accountability can be demanded for all those who control and own the business. This law might require intensive collaboration between ministries/departments involved with the registration of corporations, privacy commissions, tax bureaus, and those involved in activities involving the environment, energy, and local/regional governments, among many others.

Business and Human Rights in the ASEAN

NAP is finished and adopted by the highest officer of the land, the necessary mandate will also be released, so that all government and nongovernmental stakeholders can participate in the implementation of NAP recommendations. Among ASEAN member-states that are developing a NAP, only Thailand has formalized cross-departmental collaboration by creating a national committee to work on the NAP. Various stakeholders have also signed a memorandum of cooperation to implement the UNGPs, such as the National Human Rights Committee, the Ministry of Justice, the Ministry of Foreign Affairs, the Ministry of Commerce, Federation of Thai Industries, the Thai Bankers Association, the Thai Chamber of Commerce, and the Global Computing Network of Thailand. Thailand has a clear opportunity to respond to the necessity of bringing in all ministries together, not just the three that have signed the memorandum of cooperation. It must also clarify the roles and responsibilities of each government ministry or office in the development of the NAP and in its implementation and review. Indonesiaâ&#x20AC;&#x2122;s case highlights the need for crossdepartmental collaboration. Despite having already launched its NAP, Komnas HAM continues to have difficulty in coordinating with various ministries regarding recommendations that are related to their duties and functions. Another challenge is the fact that regional governments in Indonesia exercise local autonomy and, without a clear agreement to implement the NAP, Komnas HAM can do very little to ensure its implementation in the regions. With the announcement that Indonesia will be creating a national guideline on BHR, which will take note of the NAP launched by Komnas HAM, stakeholders should encourage government to now establish a clear system of collaboration among government ministries/departments to avoid duplicating or wasting efforts.

3.3 Establishing platforms of engagement and consultations with various stakeholders Engagement with nongovernmental stakeholders is critical in the NAP process, and establishing a format of engagement is key. Because the development of the NAP

NAPS on BHR in the ASEAN

has not formally started in Malaysia and in the Philippines, engagement and consultation processes have not been formally established. In Indonesia, consultations were made possible through the combined efforts of ELSAM, Komnas HAM, and the Business and Human Rights Working Group (BHRWG).24 The BHRWG aims to: (1) enhance the UNGPs into corporate values and (2) actively contribute in drafting the NAP on BHR.25 It became another platform for dialogue and consultation between CSOs and private companies, where they discussed initiatives and lessons learned from the implementation of the UNGPs. The working group also co-organized several learning sessions with businesses and/or civil society to build capacity on UNGP implementation and to gather useful insights for NAP development.

Figure 1. Consultation structure for the policy paper on BHR and the NAP process in Indonesia

BHRWG

CORPORATION

(GOVERNMENT AND PRIVATE) ACADEMIANS

CIVIL SOCIETY ORGANIZATION

POLICY PAPER ON BUSINESS AND HUMAN RIGHTS

CHILD GROUPS

24 The BHRWG is an initiative of the Indonesia Global Compact Network, which is a multi-stakeholder entity composed of representatives from the private sector, CSOs, and the academe. 25 PT Rajawali Corpora. 2016. Communication on Progress. https://www. unglobalcompact.org/system/attachments/cop_2017/386121/original/ COP_Report_2016_to_2017_-_Rajawali_Corpora.pdf?1495422001..

MINISTRY/ AGENCY

Business and Human Rights in the ASEAN

The results of the engagements with various stakeholders helped shape a policy paper on business and human rights, which, in turn, influenced the design of Indonesiaâ&#x20AC;&#x2122;s NAP. As shown in Figure 1, various stakeholders contributed to the policy paper on BHR, and this document contributed to and influenced the countryâ&#x20AC;&#x2122;s NAP process. For Thailand, the platform to engage civil society and communities is through the organizations that form part of the Thai CSOs Coalition for the UPR. Working closely with the Ministry of Justice on the NAP, the format of engagement is clear and the obligations of the participating groups are well-established. CSOs and community organizations are tasked to create a National Baseline Assessment on BHR and propose policy recommendations for the development of the NAP. Likewise, they are currently conducting documentation missions and developing research papers that will form part of the baseline assessment. The structure of the baseline assessment has been agreed upon by CSOs and the Ministry of Justice. Working together, sub-regional multi-stakeholder dialogues are now being conducted across Thailand to gather more data for the assessment. Manushya Foundation acts as a convener to ensure that initiatives are on schedule, consultative, and responsive to the objectives agreed upon at the start of the NAP process. However, it remains to be seen how the government intends to proceed with the consultation of the business sector. There is also a need to establish guidelines for businesses, government, and CSOs to come together, engage with each other, and give feedback on the process and substance of the NAP, including each otherâ&#x20AC;&#x2122;s recommendations. In its early stages, the Thai NAP process already exhibits a promising degree of structure and collaboration, and there is plenty of room for them to ensure multi-stakeholder engagement and consultation in all phases of the NAP process.

3.4 Arriving at agreements on what to do with the outcome of consultations NAP consultations require time and resources. As more stakeholders participate and contribute, the credibility of the process is enhanced.

NAPS on BHR in the ASEAN

Groups and individuals consulted will expect that their inputs be considered and implemented. It is thus important for government and other stakeholders to come to an agreement on what to do with the outcome of consultations at the onset of the NAP process. During the first meeting of the Experts Advisory Group under the Thai process, the Ministry of Justice, through a representative, assured stakeholders that the national baseline assessments conducted by CSOs and community organizations will form the basis of the NAP. This can be considered as a concrete manifestation of the government’s commitment to make the NAP process inclusive and responsive to the human rights situation of affected communities. It also encourages stakeholders, especially the marginalized, to continue participating in the development of the NAP because it sends the message that they will be heard.

It is important for government and other stakeholders to come to an agreement on what to do with the outcome of consultations at the onset of the NAP process.

4 Recommendations The development of NAPs usually calls for a long and complicated process. Stakeholders must be fully aware of the importance of establishing credible and inclusive steps, so that the substance of the final plan is acceptable and— more importantly—responsive to the human rights needs and challenges of each country. For ASEAN member-states, the following recommendations are forwarded: 1. States should strive to get the commitment of the highest-ranking officials in the country, who have control and/or supervision over various ministries and local or regional governments that will eventually implement the action plans to engage in the NAP process. 2. It is also important to get commitments on the needed technical and financial resources. Resources are needed to conduct comprehensive and inclusive consultation meetings, develop evidence-based research to assess the BHR conditions in the country, and prepare the final national action plan. In instances where government budget has not been sufficient to support the entire process, some states have turned to agreements with donors that can provide the necessary technical and financial resources, while ensuring that the states maintain complete independence through the process.

COMMITMENT OF HIGHESTRANKING OFFICIALS IN THE COUNTRY Thailand’s NAP process benefits from the support of the Prime Minister and the various ministries that have signified their commitment and cooperation to the process. The Philippine NAP, while temporarily stalled, will also benefit greatly if the proposed AO will be signed by the country’s president.

Business and Human Rights in the ASEAN

COMMITMENT ON NEEDED TECHNICAL AND FINANCIAL RESOURCES The Office also extended financial support for the development of Malaysia’s Strategic Framework on a NAP on BHR.In Thailand, the UK Foreign and Commonwealth Office supports consultation sessions, as well as the first meeting of the Experts Advisory Group on the NAP process. The Office also extended financial support for the development of Malaysia’s Strategic Framework on a NAP on BHR.

In terms of technical resources, countries may consider referring to the NAPs of other states. Recently, the Danish Institute for Human Rights launched a comprehensive portal26 on NAPs around the world. The site was developed in collaboration with International Corporate Accountability Roundtable (ICAR), which also regularly releases its assessment of existing NAPs—the latest27 of which in August 2017. ICAR also published a toolkit for the development, implementation, and review of state commitments to BHR frameworks.28 The Thai NAP process uses ICAR’s National Baseline Assessment template. The BHRRC also has a dedicated web page29 on NAPs, where it publishes latest news, commentaries, and other resources on the subject. Available in 12 languages, its Documentation Checklist30 is also currently being used by groups participating in the Thai NAP process to document the human rights impacts of businesses in Thailand, and its output will form part of the National Baseline Assessment. 3. If the state is inactive or disinterested to engage in the process of developing a NAP on BHR, CSOs should exert effort and pressure in order to encourage their government to start the process. CSOs should also explore the possibility of engaging with businesses that are leading in efforts to integrate human rights in their operations, and make them allies and partners to encourage the government to develop a NAP. 4. States developing their NAPs will benefit greatly if

26 See https://globalnaps.org/about/. 27 See Assessments of Existing National Action Plans (NAPs) on Business and Human Rights. International Corporate Accountability Roundtable. 2017. https://www.icar.ngo/publications/2017/8/23/assessments-ofexisting-national-action-plans-naps-on-business-and-human-rightsaugust-2017. 28 International Corporate Accountability Roundtable. 2017. National Action Plans on Business and Human Rights: A Toolkit for the Development, Implementation, and Review of State Commitments to Business and Human Rights Frameworks https://www.icar.ngo/ publications/2017/1/4/national-action-plans-on-business-andhuman-rights-a-toolkit-for-the-development-implementation-andreview-of-state-commitments-to-business-and-human-rightsframeworks. 29 See https://www.business-humanrights.org/en/un-guiding-principles/ implementation-tools-examples/implementation-by-governments/bytype-of-initiative/national-action-plans. 30 See https://www.business-humanrights.org/en/checklistdocumenting-corporate-human-rights-impacts.

NAPS on BHR in the ASEAN

they begin the process by clarifying a leadership structure. While it is expected that the countryâ&#x20AC;&#x2122;s national human rights institution will lead the efforts, states also have the option to consider other ministries as lead institutions. A clear leadership structure with commitments from participating government bodies ensures clarity on which agency is responsible not only for the planning process but also for implementation. States must establish mechanisms that will prevent situations wherein multiple ministries or departments are engaged in similar efforts but are not coordinating. Duplication of processes is inefficient, and it diverts vital resources from important activities. 5. Despite the designation of one ministry/office as the lead agency for NAP development, states must nevertheless maximize existing networks of various ministries to conduct consultations with sectors covered by their mandate. This not only maximizes available time and financial resources but also speeds up the process, considering that the businesses concerned are already known to and are already engaging with the ministries that have jurisdiction over their operations. 6. NAP processes usually involve ministries from the executive branch of government. This is true for Thailand, Indonesia, and the Philippines. States may benefit greatly if the NAP process also involves representatives from other branches of the governments because some recommendations to address certain abuses may require policy and procedural reforms that can only be developed by these branches of government. For states that grant local autonomy to its local and/or regional governments, it would also be useful to include representatives from these local governments. This ensures early commitments to both the process and the evolving recommendations that will arise from it. 7. States must strive to establish mechanisms that will ensure inclusive and effective consultations with stakeholders. Among others reasons, online and offline mechanisms should be developed to: (1) educate stakeholders on the object and purpose of the NAP; (2) accept inputs and recommendations; and (3) publicly disseminate the NAP work plan, so that a broader range of concerned stakeholders are able to follow, monitor, and participate in relevant consultations and processes.

CLARIFYING LEADERSHIP STRUCTURE Thailand has chosen its Ministry of Justice, while the Philippines has placed the responsibility on the PHCR, which is under the Office of the President, instead of the Commission on Human Rights.

MAXIMIZING EXISTING NETWORKS For example, the agriculture ministry can conduct consultations with farmers and smallholders, and the environment ministry can consult communities where extractive, logging, and other similar industries operate.

Business and Human Rights in the ASEAN

AGREEING ON TERMS OF REFERENCE In the Thai process, the government committed to ensure that the research and documentation from CSOs will form part of the National Baseline Assessment of the NAP.

Strong commitments to develop and implement NAPs will help ensure that the economic growth of the ASEAN and its member-states does not cost the region the rights of its people, especially the most vulnerable.

8. States and stakeholders participating in the development of a NAP must begin the process by agreeing on terms of reference. Parties must agree on priority issues and/or priority sectors. They must also agree on what to do with the outcome of consultations to build and sustain the credibility of the process. If people misunderstand the purpose of developing a NAP, and if expectations are not addressed, it risks the possibility of vital stakeholders losing interest and withdrawing participation. Governments must also anticipate the probability that stakeholders will participate in the NAP process to seek redress for specific business-linked human rights abuses. Government must not dismiss these allegations/reports and, instead, use the engagement to work with stakeholders towards possible remedies, while shaping national policy and strategy. Being dismissive of actual allegations of abuse could lead to diminished trust among stakeholders in the process. The development of a NAP on BHR is an opportunity for states to convene various stakeholders from businesses and civil society to engage in continuous dialogue and consultations on human rights issues. It is an opportunity to establish policies that will prevent abuse and clarify the roles and responsibilities of various state and non-state actors with respect to human rights impacts of business and, more importantly, establish and improve mechanisms to provide remedies that are appropriate and effective for victims/survivors of abuse. Strong commitments to develop and implement NAPs will help ensure that the economic growth of the ASEAN and its member-states does not cost the region the rights of its people, especially the most vulnerable.

Promoting Responsible & Inclusive Agriculture Investments

PROMOTING RESPONSIBLE AND INCLUSIVE AGRICULTURE INVESTMENTS THROUGH ASEAN TRADE AND INVESTMENT AGREEMENTS: Opportunities and challenges Business & Human Rights Resource Centre

Business and Human Rights in the ASEAN

1 Introduction and context

Responsible and inclusive agricultural investments must promote and protect everyone’s rights, regardless of differences in race, gender, or economic status.

Responsible and inclusive agriculture investments are established, promoted, and protected through a combination of effective policies and practices implemented by the public and private sector. These policies and practices must be supported by domestic and international legal frameworks that assure, among other things, the promotion and protection of human rights and access to effective remedies for victims of abuse, regardless of differences in race, gender, or economic status. However, in the past decade, states have witnessed the surge in international trade and/or investment agreements (TIAs) that have presented both tremendous opportunities for growth and critical challenges to the policy-making space of many states. Reports of countries planning to terminate or withdraw from their investment agreements with other states have attracted closer attention to these international pacts. Sometime in 2014, Indonesia announced that it was planning to terminate more than 60 of its bilateral investment treaties (BITs) because of increasing threats made by companies accessing investorstate dispute settlement mechanisms to challenge Indonesia’s domestic policies.1 This year, Ecuador also unilaterally withdrew from 16 BITs, completing the termination of a total of 26 agreements signed by the country since 1968.2 Ecuador explains that this is an ongoing process, aimed at complying with the 2008 constitution, “which recognises the human being and human rights above the power of economic capital.”3 Ecuador’s BITs have caused the country USD 1.498 billion in compensation claims—an amount equivalent to 31 per cent of the country’s total education spending or 62 per cent of its health-related expenditures.4 This briefing paper analyses ASEAN TIAs and their potential effects on the ability of states to implement policies that promote responsible and inclusive agriculture investments 1 Bland B. and S. Donnan. 2014. Indonesia to terminate more than 60 bilateral investment treaties. Financial Times. 26 March 2014. 2 Uribe, D. 2017. Ecuador withdraws from its remaining investment treaties. ALAI. 24 May 2017. 3 Id. 4 Id.

Promoting Responsible & Inclusive Agriculture Investments

in the region. It looks at some of the recommendations outlined in the Principles for Responsible Investment in Agriculture and Food Systems,5 and presents the challenges and opportunities that TIAs pose with the implementation of these proposals. To achieve these objectives, ASEAN’s agreements with Australia/New Zealand, China, India, Japan, and Korea, and the ASEAN Comprehensive Investment Agreement (ACIA) were reviewed. Japan’s bilateral agreements with some ASEAN memberstates are also referred to in this briefing paper because these agreements provide greater investment protections than the ASEAN-Japan agreement, and countries are highly likely to take advantage of these protections through the “most favoured nation” clauses in their respective agreements with Japan. The significance of continuously reviewing TIAs’ impact on agriculture policies in ASEAN cannot be overstated because the agriculture sector remains to be a significant driver of growth for ASEAN member-states. A report published in 2017 states that agriculture contributes approximately 25 per cent of ASEAN’s total gross domestic product, and about 25 per cent of the total employment in the region.6 Moreover, foreign direct investments (FDI) in agriculture are increasing; in 2012, they were valued at USD 1.7 billion, but as of 2015, they already totaled to USD 4.8 billion (a 62.1% increase).7 These FDIs in agriculture are regulated both by domestic policies and international agreements; hence, there is a need to ensure that domestic policies aimed at growing the sector and benefitting the people are not unnecessarily put at risk for being inconsistent with obligations created by international TIAs. This briefing paper focuses on three key issues: (1) food security, (2) inclusive development, and (3) land rights. Because recommendations for responsible and inclusive agriculture investments are rooted in human rights obligations and norms, this paper also concludes by making a case for the integration of human rights norms and obligations into international TIAs.

5 Prepared by the Committee on World Food Security. 6 F. Astriana, A.L. Tobing, and A. Chandra. 2017. Agriculture in ASEAN- Trade and Investment Guidebook. Jakarta, Indonesia: ASEAN Studies Program. 7 Id.

TIAs’ impact on agriculture policies in ASEAN cannot be overstated because the agriculture sector remains to be a significant driver of growth for ASEAN memberstates.

Business and Human Rights in the ASEAN

2 Implications of trade and investment agreements on food security, labour rights, and land governance 2.1 Food security

Food security is threatened around the world, and people’s access to food is affected by a combination of factors including climate, policies, and politics.

The Principles for Responsible Investment in Agriculture and Food Systems8 recognizes the role of agriculture investments in ensuring food security. It states that responsible investments in agriculture and food systems must contribute to the realization of the right to adequate food in the context of national security, including the improvement of people’s ability to produce food for oneself and others. It also envisions a functioning market system characterized by fairness, transparency, and efficiency. There are many definitions to food security but for the purposes of this handbook, the definition from the State of Food Insecurity 2001 (FAO, p.313) will be used: “Food security is a situation that exists when all people, at all times, have physical, social, and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.”9

Food security is threatened around the world, and people’s access to food is affected by a combination of factors including climate, policies, and politics. The 2017 report The State of Food Security and Nutrition in the World: Building Resilience for Peace and Food Security notes that after a period of steady decline, the number of chronically undernourished people in the world is estimated to have increased to 815 million.10 This trend is illustrated below: 8 Committee on World Food Security. 2014. Principles for Responsible Investment in Agriculture and Food Systems. Rome: FAO. http://www.fao. org/fileadmin/templates/cfs/Docs1314/rai/CFS_Principles_Oct_2014_ EN.pdf. 9 Food and Agriculture Organization (FAO). 2003. Trade reforms and food security: Conceptualizing the linkages. Rome, Italy. 10 Food and Agriculture Organization of the United Nations (FAO), International Fund for Agricultural Development (IFAD), the United Nations Children’s Fund (UNICEF), World Food Programme (WFP), and World Health Organization (WHO). 2017. The state of food security and nutrition in

Promoting Responsible & Inclusive Agriculture Investments

Figure 1. Prevalance and number of undernourished people in the world, 2000-2016 21.6%

1440 M

19.2%

1200 M

16.8%

926

900

960 M 794.6

14.4%

775.4

777

815

14.2

14.7

720 M

12%

11.5 10.8

10.6

480 M

240 M

9.6% 2000

2004

2008

2012

2016

Number of people undernourished (right axis) Prevalence of undernourishment (left axis) NOTE: Figures for 2016 are projected estimates. SOURCE: FAO.

According to the same report, the food security situation became more acute in parts of Sub-Saharan Africa and South Eastern and Western Asia—citing conflicts further complicated by climate-related conditions as contributors to the worsening of conditions. Foreign investments in agriculture, even when these are substantial, do not always help alleviate the food security situation. Host states and their citizens may assume that these foreign investments will provide food for the country, but there are also cases where foreign investors end up exporting a majority, if not all, of the agricultural products that they produce to their home state11 or to some other state that is identified as a profitable market for agricultural goods. This situation is captured in a 2014 observation of Global Citizen, which noted that 98 per cent of the 870 million people who belong to the “hungry” index live in “countries that perversely produce most of the world’s food stocks.”12

the world: Building resilience for peace and food security. Geneva, Switzerland: WHO. 11 Mills, E. 2015. Chinese agricultural and land investments in Southeast Asia: A preliminary overview of trends. Paper presented at the International Academic Conference, 5–6 June 2015, Chiang Mai University. https://www.iss.nl/fileadmin/ASSETS/iss/Research_and_ projects/Research_networks/LDPI/CMCP_70-Mills.pdf. 12 Guy-Allen, C. 2014. The world’s 10 hungriest countries. Global Citizen.

Foreign investments in agriculture, even when these are substantial, do not always help alleviate the food security situation.

Business and Human Rights in the ASEAN

Countries have responded to food shortages and price shocks in various ways, such as imposing export restrictions and/or export taxes, or even imposing export bans on food. During the 2006–2008 food crisis, the following countries implemented these restrictions: Bangladesh, Brazil, Cambodia, China, Egypt, India, Madagascar, Nepal, Thailand, and Vietnam for rice, and Argentina, India, Kazakhstan, Nepal, and Pakistan for wheat.13 When China, Indonesia, and India imposed restrictions, they temporarily but successfully protected their own people from escalating world market prices. Generally, export restrictions are not allowed and members of the World Trade Organization (WTO) are bound by Article XI (1) of the General Agreement on Tariffs and Trade (GATT), which states: “No prohibitions or restrictions other than duties, taxes, or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.”

GATT provides very limited exceptions and allows temporary bans/restrictions on exports to prevent and relieve critical shortages of foodstuffs or other products essential to the exporting contracting party (Article XI [2]). However, it is difficult to invoke this exception because terms such as “temporary,” “critical,” and “essential” are not defined in the agreement, and the WTO case law has not provided clarifications on the interpretation of these ambiguous terms.14 These problems were not eliminated in ASEAN TIAs because these also all refer to GATT prohibitions on export and import restrictions. https://www.globalcitizen.org/en/content/the-worlds-10-hungriestcountries/. 13 Bouet, A. and D. Laborde. 2012. Export taxation in the context of food crisis. Food Security Portal. http://www.foodsecurityportal.org/exporttaxation-context-food-crisis. 14 Korinek, J. and J. Bartos. 2012. Multilateralising regionalism: Disciplines on export restrictions in regional trade. OECD Trade Policy Working Paper No. 139. Paris, France: OECD. http://www.oecd.org/officialdocuments/ publicdisplaydocumentpdf/?cote=TAD/TC/WP(2011)23/ FINAL&docLanguage=En.

Promoting Responsible & Inclusive Agriculture Investments

The proposals here are made with the clear qualification that flexibilities be extended to countries that are facing serious food security concerns and not to large exporting countries that often use export restrictions to control supply and eventually drive up prices of food products. To remedy this situation, ASEAN member-states should consider the following: 1. ASEAN member-states should consider taking the lead in reversing the international regime on export and import restrictions to create different rules to apply for food-secure and food-insecure nations. Food-insecure states should have the flexibility to negotiate for default restrictions that allow them to require both domestic and foreign investors to retain a portion of their agriculture produce in the territory of host states, which, in turn, ensures that the food security needs of its people are addressed. Realistically, each ASEAN memberstate can negotiate for flexibilities in their existing and future TIAs. This is being done now. Ideally, ASEAN itself should start reassessing its regional agreements to make sure that export/import restrictions imposed on foreign investors are not absolutely prohibited, as they are prohibited in the TIA of the Philippines and Indonesia with Japan.15 2. ASEAN member-states should use future negotiations of new TIAs or modifications of existing ones as opportunities to expand the exceptions to the export and import restriction prohibitions. This gives states flexibility in facing shortages or price shocks to address food security concerns. Flexibilities are useful if applied temporarily and together with other policy interventions, such as extending direct support to farmers/producers of food products that are experiencing a shortage. If other countries wish to provide protections for its agriculture investors through TIAs, they should also allow host states to provide regulatory cushions for the benefit of its people. Future TIAs should clarify the meaning of “temporary” and “critical” in the exceptions to export/import prohibitions, so that it will be easy 15 See Article 93 of the Japan-Philippines Economic Partnership Agreement and Article 63 of the Japan-Indonesia Economic Partnership Agreement.

FLEXIBILITY TO IMPOSE EXPORT AND IMPORT RESTRICTIONS In ASEAN, there are countries that have restricted their ability to impose these kinds of measures. Indonesia and the Philippines, in their TIA with Japan, both agreed to prohibit imposing requirements for investors to “export a given level or percentage of goods and services” and—impliedly—to export only a certain amount to ensure that some are left for the domestic market.15 In their TIA with Japan, Malaysia and Thailand, on the other hand, have maintained their flexibility to impose export and import restrictions on foreign investors.

Business and Human Rights in the ASEAN

THE CASE OF THE CHILEEUROPEAN FREE TRADE AREA AGREEMENT16 Article 13 of the pact eliminates all import or export prohibitions or restrictions—whether these are made through quotas, import or export licenses, or other measures—and also prohibits the introduction of new measures. No exceptions are made, even for food security concerns like shortages or price surges for agriculture products. This is potentially disastrous for net food-importing countries that are constantly short on food supply.

THE JAPAN-PHILIPPINES ECONOMIC PARTNERSHIP AGREEMENT To illustrate, the JapanPhilippines Economic Partnership Agreement stipulates that the parties agree to give up their right to demand from investors of the other state “to hire a given level of nationals” in their businesses. It also prohibits the imposition of requirements to “transfer technology, a production process or other proprietary knowledge,” and “to appoint, as executives, managers or members of boards of directors, individual of a particular nationality.” This is an unnecessary and prejudicial surrender of policy space, especially for a country that suffers from high unemployment rates and significantly needs technology transfers to improve its industries and workforce. Notably, other ASEAN memberstates that negotiated similar agreements with Japan (i.e., Indonesia, Malaysia, and Thailand) did not agree to this restriction.

for net food-importing countries to invoke the exception provided by the rule. 3. ASEAN member-states should also ensure that future TIAs will not expand GATT obligations by prohibiting import and export restrictions, without any room for exceptions.16

2.2 Labour rights Like in food security, the Principles for Responsible Investment in Agriculture and Food Systems also recognises the role that agriculture investments play in achieving the goal of sustainable and inclusive economic development. According to the document, these investments must create new jobs and establish work environments that respect fundamental principles and rights at work, as well as support the effective implementation of international labour standards. States must require both domestic and foreign agriculture investors to help address employment challenges, especially when they are still in a developing state. One common domestic policy that address this matter is the requirement of allowing foreign workers only when there are no available local/national workers who are competent, able, and willing to do the work. This policy exists in the Philippines.17 Other restrictions include levies on the hiring of foreign workers, imposing an obligation on foreign investors to upgrade the skills of their employees, and limitations as to length of employment period.18 These restrictions may be vulnerable to challenge in light of more broad provisions in international TIAs. In the future, ASEAN member-states should ensure that TIAs do not severely affect their ability to require foreign investors to comply with requirements that benefit the local workforce. For example, TIAs should not prohibit states from requiring foreign investors to hire local workers; invest 16 See Chile-European Free Trade Area here: http://www.efta.int/media/ documents/legal-texts/free-trade-relations/chile/EFTA-Chile%20 Free%20Trade%20Agreement.pdf. 17 Article 40 of the Labor Code-Employment permit of non-resident aliens: “The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired.” 18 ASEAN. 2012 Employment of foreign workers. http://asean.org/?static_ post=employment-of-foreign-workers.

Promoting Responsible & Inclusive Agriculture Investments

in research, development, and technology/skills transfer to improve the local work force; and appoint locals to form part of the management and policy-setting bodies of businesses. This proposal is especially significant for the agriculture sector where local workers are available and in dire need of employment. ASEAN member-states must continue to resist this restriction if they want to use agriculture investments as a key driver of employment growth in their countries. The second glaring shortcoming of ASEAN TIAs is the lack of recognition of internationally recognised labour standards and International Labour Organization (ILO) conventions. There is room to consider the possibility of finally recognising labour standards in TIAs, especially because ASEAN member-states have ratified at least one of the core ILO conventions. The case of including labour standards in TIAs is compelling. ASEAN member-states should take note of the following points:19 Table 1. Labour provisions in ASEAN free trade agreements19

Country

Freedom of Association C087

C098

Forced Labour

Discrimination

C029

C100

C105

C111

Brunei Darussalam

Child Labour C138

C182

2011

2008

Cambodia

1999

1969

1999

2006

Indonesia

1998

1957

1950

1999

1958

1999

2000

1964

2008

2005

1957

1997

Lao PDR Malaysia Myanmar

1961 1955

Singapore

1965

1953

2995

1960

1953

Thailand

1969

1999

Vietnam

2007

1953

2000 2013

1965

Philippines

1997

1955 2002

1997

19 L. Engen. 2017. Labour provisions in Asia-Pacific free trade agreements. Bangkok, Thailand: UNESCAP. http://www.unescap.org/sites/default/ files/Background%20Material%20-%20Labour%20provisions%20in%20

1960 1997

2005

2001

1998

2000

2004

2001

2003

2000

Business and Human Rights in the ASEAN

1. The recognition of labour standards, especially with reference to ILO conventions, converts a TIA from merely an economic document to one that attempts to find the intersection of trade, investment, and human rights. It signals the country’s commitment to encourage investments without sacrificing labour rights. In addition, the Handbook on Assessment of Labour Provisions in Trade and Investment Agreements20 recently assessed the effectiveness of labour provisions in TIAs and presented several cases, including the following:

TIA DEVELOPMENTS IN THE UNITED STATES In early 2018, a promising development related to the TIAs of the United States was reported. Two bills were introduced in the US Senate to promote rights and human rights in developing countries that trade with the US. First, the Labor Rights for Development Act strengthens enforcement and oversight to ensure that the countries that are beneficiaries of the Generalized System of Preferences protect basic labour rights, including the rights to freedom of association, collective bargaining, minimum wage, hours of work, and occupational safety and health. Second, the Anti-Trafficking Trade Act would allow the US to deprive duty-free benefits under the GSP to countries that fall under Tier Three of the Department of State’s Trafficking in Persons report. If these laws are passed, the US would definitely integrate this in their future TIAs.

• Labour provisions in Chile’s TIAs have sustained political and social dialogues that have prevented disputes. For example, in 2003, Chilean workers were dismissed by a Canadian company but were subsequently reinstated after a joint action by a transnational coalition of union that sent a letter to the Canadian Minister and alleged violations of labour provisions in the Chile-Canada Agreement on Labour Cooperation. • Labour provisions in the Cambodia-United States Bilateral Textile Agreement (CUSBTA 1999)21 increased access to transparent and credible information from the garment sector. This was because the agreement linked export quota bonus to the requirement to improve working conditions, which, in turn, required intensive monitoring activities to get accurate information. Aside from increased transparency, it was also observed that the gender wage gap in the garment industry decreased. 2. If a state decides to suspend or terminate a foreign investment because of serious violations of labour rights, and the investor invokes protections offered by a trade or investment agreement, arbitral Asia-Pacific%20PTAs.pdf. 20 International Labour Organization. 2017. Handbook on assessment of labour provisions in trade and investment agreements. Geneva, Switzerland: ILO. http://www.ilo.org/wcmsp5/groups/public/--dgreports/---inst/documents/publication/wcms_564702.pdf. 21 Full text may be retrieved from the website of the U.S. Department of State, https://photos.state.gov/libraries/cambodia/231771/PDFs/ uskh_texttile.pdf.

Promoting Responsible & Inclusive Agriculture Investments

tribunals will be in the position to assess the protection of investments vis-à-vis the investor’s obligation to uphold and protect fundamental rights. 3. There are existing models to consider when integrating labour standards/ILO conventions in TIAs. While a one-size-fits-all model provision is unrealistic, ASEAN member-states can consider provisions that include: (1) reference to ILO instruments, (2) commitment to certain minimum labour standards, (3) not encourage trade or investment through weakening labour laws, (4) cooperation on labour issues, (5) creating specific institutions to manage labour provisions, and (6) consultation mechanisms in case of differences. Table 2 below may be used by negotiators from ASEAN member-states when they craft the labour provisions of future TIAs.

2.1 Land governance The Principles for Responsible Investment in Agriculture and Food Systems asserts that responsible investment in agriculture and food systems respects legitimate tenure rights. States must protect its policy space, so that it can introduce or modify policies that require businesses— domestic and foreign—to respect these rights. To put this principle in context, it has been observed that between 2000 and 2011, large-scale land deals covered an estimated 203 million hectares of land worldwide— equivalent to over eight times the size of the United Kingdom.22 Foreign companies also tend to invest in much larger pieces of land than their domestic counterparts— with most deals involving upwards of 10,000 hectares, and some even surpassing 500,000 hectares.23 The majority of foreign land investments are arguably not conducted in a sustainable or responsible manner, as the non-transparent, non-accountable character of most 22 Anseeuw, W. et al. 2012. Land rights and the rush for land. IIED/CIRAD/ International Land Coalition. http://www.landcoalition.org/cpl/CPLsynthesis-report. 23 Liu, P. 2014. Impacts of foreign agricultural investment on developing countries: Evidence from case studies. FAO Commodity and Trade Policy Research Working Paper No. 47. Rome: FAO.

THE CASE OF 31 BILATERAL AGREEMENTS BETWEEN THE PHILIPPINES AND CHINA An illustrative case would be the 31 bilateral agreements signed in 2007 by the then president of the Philippines and China’s prime minister involving, among others, 18 agribusiness deals that obligated the Philippines to offer more than one million hectares of agricultural land. Investors from China were granted access to lands above the limits established in the Philippine constitution. Eventually, these agreements were withdrawn after protests broke out, a legislative inquiry was instituted, and a Supreme Court case was filed.

Business and Human Rights in the ASEAN

Table 2. Labour provisions in trade agreements concluded by Asian countries and areas Name and Entry into Force of The Trade Agreements

Reference to ILO Instruments

Commitment to Certain Minimum Labour Standards

Not Encourage Trade or Investment through Weakening Labour Laws

Cooperation on Labour Issues

Specific Institutions

Consultation Mechanisms in Case of Differences

New ZealandThailand Trade Agreement *(2005)

1998 Declaration

YES

Labour Committee

YES

Chile-China Trade Agreement *(2006)

NO**

YES

TransPacific Partnership Agreement *(2006)****

1998 Declaration

YES

National contact points

YES

NO (but discussions of labour issues of mutual concern possible)

New ZealandChina Trade Agreement *(2008)

1998 Declaration

YES

NO (but senior official meetings)

JapanPhilippines Trade Agreement (2008)

YES

YES***

Taiwan, ChinaNicaragua Trade Agreement (2008)

YES

Labour Affairs Committee

YES

JapanSwitzerland Trade Agreement (2009)

YES

YES***

New ZealandChina Trade Agreement *(to enter into force in 2011)

1998 Declaration

YES

National contact points

YES

Promoting Responsible & Inclusive Agriculture Investments

deals fail to meet the criteria set forth by the UN Committee on World Food Security (CFS).24 Citizens of host states are often deprived of any relevant information regarding land deals entered into with foreign investors. When information about these deals becomes available or is leaked through less-than-legitimate channels, stakeholders are belatedly made aware of the vastness of the area of lands offered to foreign investors and the incentives extended to encourage agricultural investment. If strategically framed, TIAs give states the opportunity to control and supervise agriculture and land investments. However, the existing framework needs much improvement. For TIAs to promote responsible and inclusive agriculture investments, ASEAN member-states should consider the following: 1. ASEAN member-states should conduct human rights impact assessments (HRIA) before entering into TIAs and craft provisions that would allow states to require human rights impact assessments as a condition for investment, especially those that involve large tracts of land with existing residents and communities.25 Human rights impact assessments should be done on two levels: (1) before a country signs TIAs and (2) before accepting investments (i.e., as a condition for investors to engage in any investment activity in the host country). On the first point, Olivier De Shutter,26 Special Rapporteur on the Right to Food, explains why states must conduct HRIA before entering into TIAs: “By preparing human rights impact assessments prior to the conclusion of trade and investment

24 Mills, E. 2015. Chinese agricultural and land investments in Southeast Asia: A preliminary overview of trends. Accessed on 26 October 2017. https://www.iss.nl/fileadmin/ASSETS/iss/Research_and_projects/ Research_networks/LDPI/CMCP_70-Mills.pdf. 25 European Union. 2015. Guidelines on the analysis of human rights impacts in impact assessments for trade-related policy initiatives. http://trade.ec.europa.eu/doclib/docs/2015/july/tradoc_153591.pdf. 26 De Schutter, O. 2011. Guiding principles on human rights impact assessments of trade and investment agreements. New York: United Nations General Assembly. http://www.srfood.org/images/stories/pdf/ officialreports/20120306_hria_en.pdf.

EUROPEAN’S GUIDELINES ON ANALYZING HRIA For guidance, ASEAN memberstates may look into the European Union’s Guidelines on the analysis of human rights impacts in impact assessments for trade-related policy initiatives25 and craft guidelines that are appropriate to its circumstances.

Business and Human Rights in the ASEAN

agreements, States are addressing their obligations under the human rights treaties. First, since States are bound by these pre-existing treaty obligations, they are prohibited from concluding any agreements that would impose on them inconsistent obligations. Therefore, there is a duty to identify any potential inconsistency between pre-existing human rights treaties and subsequent trade or investment agreements, and to refrain from entering into such agreements where such inconsistencies are found to exist.â&#x20AC;?

2. ASEAN member-states must require both domestic and foreign investors to conduct HRIAs. This requirement should be met before any investor can be granted the necessary state permission to engage in any investment activity and, subsequently, as a condition for the continuation of its business. Domestic policy reform is required for this to be implemented, and nothing prevents the member-states from also elevating this requirement to become an international obligation under its TIAs. Right now, none of the ASEAN agreements reviewed for this paper requires investors to conduct HRIAs. Likewise, none of the agreements even refer explicitly to human rights. 3. ASEAN member-states should carefully craft the expropriation provision of its TIAs and exclude land-related and other agriculture-related policies, so that foreign investors cannot challenge them as a direct or indirect taking of its protected investments. ASEAN TIAs all have provisions on expropriationâ&#x20AC;&#x201D; covering both physical/direct taking of properties and indirect expropriations through the implementation of regulatory measures and grants compensation to investors for losses arising from these expropriations. The United Nations Conference on Trade and Development defines direct expropriation as

Promoting Responsible & Inclusive Agriculture Investments

the “mandatory legal transfer of the title of the property or its outright seizure.”27 Indirect expropriation includes measures—taken by a state—that interfere with property rights to an extent that these rights are rendered useless.28 It includes instances when a host country regulates a foreign investment in a manner that deprives the investor of control or substantial value of the investment, even in the absence of a physical appropriation.29 While land-dependent agriculture investments may benefit ASEAN member-states, the international legal regime must be flexible enough to allow states sufficient policy space to meet critical national objectives, including among other things, food security, protection of human rights (including the rights of workers, indigenous peoples, and women’s), and environmental sustainability. So far, there are no known treaty-based arbitration disputes that directly involve allegations of expropriations affecting agriculture or agribusiness disputes. However, states remain vulnerable to potential arbitration claims. For instance, in his report “Land Rights and Investment Treaties”, Lorenzo Catula enumerated several factors that contribute to this vulnerability, such as: “the very large number of deals signed in relatively short time—some 1,000 contracts worldwide since 2000; evidence suggesting that an unquantified but potentially significant share of large-scale land deals is protected by investment treaties; vocal calls to terminate or renegotiate the deals, or to improve their social, environmental and economic parameters, which could have adverse impacts on commercial operations.”30 27 United Nations Conference on Trade and Development (UNCTAD). 2000. Taking of property. New York and Geneva: UN. http://unctad.org/en/ docs/psiteiitd15.en.pdf. 28 Starrett Housing Corporation, Starrett Systems, Inc., Starrett Housing International, Inc. v. The Government of the Islamic Republic of Iran, Bank Markazi Iran, Bank Omran, Bank Mellat,, 16 Iran-US Claims Tribunal Rep. 112 (Award No. 314-24-1, 1987). 29 United Nations Conference on Trade and Development (UNCTAD). 2000. Taking of property. New York and Geneva: UN. 30 Catula, L. 2015. Land rights and investment treaties. IIED Land, Investment and Rights Series. London, United States: International Institute for Environment and Development. http://pubs.iied.org/ pdfs/12578IIED.pdf.

Business and Human Rights in the ASEAN

Some scholars cited an example on how countries can introduce flexibility into the expropriation provisions of their TIAs.31 Based on early drafts of the Trans-Pacific Partnership (TPP), for example, Brunei Darussalam, Malaysia, and Singapore made reservations in relation to land-based expropriations, and their early reservation would allow their governments â&#x20AC;&#x153;to determine the purpose, payment, and applicable laws when taking back land from foreign investors if they see a needâ&#x20AC;?â&#x20AC;&#x201D;all in accordance with their domestic laws. This gives less protection to investors and more flexibility to the host states because the main provision simply exempts expropriations if there is a public purpose. In the Brunei Darussalam/Malaysia/Singapore reservation, the state can expropriate regardless of the nature of purpose, private or public, for as long as it is in accordance with domestic law. Whether or not these provisions will find their way into the final text of the TPP or any other ASEAN TIA is something that needs to be monitored. It is monumental that states retain their policy space when it comes to land-related investments. ASEAN member-states may consider the possibility of putting a temporary halt to entering into agreements that allow for investor-state arbitrations. This was done in the Japan-Philippines Economic Partnership Agreement. Alternatively, on arbitrations, the international legal regime must be flexible enough to allow states to temporarily suspend arbitrations when human rights allegations are raised to challenge the validity of a foreign investment. Practically speaking, if this provision were to appear in a TIA, the arbitral tribunal would not be able to assume jurisdiction over the dispute before the resolution of the allegation of human rights violations in a domestic court or in a proper international human rights tribunal.

31 Thrasher, R., D. Bevilacqua, and J. Capaldo. 2015. Trade agreements and the land: Investment agreements and their potential impacts on land governance. Background Paper No. 15-01. Medford MA, USA: Global Development and Environment Institute. http://www.ase.tufts.edu/ gdae/pubs/wp/TradeAgreementsLand.pdf.

Promoting Responsible & Inclusive Agriculture Investments

Final note on the need to integrate human rights in trade and investment agreements Rooted on human rights principle, the document Principles for Responsible Investment in Agriculture and Food Systems (p. 3) recognizes that: “Responsible investment in agriculture and food systems is essential for enhancing food security and nutrition and supporting the progressive realization of the right to adequate food in the context of national food security. Responsible investment makes a significant contribution to enhancing sustainable livelihoods, in particular for smallholders, and members of marginalized and vulnerable groups, creating decent work for all agricultural and food workers, eradicating poverty, fostering social and gender equality, eliminating the worst forms of child labour, promoting social participation and inclusiveness, increasing economic growth, and therefore achieving sustainable development.”

However, TIAs have always been formulated and couched in a language that is devoid of references to human rights. Because of the belief that TIAs are economic documents, reference to human rights was avoided. This must change, and ongoing attempts to recognise and integrate human rights in these international agreements must be supported. Unfortunately, reference of human rights is not the standard in ASEAN agreements. None of the ASEAN agreements, including the ASEAN Comprehensive Investment Agreement, refer to human rights. This is unfortunate because as pointed out by various groups, “international investment can be a powerful engine for economic development and, potentially, to help fulfill a wide range of economic and social rights.”32 Like many 32 Human rights must be integrated into international investment

Business and Human Rights in the ASEAN

other international agreements, ASEAN TIAs reflect the current status of the international investment system— one that “gives rights to multinational corporations while doing nothing to protect the rights of people affected by foreign investment to access remedy.”33 The current system also “does not sufficiently protect government’s space to pursue sustainable development policies from investors’ challenges.”34

Responsible and inclusive investments in agriculture and food systems must be supported by domestic and international frameworks that protect states’ ability to craft policies that are effective and responsive to changing national conditions and the needs of people.

Recognizing and integrating fundamental human rights into international trade and investment regimes cannot be overstated. It is important because it sends a clear message of participating countries’ commitment to qualify investment protections and privileges granted to businesses with the corresponding responsibility to protect and promote human rights. In an Organisation for Economic Co-operation and Development report,35 Howard Mann cites the preambular paragraph of the European Free Trade AreaSingapore Agreement of 2002. This includes the clause “Reaffirming their commitment to the principles set out in the United Nations Charter and the Universal Declaration of Human Rights,” and cites the clause’s importance in “setting a tone for interpreting the obligations in the agreement and can have an impact on its application.” More importantly, there is a need to remember that there are no legal impediments to the recognition and integration of fundamental human rights in international TIAs. Responsible and inclusive investments in agriculture and food systems must be supported by domestic and international frameworks that protect states’ ability to craft policies that are effective and responsive to changing national conditions and the needs of people. With the surge of international TIAs being negotiated by ASEAN as a

agreements, November 2016. Statement signed by Business & Human Rights Resource Centre, Center for International Environmental Law, Centre for Human Rights in Practice, University of Warwick, European Coalition for Corporate Justice, International Federation for Human Rights (FIDH), International Corporate Accountability Roundtable, Institute for Policy Studies, Global Economy Project, Madhyam, Centre for Research on Multinational Corporations (SOMO), and Alfred de Zayas -UN Independent expert on the promotion of a democratic and equitable international order. 33 Id. 34 Id. 35 Mann, H. 2008. International investment agreements, business and human rights: Key issues and opportunities. OECD Global Forum on International Investment. Paris, France: OECD.

Promoting Responsible & Inclusive Agriculture Investments

regionâ&#x20AC;&#x201D;and bilaterally by each ASEAN member-stateâ&#x20AC;&#x201D;the review and development of negotiated positions must be done carefully and strategically in order to ensure that the policies established in relation to agriculture investments are those that promote responsible and inclusive investor behavior.

Business and Human Rights in the ASEAN

Rural Women and Human Rights

RURAL WOMEN AND HUMAN RIGHTS: Findings and recommendations from consultations in Cambodia1 Business & Human Rights Resource Centre

1 This report aims to present first-hand accounts on the human rights situation of rural women in Cambodia as manifested through their experience, knowledge, and beliefs, with the goal of supporting, reinforcing, and validating existing research and findings of other groups. It focuses on gender-related issues in the areas of land, agricultural investment, and supply chains. It also seeks to provide recommendations on key considerations for companies and governments, which hold the ability to shape or influence policies and practices in the country.

Business and Human Rights in the ASEAN

1 Introduction

Insecurity of land tenure is one of the most pressing issues affecting Cambodians today, particularly those from impoverished backgrounds in cities, rural people, indigenous communities, and women.

Cambodia is an emerging market that has seen remarkable growth over recent decades—thanks to increasing foreign investments coupled with the country’s innate abundance of natural resources. Large swathes of land have been granted to international, regional, and domestic investors for agro-industry, forestry, and large-scale infrastructure projects. However, this economic development has also led to environmental degradation and abuses on land rights, notably as a result of the Economic Land Concessions (ELCs) regime,2 especially on land occupied by indigenous peoples.3 Majority of Cambodians rely on land to sustain their livelihoods—79 per cent of the population inhabits rural areas4—and, therefore, are largely dependent on access to and control over land and other natural resources. Yet, as a result of Cambodia’s tumultuous history which led to significant changes on land ownership and documentation of such ownership, many do not possess formal land titles and, therefore, are extremely vulnerable to land grabbing. Rule of law and corruption issues have facilitated such land confiscations and further exacerbated vulnerability of certain populations, especially rural and indigenous women. Hence, insecurity of land tenure is one of the most pressing issues affecting Cambodians today, particularly those from impoverished backgrounds in cities, rural people, indigenous communities, and women.5,6 All of the 15 women interviewed in these consultations intimated that they have traditionally relied on their land for cultivation and agriculture activities to support their daily livelihood, and that they themselves and their families have experienced land conflicts. When asked about the most pressing challenges in their daily lives as women workers living in rural areas, the respondents cited the following: 2 Cambodia Center for Human Rights (CCHR). 2013. Cambodia: Land in conflict. Phnom Penh, Cambodia: CCHR. http://bit.ly/1KtPNVy. 3 CCHR. 2016. Access to collective land titles for indigenous peoples in Cambodia. CCHR Briefing Note. Phnom Penh, Cambodia: CCHR. http://bit. ly/1o0z3wi. 4 World Bank Data. n.d. Rural population (% of total population): 2014 figures. Washington D.C.: World Bank Group. http://bit.ly/1Y4NLxd 5 CCHR. 2013. CCHR’s monitoring of land concessions in Cambodia in 2012. Phnom Penh, Cambodia: CCHR. http://bit.ly/2uxv3eN. 6 CCHR. 2013. Cambodia: Land in conflict, an overview of the land situation. Phnom Penh, Cambodia: CCHR. http://bit.ly/1KtPNVy.

Rural Women and Human Rights

lack of land and land tenure security, loss of farmland and crops, lack of opportunities, and stereotyping of gender roles and cultural and social behaviors that perpetuate ideas of inferiority or superiority of either of the sexes. Also, rural women working in agriculture and garment factories face exploitative conditions, such as low pay, dangerous transport, and constraints on freedom of expression. They are often compelled to protest these conditions.

2 CONSULTATIONS WITH RURAL WOMEN OF CAMBODIA Consultations were conducted in the Cambodian provinces of Siem Reap, Preah Vihear, and Pursat, through interviews and focus group discussions(FGDs). There were a total of 15 respondents. The findings from these consultations were then analyzed alongside existing research to draw observations and patterns that mainly correspond to the three provinces, but which also reflect the situation in many other parts of the country. The FGDs had the primary objective of capturing the situation of rural women—especially those in the areas of agriculture, land, and supply chains—and gathering more details and nuanced insights on their situation. A desk research was also conducted, which focused on understanding the existing legal framework and policies governing these areas, as well as uncovering existing observations on the status of rural women via scholarly articles, official reports, and advocacy pieces. In addition to the FGDs and desk research, 15 rural women (5 from each province) were interviewed individually using a nine-question survey that sought their knowledge, opinions, and experiences on: (1) issues on land, agriculture, and business; (2) women’s role in supply chains; and (3) existing actions and policies, as well as recommendations.7 Twelve of the respondents are seasonal farmers who have been growing rice, beans, mango, cassava, and orange fruit for years. Typically, after harvesting their products, these are sold to companies or businesses. Two women are 7 Inteviews in Siem Reap, Preah Vihear, and Pursat were held in August 2017.

Business and Human Rights in the ASEAN

both seasonal farmers and garment factory workers, while the other woman interviewed is a seasonal farmer and a waitress. Of the 15 women, five are from indigenous groups in Preah Vihear. In the three rural communities selected for field mission/interview, no large agri-business operations were observed.

3 Legal and policy framework 3.1 International laws in relation to the land and agriculture sector While the Universal Declaration of Human Rights is directly included in the Cambodian Constitution,8 Cambodia is party to several international treaties including the following: • International Covenant on Civil and Political • Rights International Covenant on Economic, Social and Cultural Rights • Convention on the Rights of the Child • Convention on the Elimination of All Forms of Discrimination Against Women

3.2 International laws in relation to the labour sector The Cambodian government has ratified all of the eight International Labour Organization (ILO) Core Conventions,9 namely: 1. Forced Labour Convention (1930, No. 29) 2. Freedom of Association and Protection of the Right to Organize Conventions (1948, No. 87) 3. Right to Organize and Collective Bargaining Convention (1949, No. 98) 4. Equal Remuneration Convention (1951, No. 100) 5. Abolition of Forced Labour Convention (1957, No. 105) 6. Discrimination (Employment and Occupation) Convention (1958, No. 111) 7. Minimum Age Convention (1973, No. 138) 8. Worst Forms of Child Labour Convention (1999, No. 182) 8 Article 31 of the Cambodian Constitution (1993). 9 See ILO conventions ratified by Cambodia. http://bit.ly/1dnlkc7.

Rural Women and Human Rights

3.3 Relevant national laws, policies, and initiatives 1. Adopted in 1993, the Constitution of Cambodia states that “men and women have equal rights before the law and enjoy equal participation in political, economic, social and cultural life (Article 35); equality in employment and equal pay for equal work;” and explicitly prohibits “all forms of discrimination against women (Article 45).” 2. Article 12 of the 1997 Labour Law protects against gender discrimination. 3. The 1996 Law on Environmental Protection and Natural Resources Management contains provisions aimed at protecting the environment and assessing the potential environmental impact of all projects before they are approved by the Cambodian government. 4. The 2001 Land Law provides protections on rights to land and property 5. The 2002 Law on Forestry provides regulations designed to promote the sustainable management of forests. 6. The 2007 Law on Fishery aims to promote and protect the livelihood of communities living in close proximity to fish sources. 7. The 2007 Law on Management of Water Resources in Cambodia promotes the sustainable use of water resources so as not to adversely affect livelihoods. 8. The 2010 Law on Expropriation describes how expropriation of public land can take place justly and fairly. 9. The 2016 Law on Trade Union governs labour unions’ activities and memberships. 10. Sub-Decree No. 83 on the Procedures of Registration of Land of Indigenous Communities sets out the procedure for indigenous land titling and registration and is a core legal instrument in protecting the human rights of indigenous people. 11. Among the six goals of the National Policy on Youth Development (2011) is the promotion of gender equity and equality for youth, both women and men, especially empowering women and providing them with opportunities. 12. Established in 2012 and comprising 150 members, the Cambodian Women Entrepreneurs’ Association aims to develop women’s businesses and strengthen the voices of women entrepreneurs in the private sector.

Business and Human Rights in the ASEAN

13. The Phase III of the Cambodian Government’s 2013 Rectangular Strategy for Growth, Employment, Equity and Efficiency recognizes gender equity as a key component of national development, capacity building, and human resource development. It highlights the need “to further improve the status of women, who are the backbone of Cambodian society and economy.” 14. In 2014, the Cambodian Ministry of Women’s Affairs adopted a 5-year (2014–2018) strategic plan for gender equality and women’s empowerment, also known as the “Neary Rattanak Strategic Plan.”10 It aims to empower women in the economy, as well as to (1) promote education, attitude change, and public leadership; (2) combat gender-based violence, trafficking, and sexual exploitation; and (3) further mainstream gender in policies and across all sectors of government.

4 Findings 4.1 Women’s awareness of business practices or policies 33.33% stated that they have experienced being banned by both companies and authorities from representing their community members to protest, cultivating their land, and networking with civil society organizations.

Of the women interviewed, 40 per cent said they are not aware of business practices or policies that prohibit women from taking on any specific job or carrying out any particular business activity. While 26.67 per cent of respondents believed that such practices or policies do not exist in Cambodia, 33.33 per cent stated that they have experienced being banned by both companies and authorities from representing their community members to protest, cultivating their land, and networking with civil society organizations.

4.2 Insecurity of land tenure Only 20 per cent of the respondents perceived their current land tenure situation as secure; the rest (80%) felt their land tenure situation is insecure. Because a woman’s ability 10 Ministry of Women’s Affairs-Cambodia. 2014. Neary Ratanak IV: Fiveyear strategic plan for gender equality and women’s empowerment (2014–2019). Phnom Penh, Cambodia: Ministry of Women’s Affairs. http:// bit.ly/2DVa9ai.

Rural Women and Human Rights

Figure 1. Women’s knowledge on business practices and policies DO YOU KNOW OF BUSINESS PRACTICES OR POLICIES THAT DIRECTLY EXCLUDE, MARGINALIZE, OR DISADVANTAGE WOMEN?

33.33% 40%

NEVER KNOW NON-EXISTENCE KNOW

26.67%

Source: BHRRC’s compilation

to perform the traditional roles prescribed to her by Khmer culture relies on security of tenure, insecurity of tenure for women—as a result of land conflict—is likely to be the cause of great strain among those women. Five women respondents (all of whom are from indigenous groups) from Trapeang Tortem Village, Romtum Commune, Roveang District, in Preah Vihear Province have recently been involved in land conflicts with Chinese investors. They said that they were unaware of the development project planned by the Chinese investors and of the economic land concession granted by the Cambodian government. This practice falls below the requirement of Free, Prior and Informed Consent (FPIC), which is a standard protected under ILO Convention No. 16911 and the UN Declaration on the Rights of Indigenous Peoples (UNDRIP), and applies in cases where the relocation of indigenous people is likely.12 While Cambodia has not yet ratified ILO Convention No. 169, which makes FPIC obligatory, it voted in favor of the UNDRIP,13 which, while not binding, does indicate that the state agrees to such principles.

11 Article 16. For the full text of the Convention, see http://bit.ly/1HP8BLq. 12 Article 10. For the full text of the Declaration, see http://bit.ly/1bKIrMs. 13 UN Bibliographic Information System, Voting Record of the UNRRIP, see http://bit.ly/2v1W4UM.

Business and Human Rights in the ASEAN

Figure 2. Women’s perception of land tenure

HOW DO YOU PERCEIVE YOUR CURRENT LAND TENURE SITUATION?

SECURE

NOT SECURE

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Source: BHRRC’s compilation

One of the five women respondents from Pursat Province was forced from her home and has witnessed bulldozers demolish her house and forcibly cleared her farmland. No warnings or prior notification of demolition was given, and all of her possessions in the house were destroyed, as were her crops.

In Thma Da Commune and Pursat Province, women respondents reported that they have been forced off their land to make way for agribusiness ventures and a Special Economic Zone operated by a powerful timber magnate. The actions of the company have resulted in negative impacts on the livelihoods of villagers, including the destruction of homes and farmlands. In 2010, one of the five women respondents from Pursat Province was forced from her home and has witnessed bulldozers demolish her house and forcibly cleared her farmland. No warnings or prior notification of demolition was given, and all of her possessions in the house were destroyed, as were her crops. Several months later, she tried to return to build a new house and plant crops but was prevented by local authorities. She has now resettled in a house nearby with several other families who have also lost their homes. The company has continued to clear disputed land; yet, no action has been taken to resolve ongoing disputes with the villagers whose livelihoods have been affected. While the Law on Environmental Protection and Natural Resources Management requires environmental impact assessments for these projects, the women interviewed did not know whether such was indeed conducted.

Rural Women and Human Rights

In Siem Reap, women respondents stated that they have been involved in a long-running dispute between villagers in Banteay Srey District, the Royal Cambodian Armed Forces (RCAF), and the Forestry Administration. The dispute started in 2002, after the Siem Reap Provincial Hall authorities announced that land farmed by 90 families in Tapen Village was part of Phnom Kulen National Park. They said that they have cultivated the disputed land in Tbaeng Commune, which measures 183 hectares, since 1997. However, in 2003, the Forestry Administration and soldiers from the Second Division of the RCAF accused them of illegal occupation and seized their land, ostensibly to grow acacia trees. Much of the land was then reportedly leased to business people; many of whom established cassava plantations.

4.3 Economic insecurity caused by loss of farmland Because the livelihoods of many Cambodians depend on access to land for farming and cultivation, all women respondents reported that both land conflicts and the loss of farmland have affected them economically. The findings reveal a number of ways in which land conflict has increased economic insecurity among women; difficulties in buying enough food to feed their families and medical needs not being met counted as the most urgent and major economic tead of challenges, and amount to right to food and health concerns. Majority of the respondents (13 out of 15 women) said that they have taken out either bank loans or loans from individual business people with high interest rates to ease their financial difficulties as a result of land conflict and loss of farmland. Women respondents who took out loans expressed unease regarding doing so during the interviews, as many were not confident that they could pay them back. In fact, a trend was identified whereby families resort to taking out additional loans to pay for their older loans, driving them into a cycle of debt. According to a 2014 Asian Development Bank report on Cambodia, 30 per cent of borrowers in the agriculture sector were unable to pay back their loans. Falling into a cycle of debt makes borrowers more vulnerable and could lead to â&#x20AC;&#x153;poverty trap.â&#x20AC;? Borrowers become poorer when they need

Business and Human Rights in the ASEAN

to sell their assets or properties to make loan repayments while trying to support daily needs, such as food and health care.14 When it comes to taking out loans, only 20 per cent of women respondents said that they could take out loans without their husbands’ cooperation, but that they were required to arrange a mortgage. Moreover, 13.33 per cent of the respondents said that they failed to take out loans because they were unable to present any man as guarantor. Without a guarantor and/or mortgage, bankers or lenders did not believe that the women could make repayments. Eight out of 13 women who had successfully taken out loans previously said that they could only take out loans with their husbands’ consent and assurances. These issues have psychological impacts on the respondents and their families. For example, the loss of a home or job is often considered among the most stressful human experiences. Being embroiled in a land conflict or loss of farmland and crops generally involves both the loss of home and job and, therefore, places a huge strain on the mental health of those affected, especially given that women’s roles primarily involve unpaid care work in the household. The two incidents happened to two women interviewed in Pursat Province, where one reported that she witnessed her farmland and crops being bulldozed by a company, while the other said that her husband suffered mental illness after the loss of their farmland and crops.

4.4 Inequality between women and men Inequality between women and men is manifested in women’s wage level, rank, and opportunities for advancement.

Eighty per cent of all respondents said that they felt they have not enjoyed the same or equivalent rights as men in either the agri-business or the garment industry. This perceived inequality is manifested in women’s wage level, rank, and opportunities for advancement. However, they did not think there was legislation or policy creating this gap. The gap was attributed to the stereotype in gender roles and cultural and social misperceptions that breed ideas of inferiority or superiority between men and women. The respondents generally felt that people tend to believe that men are smarter, more hardworking, and can hold 14 Asian Development Bank (ADB). 2014. Cambodia: Country poverty analysis. Mandaluyong, Philippines: ADB. https://goo.gl/uCMQwD.

Rural Women and Human Rights

higher positions; hence, they deserve higher pay and benefits at the expense of women. Only 20 per cent of the respondents believed that both women and men have enjoyed the same level of rights under the law. According to them, benefits should be dependent on the level of knowledge and experience of an individual. Thus, they believed that it should not matter much whether someone is a man or a woman. According to the United Nations Food and Agriculture Organization, women constitute almost 70 per cent of the farming population in Cambodia and, as a result, play an important role in Cambodia’s economy.15 However, it is concerning that women’s representation at both local and national levels remains low. For instance, the latest national elections in 2013 saw only 20.33 per cent of women parliamentarians out of the 123 seats elected,16 while the recent commune elections in June 2017 saw only 16.76 per cent of women out of 11,572 commune council seats elected.17 These figures fail to meet the minimum target of 25 and 30 per cent of women representation at the local and national levels, respectively, by 2015, as pledged by the government under the Cambodian Millennium Development Goals in 2003. The garment and footwear sector is a large, growing portion of Cambodia’s economy. It is a USD 5 billion industry that depends on the labour of at least 700,000 people18—86 per cent of whom are women. Women labour activists and unionists could continue to face further problems potentially posed by the 2016 Law on Trade Unions (LTU) and the draft Law on Minimum Wages (LMW). Some provisions of both LTU and LMW fail to comply with the Cambodian Constitution, the International Covenant on Civil and Political Rights, and relevant ILO conventions that Cambodia is party to.

15 Food and Agriculture Organization (FAO). 2011. The state of food and agriculture - women in agriculture: Closing the gender gap for development. Rome: FAO. https://goo.gl/WYtjN. 16 CCHR. 2013. Politics in the Kingdom: Increasing female representation – 2013 National Assembly Elections. Phnom Penh, Cambodia: CCHR. https://goo.gl/vTpExE. 17 Kijewski, L. 2017. Female representation in politics decreased in commune elections. The Phnom Penh Post. 30 June 2017. https://goo. gl/i5XuFv. 18 Kim, E. 2017. Cambodian garment workers rise up and face a crackdown. Aljazeera. http://bit.ly/1x2nQ26.

According to the United Nations Food and Agriculture Organization, women constitute almost 70 per cent of the farming population in Cambodia and, as a result, play an important role in Cambodia’s economy.

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The LTU contains several disproportionate restrictions on the rights of unions to conduct their activities freely, as well as burdensome mandatory registration requirements that unjustifiably restrict the ability of unions to carry out their activities.19 Consequently, the enforcement of LTU—together with the potential application of LMW—could have a significant adverse impact on female workers and unionists, given the vast majority of garment workers are women. If these issues are not properly addressed, they could contribute to the widening of the gap of inequality between men and women.

4.5 Discrimination against pregnant women A vast majority of women respondents (93.33%) said that they have experienced, observed, or witnessed discrimination against pregnant women, especially when those women were close to delivering their babies. They said that while pregnant women are usually denied job opportunities, workers and farmers who had been working before getting pregnant also faced dismissal close to giving birth. Companies and factories are usually unwilling to employ pregnant women because of perceived low productivity and the maternity leave payment required Figure 3. Women’s experience in terms of discrimination against pregnant women HAVE YOU OBSERVED OR EXPERIENCED ANY DISCRIMINATION AGAINST PREGNANT WOMEN?

6.67%

YES NO

93.33%

Source: BHRRC’s compilation

19 Articles 12–16, 29, and 65(f) of the 2016 LTU.

Rural Women and Human Rights

under the Labour Law. Only one respondent stated that she has never seen any discrimination against pregnant women. She is single and has not worked among pregnant women.

4.6 Women’s role in supply chains All respondents initially did not understand what supply chains mean to them. When explained further, 66.67 percent of them stated that they play an important role in collecting crops, packaging, and supplying them to buyers—whether companies or individual business people. They believe that women are more skillful than men when it comes to bargaining market prices with potential buyers. Furthermore, 33.33 per cent of the respondents said that they are needed at the first stage of the supply chain, namely, carrying out basic tasks to collect raw materials for agribusiness or manufacturing. These are the stages where women are mostly seen as having more value and visibility. All women interviewed said that they themselves have never held a high or decision-making position in companies or business activities. They tend to listen to either their husbands or other men with higher ranks. They have also barely seen women hold top positions of influence, but their community leaders—who represent the interest of the group and lead protests against companies or authorities involved in land conflicts—are mostly women. Many attributed this leadership to the view that women have not been seen as targets by authorities as much as men have been.

4.7 Positive development: Interventions to strengthen women activism In the face of widespread land grabs, abuses, and harassment, women are often at the forefront of protest movements to protect their land and human rights. Ten women respondents from Pursat and Siem Reap Province have been actively involved in and have led their community protests against companies and authorities involved in land conflicts. As a result, five women interviewed, along with their community in Siem Reap Province, were able to resolve their land conflict with the RCAF, with an agreement that each family is given 40 square meters of land for each hectare of land they had previously occupied. Five women from Pursat Province said they have led protests and petitions on their community’s behalf since land conflicts

They said that while pregnant women are usually denied job opportunities, workers and farmers who had been working before getting pregnant also faced dismissal close to giving birth.

Business and Human Rights in the ASEAN

erupted. They said that they have to be brave and active in order to find solutions. They come and go to Phnom Penh on a regular basis with support from civil society organizations to follow up on their petitions with government bodies. Cambodian civil society organizations, including the Cambodian Center for Human Rights (CCHR), support several land and labour activists and human rights defenders; a large number of whom are women.20 For the most part, local organizations provide legal and material support, as well as support in terms of advocacy and training of activists and human rights defenders.

5 Conclusions and recommendations The findings show that land conflict, displacement, and loss of farmland and crops cause further marginalization among women. Rural women engaged in agricultural or manufacturing work also feel discriminated upon in the work place and experience unequal treatment in various aspects of work and home life. Below are some policy recommendations for governments and companies to consider in order to address systemic issues that cause further marginalization, discrimination, and unequal treatment of women.

Recommendations to the Cambodian government: In the exercise of its duty to protect human rights of rural women against abuse by third parties, including businesses, the government should: 1. Ratify ILO Convention No. 169, the Indigenous and Tribal Peopleâ&#x20AC;&#x2122;s Convention. 2. Require that companies conduct human right and environmental impact assessments, and fully comply with FPIC before any development or project that can affect the land where indigenous and rural women work. 3. Introduce legislation that makes it unlawful for companies to discriminate based on gender, such as through unequal wages, unequal opportunities 20 CCHR Land Activists Profile, see https://goo.gl/p213n2.

Rural Women and Human Rights

for advancement, and discrimination against pregnant women, among others. Prove commitment to human rights and the rule of law by taking steps to address allegations of judicial harassment against women and human rights activists. Encourage businesses to provide more opportunities for rural women, such as by engaging directly with them instead of their male counterparts, and ensuring greater women participation and leadership by considering the multiple roles played by women in the home and in the workplace when organizing activities and initiatives. Amend the LTU in order to be consistent with international human rights law and labour standards, ensuring that the rights of individuals and unionists to defend and promote workers’ labour and human rights are protected, including the right to establish associations and hold peaceful protests and strikes. Ensure that the upcoming minimum wage law does not restrict workers’—including rural workers’— fundamental freedoms of assembly, association, and expression, and detrimentally affect trade unionists’ ability to demand adequate minimum wages and better working conditions. Promote the role of women in society by ensuring greater women representation in Cambodian parliaments and commune councils.

In ensuring that rural women victims and survivors of business-related human rights abuses have access to effective remedy, the government should: 1. Develop a streamlined, effective, and rights-based process for land dispute settlement by ensuring that there is proper and effective consultation with affected communities, especially women, and that there is adequate compensation based on proper valuation. 2. Ensure that victims of labour rights’ violations have access to effective remedies through the creation of domestic Labour Courts. The government should also play an awareness-raising role, as well as extend other needed services. It should: 1. Raise awareness among communities on women’s rights through education and training.

Business and Human Rights in the ASEAN

2. Provide support to affected communities to ensure children can stay in school. 3. Improve mental health services by training more psychiatrists, practitioners, and academics specializing in mental health, and by making these services accessible to rural communities. Infrastructure should be developed in a way that promotes the rights of rural women. Government should, for example: 1. Provide the needed support services, such as building more infrastructure and improving irrigation systems, to provide water access to rural women who grow their own crops. 2. Link more markets for rural women’s products and ensure fair market prices.

Recommendations to businesses: The UN Guiding Principles on Business and Human Rights, which provides a widely accepted standard of policy and practice for companies, states that businesses everywhere have a responsibility to respect human rights throughout their activities and business relationships. This means businesses need to avoid infringing on the rights of people and to address the negative impacts they have caused or contributed into. To ensure that businesses respect the rights of rural women, companies should: 1. Conduct meaningful consultations to obtain indigenous peoples’ FPIC prior to initiating any project. 2. Remediate human rights harms linked to their operations or investments. 3. Express commitments to women’s human rights through the operational implementation and public dissemination of a policy statement approved at the highest levels that stipulates the companies’ (women’s) human rights expectations of their personnel, partners, and other entities linked to their operations or products. 4. Engage in ongoing human rights due diligence that identifies actual and potential human rights impacts (including those on rural women), acts upon the findings, tracks responses, and indicates how those impacts were or will be addressed.

Rural Women and Human Rights

5. Integrate the findings from human rights impact assessments into internal functions and processes (including budget allocations and oversight mechanisms) and take appropriate action to ensure that the impacts are mitigated or eliminated. 6. Comply with all applicable laws and respect internationally recognized human rights (especially womenâ&#x20AC;&#x2122;s rights), seek to honor human rights principles above other requirements, and treat the risk of gross human rights abuses as a legal compliance issue. 7. Provide women workers and community members with training programs to enhance their skills and improve their productivity.

Business and Human Rights in the ASEAN

Good and Bad Practices in the Export-Driven Banana Industry

GOOD AND BAD PRACTICES IN THE EXPORT-DRIVEN BANANA INDUSTRY IN THE PHILIPPINES Initiatives for Dialogue and Empowerment through Alternative Legal Services

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1 EXECUTIVE SUMMARY The Philippine banana industry earned USD 618 million in 2016—making the country one of the top exporters of bananas in the world.

The Philippines is one of the top exporters of bananas in the world. The industry earned USD 618 million in 2016. However, the wealth and success enjoyed by large agriculture exporting and trading companies do not trickle down to small-scale producers. The banana plantations in Mindanao, Philippines, have been in operation for over 20 years. During this time, banana farmers—who became smallholders under the Comprehensive Agrarian Reform Program (CARP)—signed contracts with agriculture companies that export bananas to Japan, China, and/or the Middle East. However, these farmer-beneficiaries have seen little improvement in their livelihoods since then. Unfortunately, those who entered into contracts with large corporations are even worse off. Due to unfair contracts, many farmers have incurred millions of pesos in debt, while others experience a decrease in income because of increasing input prices, among other reasons.

Why the contracts are unfair The contracts signed by banana farmers were executed without a prior and meaningful consultation, which is a violation of Philippine Contract Law1 and the rules and

1 New Civil Code (NCC). Art. 1318. There is no contract unless the following requisites concur: (1) consent of the contracting parties, (2) object certain which is the subject matter of the contract, and (3) cause of the obligation which is established. (1261).

Good and Bad Practices in the Export-Driven Banana Industry

regulations2 that govern contracts between farmers and investors.3 Moreover, the contract period signed by these farmers is typically between 15–30 years, with provisions for automatic renewal for another 15–30 years. These extremely lengthy contract periods provide little to no opportunity for adjustment nor amendment, despite changing conditions. Under these contracts, all of the risks and costs of production are largely shouldered by the farmers. For example, the farmers will bear the cost of a box of bananas damaged during shipment and those rejected at their port of destination. Many cases remain pending at the Department of Agrarian Reform (DAR), particularly under the DAR Adjudication Board (DARAB) and the National AVA4 Evaluation Committee (NAEC). Others are pending at the Presidential Agrarian Reform Council (PARC). Progress in these cases has been slow to none.

NCC. Art. 1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former. (n).

NCC. Art. 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable. (1265a).

2 Department of Agrarian Reform (DAR). Administrative Order No. 9, Series of 2006, Section 4 General Principles, paragraph 4.7. The terms and conditions of the AVA contract shall be mutually agreed upon by the ARBs and the investor. The approval of the contracts by the PARC or the PARC ExCom shall be strictly guided by the conditions stipulated in Art. II of this Order.

The terms and conditions of the AVA contract shall be fully known to all parties. If warranted, the parties may translate the contract into the local dialect known to the ARBs. It shall be the responsibility of the concerned DAR field officials to ensure that the ARBs are made fully aware of and understand the options available to them, including their rights and obligations under the AVA contract.

3 This lack of meaningful and informed consent will be further discussed and illustrated through the narration of the specific cases of the farmer organizations in the main body of the paper. 4 AVA or agribusiness venture arrangement is an “entrepreneurial collaboration between ARBs and investors to implement an agribusiness venture involving lands distributed under CARP.” (3.2. Section 3 – Definition of Terms. DAR AO No. 9 s. 2006.)

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Policy Recommendations: 1. Contracts between farmers and corporate investors have to be regulated by the government to equalize the stark difference in economic power and legal knowledge between the parties. This is the aim of the pending law House Bill No. 5085. 2. Farmers should be afforded and provided legal assistance and counsel by the government during contract negotiations, renegotiations, and signing. DAR should lead this effort because the farmers’ organizations involved in the cases are all Agrarian Reform Beneficiaries (ARBs). • Legal support services should also include monitoring the implementation of the contracts and intervention, or mediation should disputes arise. • Additionally, DAR should also provide support services to farmers’ organizations, and/ or help them access technical services and programmes of other relevant government agencies, such as the Department of Agriculture and the Department of Trade and Industry. 3. Government institutions, such as Land Bank of the Philippines, should provide farmers better access to credit and financing facilities with low or, if possible, zero-interest rates. 4. DAR should highly decentralize the approval and review of agreements and contracts at the regional level. 5. There should be a clear law and rule on which tribunal or body has jurisdiction in cases involving agrarian justice and agri-invest contracts. This will minimize the ability of investors and their lawyers’ negative practice of using general law and its technicalities to the prejudice of the farmers. This will also prevent delays that happen when cases are filed in the wrong tribunal only to be decided upon on technicalities and ordered transfer to the proper forum that has the jurisdiction under law. In such circumstances, the cases transferred will be treated as new and will begin from the filing stage once again.

Good and Bad Practices in the Export-Driven Banana Industry

Together with banana farmers’ cooperatives, Initiatives for Dialogue and Empowerment through Alternative Legal Services Inc. (IDEALS)—a legal resource institute in the Philippines—forwarded the following recommendations for:

Agribusiness corporations in the banana industry 1. Conduct meaningful consultation and renegotiate fairer contracts with farmers Raise the price of bananas to reflect current market conditions, so farmers can gain a reasonable share in export incomes Shoulder a fair share of the risk and cost of production

DAR and PARC: 1. Facilitate open and transparent contract negotiations between agribusiness corporations and banana farmers and/or their cooperatives Revoke unfair contracts and expedite resolution of pending cases under the DARAB and NAEC Fulfil its mandate of providing comprehensive support services, especially to ARBs

House of Representatives: 1. Pass HB No. 5085 that aims to regulate agribusiness contracts as well as safeguard and protect the rights of the ARBs, consistent with the vision of the Comprehensive Agrarian Reform Law.

2 METHODOLOGY5 In 2013, IDEALS documented the cases of five farmers’ cooperatives and their contracts with agribusiness exporters. This was done through the support of the Gender Transformative and Responsible Agribusiness

5 The case study methodology involves both primary and secondary methods of research and sources. The research also has accompanying influencing, policy, and advocacy work, as well as a public campaign implemented on social media.

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Investments in South East Asia (GRAISEA) programme.6 In 2017, IDEALS, through the support of the Business and Human Rights (BHR) project, updated the cases which would later on inform the case study on the negative impacts of irresponsible agribusiness investments and a countryspecific research to support engagement with companies in the Philippines.7 Originally, the BHR project in the Philippines had two main goals: (1) to push for the development of the Philippine National Action Plan (PNAP) on BHR and (2) to produce a country-specific research on both good and bad practices in the Philippines that demonstrate the responsibility of business to respect human rights. The development of the PNAP stalled under the political climate of the Philippines. The government has not actively engaged other non-state stakeholders in the PNAP process. As such, the BHR project focused heavily on the development of the case studies and the advocacy and campaign work.

In the Philippines, although BHR values and principles guided the work, stakeholders such as businesses, farmers, and even nongovernmental organizations are alienated by the use of the term BHR, which made engaging stakeholders more difficult. an analysis of the current socio-political context shows that the alienation stems from unfamiliarity with BHR, and the demonization8 of human rights and human rights defenders in the Philippines as criminal sympathizers who use human rights as an “excuse to destroy the country.”9,10 6 GRAISEA is a regional programme funded by the Embassy of Sweden in Bangkok that aims to improve the livelihoods of small-scale producers in Asia through responsible, gender transformative value chains and private sector investments. For more information, visit www.oxfam.org. uk/graisea. 7 IDEALS would later combine both outputs into a single case study to present a more comprehensive picture that would look into not only the negative impacts of irresponsible agribusiness practices but also the positive impacts of best practices in the Philippine cavendish banana export industry. 8 Gavilan, J. 2017. ‘Demonizing’ human rights in the first year of Duterte. Rappler. https://www.rappler.com/newsbreak/in-depth/171558demonizing-human-rights-rodrigo-duterte-first-year. 9 Cayabyab, M J. 2016. Duterte: Don’t use human rights as excuse to destroy PH. Inquirer. http://newsinfo.inquirer.net/799111/duterte-dontuse-human-rights-as-excuse-to-destroy-ph 10 Hincks, J. 2016. Human-Rights Defenders Are Now in the Philippine President’s Crosshairs. Time. http://time.com/4584478/dutere-

Good and Bad Practices in the Export-Driven Banana Industry

Initially and in order to engage more stakeholders, more familiar and softer words were used because not all participants are familiar with BHR. Instead, terms such as inclusive business models, inclusive business practices, sustainable development, and/or win-win scenarios, among others, were used. This was particularly true for the national consensus building event held in Cagayan de Oro City in September 2017 wherein the theme was specifically worded as corporate accountability for business-linked abuses and best practices. Primary research was conducted through interviews in small group discussions. Fieldwork started in April 2017 where three cases were updated (NUVILASCO, DFBGARC, and HARBCO),11 while two were dropped due to internal disputes and risky controversies. All of the three cases that were updated in April 2017 showed bad practices and negative impacts. Subsequently, further fieldwork was conducted in August and November 2017 to document good practices involving the cases of Mampising CARP Beneficiaries Multipurpose Cooperative (MCB-MPC) and the Tagnanan Agricultural Marketing Cooperative (TAGCO). Both cooperatives have existing growership contracts with Unifrutti Philippines, Inc. In June 2017, the case of Islanders CARP Farmer Beneficiaries Multipurpose Cooperative (ICFBMPC) was also documented showing negative impacts. Farmer-representatives from the six organizations were continually engaged throughout the project. The farmers

threatens-to-kill-human-rights-activists/ 11 Nueva Visayas Labor Services Cooperative (NUVILASCO), Davao Fruits Banana Growers Agrarian Reform Cooperative (DFBGARC), and Hijo Agrarian Reform Beneficiaries Cooperative (HARBCO).

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were brought to Manila to participate in the following activities: • A country roundtable on agri-invest in the Philippines entitled “The Banana Story” which was conducted on 8 June 2017.12 On this occasion, the DAR Vice-minister13 for legal affairs agreed to conduct a field visit and local consultation with farmers in Compostela Valley province.14 • The first legislative hearing for House Bill No. 5085 which is also known as the AVA Bill, aimed to regulate the investments and contracts that cover the farms and operations of ARBs. The farmers were also brought to other activities held outside Manila, such as: • The 3rd legislative hearing held in Davao City on 23 November 2017. On this occasion, IDEALS sent invitations and press release statements to Davaobased media houses for their attendance and coverage of the event. • A back-to-back event on 19-20 September 2017 in Cagayan de Oro City where a national consensus building event on BHR, a roundtable discussion on gender responsive principles, and a media briefing were conducted. During the national consensus building event MCBMPC was part of a Sustainable Agribusiness Models panel15 wherein PS representatives shared about the good practices and the responsible business model of their investor, Unifrutti.16

12 Farmers from HARBCO, NUVILASCO and DFBGARC shared the negative impacts of irresponsible agribusiness investments with 53 participants, most notable of which were members of the DAR and the House of Representatives Committee on Agrarian Reform (AR). 13 The official title of the office and position is “Undersecretary”. 14 The consultation was held on 23 August 2017 and was entitled “Going Bananas in ComVal”. Twelve farmers’ organizations participated, including MCBMPC, who shared their success story and general satisfaction with their agribusiness investor, Unifrutti. 15 The main discussant of the panel was Butch Umengan of the PPSA who shared Grow Asia’s initiative in engaging the government, PS, CSOs, and farmers in the pursuit of end-to-end value chain improvement. PS representatives likewise shared their good practices and inclusive business models. 16 Unifrutti was invited to participate in the panel, but a representative was unavailable.

Good and Bad Practices in the Export-Driven Banana Industry

Figure 1. Top importers of Philippine bananas in 2016

JAPAN

4% 5%

39%

CHINA SOUTH KOREA UNITED ARAB EMIRATES IRAN

19%

KUWAIT SAUDI ARABIA HONG KONG

24%

NEW ZEALAND

SOURCE: Based on ICT calculations

3 THE PHILIPPINE BANANA INDUSTRY In 2016, the Philippines exported 1,397,451 tons of bananas valued at USD 618,830,000.17 More than half of such trade volume was exported to Japan and China at 37.4 per cent (444,546 tons) and 23.4 per cent (319,285 tons), respectively.18 In 2014, according to the Philippine Statistics Authority (PSA), there were 48,442 farmers who were directly involved in farm work and production of cavendish bananas,19 which is 29.7 per cent of the entire direct agriculture, forestry, and fishing workforce. In 2015, the Philippine Banana Growers Exporters Association (PBGEA) stated that the banana-export industry provided more than 500,000 jobs. Moreover, in October 2017,

17 2016. List of importing markets for the product exported by Philippines in 2016. International Trade Centre. http://www.trademap.org/Country_ SelProductCountry.aspx?nvpm=1|608||||0803|||4|1|1|2|1|1|2|1|1 The source of data for the trade map are ITC calculations based on UN COMTRADE statistics. https://comtrade.un.org/. 18 Ibid. 19 PSA. 2017. 2014 Annual Survey of Philippine Business and Industry Agriculture, Forestry and Fishing: Final Results. Philippine Statistics Authority. https://psa.gov.ph/content/2014-annual-survey-philippinebusiness-and-industry-agriculture-forestry-and-fishing-final

500,000 jobs are created by the banana-exporting industry.

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Figure 2. Distribution of employment for all agriculture, forestry and fishing establishments by industry sub-class: Philippines, 2014 60,000 50,000

TOTAL EMPLOYMENT 163,333

48,442

37,901

40,000 31,590 30,000 20,000

14,898

12,378

10,000 0

Growing of banana, cavendish

Growing of sugarcane including muscovado sugar-making in the farm

Ocean fishing, commercial (using vessels over 3 tons)

Hog farming

10,625

Growing of pineapple

7,496

Chicken production, broiler

All other industries

INDUSTRY SUB-CLASS

PBGEA stated that the industry employs 1 million direct and indirect employees.20 The PBGEA and even the PSA paint the ideal picture of a large booming industry with a highly compensated work force. The PBGEA claimed that in 2015 the industry paid PHP 44 billion in total wages.21 Meanwhile, the PSA reported in its 2014 survey that the cavendish banana industry paid the highest average annual compensation to its employees, which amounted to PHP 26.6 billion in total and translated to an average annual compensation of PHP 166,564 per employee.22 However, according to a worker employed in a DFBGARCmember operated farm, they only earn PHP 250â&#x20AC;&#x201C;300 per day compared to the minimum daily minimum wage of PHP 335, and are not provided any social benefits by their employers. As smallholder farmers, ARBs do not earn compensation income. Instead, they earn income from production. The 20 Philippine Banana Growers and Exporters Association, Inc. (PBGEA). A presentation during the Roundtable Discussion on Philippine-China Trade and Investment Relations, Astoria Plaza, Pasig City, 11 June 2015. 21 Ibid. See Note 4. 22 Ibid. See Note 3.

Good and Bad Practices in the Export-Driven Banana Industry

average production income of TAGCO members, one of the more successful cooperatives in Compostela Valley, is at PHP 7,727.99 every 15 days, which will redound to PHP 15,455.98 per month and PHP 185,471.76 per year.23 It should be noted that similar to DFBGARC, TAGCO members hire farm hands and laborers to help with the production. The wages of these farm workers are taken from the annual production income. Despite only earning PHP 15,455.98 a month, TAGCO pays their laborers according to the daily minimum wage rate. This may be gleaned from the fact that the land owner only earns an average of PHP 113,707 per hectare per year if he does not pay the minimum wages of his workers and skips payments for land amortization. Should he be forced to pay the correct wages to his workers and his land amortization, he ends up with a measly PHP 25,739 per hectare per year. It should also be noted that the average landholding of an ARB in the Municipality of Compostela, where DFBGARC is located, is 0.60 hectares. While be that as it may that the industry generates millions of tons in trade volume and billions of dollars in revenue, the situation is not as rosy and pleasant on the ground. In act, it is well reported that the Philippine banana industry has been marked with serious and sometimes even violent problems due to differences and clashes between farmers and their corporate investors.

4 NEGATIVE IMPACTS Uncovering the issues In 2013, IDEALS, during its disaster response work for Typhoon Bopha,24 discovered that the contracts and agreements between farmers and their respective corporate investors were very onerous and one-sided for the sole benefit of the corporate investor. In the same year, IDEALS conducted interviews and 23 The numbers indicated are based on a document entitled â&#x20AC;&#x153;Individual Billing of Boxes Proceedsâ&#x20AC;? for a farmer belonging to TAGCO from 9 October 2017 to 22 October 2017. The document shows that a farmer earned a gross income of PHP 52,212.94 but due to deductions amounting to PHP 44,484.95, the net income of the farmer for the period stated is only PHP 7,727.99 24 See more here: http://www.bbc.com/news/av/business-20706993/ typhoon-bopha-hits-philippine-banana-crop..

PHP 15,455.98 = average monthly income of TAGCO members PHP 25,739 per hectare per year = average income of a landowner if he pays the minimum wage of his workers and pays for land amortization While be that as it may that the industry generates millions of tons in trade volume and billions of dollars in revenue, the situation is not as rosy and pleasant on the ground.

Business and Human Rights in the ASEAN

HARBCO’S TIMELINE IN BRIEF HARBCO was originally composed of 724 ARBs, awarded with 579 hectares of land under CARP. All farmers were employees of Hijos Plantation Inc. (HPI). 1998 - HPI executed a growership contract with HARBCO 1999 - HPI assigned all of its rights to Lapanday Food Corporation (LFC). 2012 - The charges and indebtedness of HARBCO stacked up to PHP 290 million because LFC was charging costs higher than the purchase price per box. 2013 - HARBCO filed for revocation of its contract with the PARC. 2014 - Congressman Cresente C. Paez sponsored House Resolution (HR) No. 141, which directed the House of Representatives Committees on Cooperatives and on Agrarian Reform, to conduct a joint inquiry, in aid of legislation, to review the status of HARBCO. The hearing was conducted in Tagum City under the leadership of Congressman Baguilat who eventually sponsored HB No. 5161, which sought to regulate Agribusiness Venture Arrangements (AVAs) which are the contracts between the ARBs and their corporate investors. HB No. 5161 would be later re-filed in 2017 during the Seventeenth Congress as HB No. 5085, with it HR No. 919 would also be issued “directing the Committee on Agrarian Reform to conduct an investigation, in aid of legislation, on the impact of AVAs in the country, in light of the mounting demand of ARBs, farmers, and agricultural workers for its revocation.” 2016 - DARAB decided in favor of HARBCO and declared their contract null and void. LFC appealed the decision to the Court of Appeals, which was returned to the DARAB. April 2016 - The half of 407 hectares of HARBCO was taken over by LFC. October 2016 - LFC claimed that HARBCO owes PHP 780 Million. LFC and HARBCO had a series of negotiations which ended in deadlock in December 2016. During this, time the land in possession of HARBCO languished due to lack of capital. In March 2017, HARBCO and LFC entered into an interim contract with a term of 1 year. In August 2017, DARAB decided in favor of HARBCO. LFC appealed this decision.

contract analysis of five ARB cooperatives working in the cavendish banana industry: Davao Fruits Corporation Agrarian Reform Beneficiaries Association (DFC-ARBA), HARBCO, Dizon Farm Workers Cooperative (DFWC), Checkered Farm Agrarian Reform Beneficiaries Multi-purpose Cooperative (CFARBEMCO), and AMS Magatos Agrarian Reform Beneficiaries Multi-Purpose Cooperative (AMS MARBEMCO). All five cooperatives signed onerous contracts without consulting lawyers and found themselves heavily indebted to their corporate investors and with little to no support. One cooperative’s story, in particular, attracted the attention of the House of Representatives of the Philippines due to the extremely dire situation of the HARBCO farmers and the plainly unfair contract that they had with their corporate investor, Lapanday Foods Corporation (LFC).

Delving deeper into why the contracts are unfair There are many unfair terms, provisions, conditions, and circumstances that surround the contracts and agreements between the banana farmers and their corporate investors. In the course of the work of IDEALS and Oxfam in analyzing the situation, the issues and bad practices can be categorized into three main issues, namely, problems with consent, the length of the contract with fixed and rigid terms, and the fact that all risks and costs of production are shouldered by the farmers.

Good and Bad Practices in the Export-Driven Banana Industry

CONTRACTS ARE EXECUTED WITHOUT PRIOR AND MEANINGFUL CONSULTATION WITH FARMERS. This is in violation of the Philippine contract law and the specific rules and regulations that govern contracts between farmers and investors. Moreover, the contracts are written in English,25 and the terms and conditions are not explained to the farmers. They are simply made to sign upon the promise of a better life and a brighter future. In a video26 produced by the GRAISEA programme, Mr. Rolando Torintera, a banana farmer from DFBGARC, explained that when they were made to sign the contracts, their investor SUMIFRU did not fully explain the terms, conditions, and legal effects of the contract to them. They did not bother to study the contract and did not think they needed to refer it to a lawyer because “back then SUMIFRU gave [them] a lot of support.” Furthermore, the farmers driven by harsh economic realities were enticed by the signing bonus offered to them.27 The legal remedy in such a case is for the party whose consent has been vitiated to pursue judicial and/or quasi-judicial action. This is an expensive, lengthy, and complicated process. The process is further complicated by jurisdictional issues with corporations insisting that legal remedies should be pursued in regular courts where general contract law shall be applied, while farmers and DAR insist that it is the under the jurisdiction of DARAB and/or PARC because they assert that the dispute is agrarian in nature and, thus, must apply more specific agrarian rules and regulations. Additionally, even when the case is already lodged in a quasi-judicial body, such as PARC, jurisdictional disputes can still affect and delay the resolution of the case. This was the case for HARBCO wherein the cooperative filed a case of nullification of its contractual arrangement with LFC before PARC. However, the case was unacted upon because PARC was not convened during the administration of President Benigno Aquino III. When the Duterte administration convened PARC, the case was already referred to the Provincial Agrarian Reform Adjudicator (PARAD) for resolution. The referral was the offshoot of a 25 Ibid. See Note 1 26 Watch the video here: https://tinyurl.com/y9pm8qqv 27 G.R. No. 159723. September 9, 2004. http://sc.judiciary.gov.ph/ jurisprudence/2004/sep2004/159723.htm

THE CASE OF LIM VS. SAN27 The Supreme Court in Lim vs. San explained that “[c]onsent in contracts presupposes the following requisites: (1) it should be intelligent or with an exact notion of the matter to which it refers; (2) it should be free; and (3) it should be spontaneous. Intelligence in consent is vitiated by error; freedom by violence, intimidation, or undue influence; and spontaneity by fraud. Thus, a contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is voidable.”

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THE CASE OF ISLANDERS: TIMELINE 1993 – Islanders executed a Joint Production Agreement (JPA) with Lapanday. 2014 - Lapanday invoking its takeover and management rights under the JPA ousted Islanders from their land through the use of force and intimidation via their armed guards. The basis for takeover was the refusal of Islanders to remit profits after Lapanday refused to pay its outstanding balance on rental fees designated under contract as royalties. 2015 – Islanders filed a petition for revocation of their contract with the PARC. 2017 - IDEALS conducted a consultation between DAR and the farmers from the Compostela Valley wherein DAR Undersecretary for Legal Services Luis Pangulayan stated that the petition is already with the National AVA Evaluation Committee (NAEC) and that it has already been submitted for resolution. All that the farmers can do is wait until such time that the resolution is officially promulgated. To date, Islanders have not been able to regain possession of their land.

Department of Justice (DOJ) opinion that stated DARAB, not PARC, has jurisdiction over the issue.28 The farmers also run the risk of undertaking the expensive and lengthy process with no assurance of the resolution of the case in their favour. This is what happened in the case of the Islander CARP Farmers Beneficiaries Multi-Purpose Cooperative (Islanders). As early as 1996, the cooperative lodged a complaint in the regular courts for the Declaration of Nullity, Mandamus, Damages, with prayer for Preliminary Injunction against their corporate investor.29 The complaint went all the way up to the Supreme Court. Subsequently, the Supreme Court issued a Resolution on 19 September 2012 and an Entry of Judgement upon the same on 21 March 2013. The Resolution affirmed the 2010 Court of Appeals30 decision, which, in turn, affirmed the findings of the DARABPARAD of Davao Del Norte’s that the contract between the farmers and their investor is valid and binding. It should also be noted that while the complaint mentioned above was pending, the corporate investor also filed a case against Islanders alleging among others breach of contract and asking for specific performance of their agreement, an injunction with restraining order, damages, and attorney’s fees. This case reached the Court of Appeals in 2012. There is no Supreme Court resolution of this case as of writing.

THE CONTRACT PERIOD IS TYPICALLY 15–30 YEARS WITH AUTOMATIC RENEWAL FOR THE SAME LENGTH OF TIME OR RENEWAL AT THE SOLE OPTION OF THE CORPORATE INVESTOR. These extremely lengthy periods provide little to neither opportunity for adjustment nor amendment, despite changing conditions. Purchase prices While lengthy contract periods in themselves are not problematic, they become problematic in this case because they are used to rigidly bind the farmers for a long time to the onerous provisions of the contract. For example, the contract stipulates that the buying price is fixed at USD 4.25 28 Page 6. Destiny of Debts. October 2016. 29 G.R. No. 159089. May 3, 2006. http://www.lawphil.net/judjuris/juri2006/ may2006/gr_159089_2006.html. 30 C.A.-G.R. SP No. 70668. 25 October 2010. Decided by the twenty-first division in Cagayan de Oro City.

Good and Bad Practices in the Export-Driven Banana Industry

Table 1 Comparison of prices of Cavendish banana Cooperative

Company

Prices/13.5-kg box (in USD)

Year

HARBCO

Lapanday Food Corporation (LFC)

2.65

2008

DARBCO

Unifrutti

3.30

2008

AMS MARBEMCO

Unifrutti

3.30

2008

CASMIDECO

Sumifru (Philippines)

3.00

2008

2.55-2.75 per 13-kg 2.10/13 kg (Japan)

2008

HARBCO CFARBEMCO

Stanfilco

2.60 per 13-kg box

2008

CFARBEMCO

Unifrutti

2.75 per 13-kg box

2008

CFARBEMCO

Unifrutti

4.05 per 13-kg box

2008-2013

DFC

Sumifru

3.00

2008-2023

Source: JH delos Reyes and W Pelupessy. Agrarian reform in the Philippine banana chain. Discussion Paper/2009-03. Institute of Development Policy and Management. University of Antwerp, Belgium.

per box, even if market prices change. The farmers then are deprived of the opportunity to earn more because the price is fixed over the duration of the contract. To illustrate, the Table 1 shows a comparative table of prices as seen in the October 2016 policy paper by Oxfam and IDEALS entitled Destiny of Debts. There is no readily accessible and existing compilation of data regarding the market prices of the bananas other than those communicated and stipulated by the agri-exporters. For instance, according to DFBGARC farmers, their net buying price is currently at USD 3.47 per 13.5-kg box. For TAGCO, meanwhile, the net buying price for a 13.5-kg class A box of bananas is at USD 4.34, and for 18-kg box at USD 6.54. Because there is no standard pricing mechanism in the Philippine banana industry, the price is often imposed by the buyers. Lease rental rates Another example of restrictive and unfair economic conditions, which bind farmers over length of the contract, is extremely low lease rental payments. To illustrate, the now defunct DFWC executed a lease contract with Marsman Drysdale Organic Farms, Inc. in 1999. The lease contract

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Table 2. Annual lease rental rate per hectare under the DFWC lease Agreement with Marsman Drysdale Year/S Rate Is Applicable34

Rate In Php

1st to 5th year

1999 to 2004

5,000

6th to 10th year

2005 to 2009

6,000

11th to 15th year

2010 to 2014

7,200

15th to 20th year

2015 to 2019

8,640

20th to 25th year

2020 to 2024

10,368

provided for a term of 25 years31 and “shall be renewable at the option of the lessee.” The contract further provides that Marsman as lessee “may, in his absolute discretion and exclusive judgment, terminate [the] lease or its extension at any time by” giving DFWC at least a 30-day notice “or to the time that such termination is intended to take effect.”32 The provisions are silent as to renewal and termination rights, if any, by DFWC. The lease contract covers 95.6453 hectares of land,33 with lease rental rate shown in Table 2. Table 3, meanwhile, shows farmers’ expected income from the lease contract.34 Table 3. Projected income for DFWC under the lease agreement with Marsman Drysdale Annual Lease Rental Rate Per Hectare

Monthly Lease Rental Rate Per Hectare

Expected Annual Lease Rental Income

1st to 5th

5,000

416.67

478,226.50

2,391,132.50

6 to 10th year

6,000

500

573,871.8

2,869,359.00

11th to 15th year

7,200

600

688,646.16

3,443,230.80 4,131,876.96

Year

15th to 20th year

8,640

720

826,375.392

20th to 25th year

10,368

864

991,650.4704 TOTAL INCOME FROM LEASE

Expected Lease Rental Income For Five (5) Years

4,958,252.35 17,793,851.61

31 Par. 2, page 2, Contract of Lease. 32 Id. 33 Par. 3. Page 2. Ibid. However, for 55 hectares the lease term starts on 1 December 1998, while for the remaining 40.6453 hectares, the lease term starts on 1 September 1999. 34 To simplify the chart for the sake of illustration the starting year indicated will be 1999 despite the fact that, as stated in the note above, the lease term for 55 hectares started in 1998.

Good and Bad Practices in the Export-Driven Banana Industry

Over a span of 25 years, DFWC’s expected lease rental is PHP 17,793,851.61 or USD 352,702.71.35 While this amount may ound like a lot, it should be remembered that at the time that the contract was signed, DFWC was composed of 178 farmers. PHP 17,793,851.61 divided by 178 farmers is PHP 99,965.46 for 25 years. Further, PHP 99,965.46 divided by 25 years amounts to an average expected lease rental income per farmer of PHP 3,998.62 per year or about USD 79.26. This computation does not even take into account the various expenses and overhead costs that the farmers as individuals and the cooperative as an organization will incur in the course of their farm operations. It should also be noted that the cooperative has to pay the government the annual land amortization of PHP 22,000 per hectare for 30 years out of the lease payments. Total annual amortization amounts to PHP 2,104,196.60. As of this report’s writing, the cooperative has only fully paid for 10 hectares owing to lack of funds. On 24 February 2017, the lease contract was verbally and unilaterally terminated by Marsman Drysdale over ninety (90) hectares of land citing financial difficulties.36 To the dismay of the farmers, Marsman refused to issue a formal release of the ontract when the farmers requested for the same in April 2017. The letter they had sent to Marsman’s office was deemed not validly received because the signature of the person acknowledging receipt was merely that of a security guard’s. IDEALS assisted the farmers in sending a demand letter reiterating their request. The lease was formally released and terminated in August 2017.

Under these contracts, all the risks and costs of production are typically shouldered by the farmers. For example, a box of bananas damaged during shipment will be charged to the account of the Filipino farmer when it is rejected in the foreign port of destination even if the cause of rejection is beyond the control and without fault of the farmer.37 This is made possible by a vague catch-all 35 Exchange rate used is PHP 50.45 to USD 1.00 on 10 December 2017. 36 The following facts are based on interviews conducted by IDEALS with the NUVILASCO Chairman and Board of Directors conducted on 28 April 2017 at the NUVILASCO office in Mawab, Compostela Valley Province. 37 Under Section 5.5 it states that the farmers are liable to replace bananas rejected at foreign ports at no cost to the company if the cause of rejection is “poor quality of non-compliance with the quarantine regulations and other conditions that necessitated their disposal or made them unacceptable.”

TOTAL EXPECTED LEASE RENTAL INCOME OF DFWC PHP 17,793,851.61

SPREAD OVER

25 YEARS

FOR THE BENEFIT OF

178 FARMERS THAT MEANS OVER 25 YEARS

EACH FARMER IS EXPECTED

TO EARN

php 99,965.46 THIS TRANSL ATES TO

PHP 3,998.62 PHP

PER YEAR OR 332.21 PER MONTH

FOR 25 YEARS!

DWFC FARMERS HAVE TO PAY

PHP 22,000 PER HECTARE

PER YEAR FOR 30 YEARS! TOTAL AMORTIZATION FOR 30 YEARS IS

php 63,125,898

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provision that obligates the farmers to replace the rejected crops at no cost to the company for, among others, “other conditions that necessitated their disposal and made them unacceptable.”38 For example, under the 2014 contract with SUMIFRU, the grower is obligated to undertake the development and introduce improvements on the land to make it suitable for farm production.39 On the other hand, SUMIFRU may, at its option, introduce additional improvements and development of the farm but the cost will be charge to the farmer.40 Additionally, under the same contract the farmer is obligated to “undertake and fund the labor, production, operations, and management of the project as an efficient and productive farm.”41 SUMIFRU is also obligated to “provide fertilizers and chemicals, propping materials, and such other materials required to develop and maintain the project.”42 It should be noted that in the contract referred to above, the words used to describe obligations and duties of the farmers always use mandatory words such as “shall”, while for the company it uses permissive words such as “may,” “at its discretion,” and/or “at the option.” Furthermore, an entire section of the contract is entitled “Undertakings and Obligations of the GROWER” with 13 specific paragraphs. There is no section that lists the undertakings and obligations of the company. Moreover, contracts such as the one discussed above have no provisions for insurance coverage in times of disaster and calamity, which means that the costs and risks of such fortuitous events are also solely shouldered by the farmers. This was the case when Typhoon Bopha hit and destroyed the banana plantations in 2012. The agribusinesses did not provide any support to the affected farmers, forcing the latter to borrow money from banks, which further buried them in debt.

38 Ibid. 39 Exclusive Production and Sales Agreement. Paragraph 3.1. Section 3. Improvements and Facilities. 40 Paragraph 3.2. Id. 41 Paragraph 4 (c). Section 4. Undertakings and Obligations of the GROWER. Id. 42 Paragraph 4 (f). Id.

Good and Bad Practices in the Export-Driven Banana Industry

The glimmer of hope: Looking for best practices SUMIFRUâ&#x20AC;&#x2122;S BABY STEPS TOWARDS GOOD PRACTICES AND FAIR CONTRACTS Although firm in its refusal to renegotiate existing contracts, SUMIFRU entered into a 2017 contract with newly identified and awarded ARBs, the CPI-Banana Planters Cooperative, which had significantly better terms and conditions as compared to the existing contracts with other farmers. The most significant improvement in the contract provisions includes the removal of the takeover clauseâ&#x20AC;&#x201D;that SUMIFRU is no longer the exclusive provider for all farm inputs except for chemicals that pertain to a specific pest, Sigatoka, and that manufacturing costs are now shouldered by SUMIFRU. The positive changes can be divided into two main categories, which are: 1. SUMIFRU is no longer the exclusive provider of farm inputs and other materials except for those related to Sigatoka control under the newest Exclusive Production and Sales Agreement (EPSA) signed in 2017 in favour of one new cooperative only. This is a positive change because when Sumifru was still the exclusive provider of farm inputs and other materials, it did not hold biddings to obtain the lowest possible cost for production. Additionally, SUMIFRU was not transparent as to the costing and the accounting of the same when the costs of inputs and materials supplied were automatically appropriated from the gross profits of the farmers. Another economic concession granted by SUMIFRU to all of its partner farmers is the fact that it now shoulders all manufacturing costs which are essentially packaging and processing costs. 2. A particularly problematic clause that was stipulated in the 2008 and 2014 versions of the EPSA called a takeover clause wherein the company in its absolute discretion and based solely on its opinion that a takeover is necessary, may control the production and management of the farm to the exclusion of the farmers. As stated, this takeover clause still exists in the EPSA 2014. It no longer exists in the EPSA 2017.

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Under the EPSA 2014, the takeover clause can be invoked upon specified grounds43 and with prior notice to the grower 72 hours before actual takeover. The duration of a takeover is for “a period not less than 10 years” and shall continue until SUMIFRU “determines that its volume commitment has been assured” and the loans, as well as advances due to SUMIFRU, shall have been fully liquidated and paid. This is a particularly onerous provision because it automatically makes all advances made by SUMIFRU due and demandable upon receipt of the takeover notice. A very minor improvement under the 2014 provision is the obligation of SUMIFRU to furnish the growers with an annual Statement of Account that the growers can contest within 30 days from receipt. Otherwise, the Statement of Account will be taken as correct and binding upon the grower. The fact that the takeover clause was not incorporated into the EPSA 2017 and its amendment is a significant improvement. Under the amendment to the 2017 EPSA under miscellaneous provisions, the grounds for invoking the takeover clause will now only empower SUMIFRU to “assist the [grower] to handle the management of the operations, among others, at the farm or portions thereof, in behalf of and for the account of the [grower] as the owner of the farm.” IDEALS and Oxfam continue to provide support to engage ARB cooperatives that have contracts with SUMIFRU. The small concessions and piecemeal improvements in the terms, provisions, and practices of SUMIFRU are steps in the correct direction.

43 The grounds are: (1) When there is a need to protect Sumifru’s volume commitment to the international market; (2)When the grower fails, refuses or is unable to follow Sumifru’s prescribed practices regarding farm operations to the extent that crop production is endangered; (3) When condition of the crops or grower’s operations are such that losses are imminent; or (4) Other similar situations.

Good and Bad Practices in the Export-Driven Banana Industry

5 BEST PRACTICES Unifruttiâ&#x20AC;&#x2122;s Good Practices44 THE MCB-MPC INTERVIEW MCB-MPC farmers retain unchallenged control over production and farm management. MCB-MPC stated that Unifrutti expressed that their main role is just as a buyer/ investor of cavendish banana products. Unifrutti has no interest in managing the farm, but it offers assistance and maintains open lines of communication with the farmers. Unifrutti extends regular technical assistance, such as monitoring and soil sampling schedules to farmers. This assistance is provided freely by Unifrutti to boost the production of the farm. They also provide trainings that facilitate knowledge transfer to the farmers. Moreover, farmers can ask for additional training when they see such a need to do so. Unifrutti maintains an open line of communication with the farmers and the leadership of MCB-MPC. MCB-MPC stated that Unifrutti informs them of the practices which Unifrutti approves and disapproves of but leaves the disciplining and other corrective measures to the discretion of the cooperative. MCB-MPC is free to have other forms of livelihood, such as

44 Based on interviews with MCB-MPC and TAGCO.

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banana chips, and they currently operate a beach resort. This is rare and is usually prohibited under the typical investment contract in the cavendish banana industry in the area. Having such alternative forms of livelihood and the creation of value-added products from rejected bananas constitutes a violation of the exclusivity of operations clause in other investment, production, and marketing contracts with corporate investors in the area. Being a violation of typical contract in the industry, it can be cited as ground for taking over operations and management of a farm. The ability to have other forms of livelihood and sources of income enables the cooperative more economic stability and independence, especially during periods where volume of production is low. Alternative sources of income during periods of low production also minimize the instances where farmers need to loan money to finance their farm operations. Most notably, Unifrutti partners enjoy higher buying prices at USD 4.70 per box of regular hands and USD 6 per box for special packs. During the consultation, MCB-MPC Chairman Mr. Efrin Cagumbay shared that each farmer typically earns an upward of PHP 40,000 net income every 15 days.45 This figure is based on their 2015 earnings. Apart from the higher net buying price, Unifrutti also buys special packs that are priced at a premium. This type of product is not available under SUMIFRU contracts. Additionally, Unifrutti also extends a values-formation program at the farm level.

THE TAGCO INTERVIEW Unifrutti buys special packs from the farmers. These special packs contain smaller bananas that would normally be rejected by other investors. It composes an average of 40 per cent of the harvest of the farmers. Likewise, they command a higher price from the regular bananas bought by other investors. Regular banana boxes sell for USD 4.70 per 13.5-kg box, while special packs sell for USD 6.90 per 18-kg box.

45 This figure was also repeated by the cooperative in the Consensus Building Forum organized by IDEALS in September 2017 in Cagayan de Oro City. These figures were also stated in a report by Edge Davao on 6 January 2017. http://edgedavao.net/the-economy/2017/01/06/ banana-coop-comval-wins-tro-vs-unifrutti/.

Good and Bad Practices in the Export-Driven Banana Industry

Unifrutti imposes minimal deductions of just USD 0.3556 per box regardless of the kind of box, special or regular. Unifrutti extends low interest loans to TAGCO for the development and infrastructure of their facilities. Currently they have an outstanding loan of PHP 3 million. If the farmers can repay this within the first year, Unifrutti will not charge any interest. After the first year, the interest is pegged at 6 per cent per annum. This low interest loan is a good practice because it is a readily available financing option for the farmers with no collateral. Farmers typically have problems obtaining loans from banks because they are considered high risk. In the event that they do successfully obtain loans from banks, the typical interest per annum begins at 9.5 per cent. There is a packing plant in the premises of TAGCOâ&#x20AC;&#x2122;s office. This was built by Unifrutti and is owned by it. It, however, grants free access and use of the facilities to farmers. The farmers only spend on maintenance and utilities. Farmers can avail of government programs, support services, and extension services with the support of Unifrutti. There are requirements to avail of programs and services, which include a good track record that is attested to by their investor, Unifrutti. TAGCO can attend trainings, avail of crop insurance for their cacao operations. As mentioned in the MCB-MPC discussion, Unifrutti allows other forms of livelihood for the farmers, including allowing them to intercrop. Intercropping is typically prohibited in other cavendish banana farm

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production and/or purchase agreements. Engaging in the same will be considered breach and grounds for punitive action and enforcement of penalty clauses against the farmers. TAGCO highlighted that through Unifruttiâ&#x20AC;&#x2122;s support, they were able to obtain a truck for their operations through a government programme administered by the Department of Agriculture. The cost of the truck is largely shouldered by the government (90%).

6 CONCLUSION CONTEXT AND POWER ANALYSIS IDEALS, through its analysis of the case studies, has identified the following main issues resulting in irresponsible agribusiness investments: 1. The contracts between farmersâ&#x20AC;&#x2122; organizations and their corporate partners are unfair because they are particularly onerous for the farmers because they absorb and carry all risks and costs of productions but reap no benefits, economic or otherwise. 2. There are flaws in the current policy governing AVAs, such as the fact that there are only administrative rules governing the regulation of contractual relations between agrarian reform beneficiaries and their investors. Aside from problems of actual implementation on the ground due to administrative, budgetary, or due to slow-moving bureaucratic processes, the implementation of rules has also been plagued by political and ideological disagreements from key actors in the DAR. 3. Farmers lack access to support and extension services. The farms are not irrigated and the farmers have no access to credit and financial services. These greatly limit their production and force them to obtain loans from other sources and even from their corporate partners, which impose high interest rates. All the above clearly demonstrate that private sector practices are not guided by values of human rights, inclusivity, and sustainability. The net impact of which is

Good and Bad Practices in the Export-Driven Banana Industry

that farmers are locked into a vicious cycle of debt and poverty, despite their hard and manual labor in a particularly demanding plantation-based industry.

CHANGE GOAL Fair contracts will uphold, respect, and protect the rights of farmers to their fair and equitable share of the profits from their land and labor without impinging on the rights of the private sector to the same.

PATHWAYS TO CHANGE IDEALS has identified three pathways that could change the lives of women and men banana farmer ARBs and their cooperatives. 1. Influencing and engaging the private sector to voluntarily respect the rights of their partnerfarmers and renegotiate the contracts to contain fair and equitable terms and provisions. Engaging the private sector is challenging. During the implementation of the BHR project, private sector companies with adverse impacts refused to agree to even sit at the negotiation table, while companies with good practices stated that it would be best for IDEALS to directly engage their partner-farmers to learn more about the positive impacts of their operations. Additionally, despite clearly identifying the names of the companies in statements to the media, articles in social media, and during conferences, the private sector has not responded in any manner. As such, to indirectly

Fair contracts will uphold, respect, and protect the rights of farmers to their fair and equitable share of the profits from their land and labor without impinging on the rights of the private sector to the same.

Business and Human Rights in the ASEAN

engage and influence the private sector, IDEALS is pursuing awareness-raising and information dissemination to the public to hopefully engage the public and the consumers to put pressure on the erring companies to address the abuses. Work under this change pathway is still ongoing, wherein IDEALS and its partners are still studying how best to reach the Japanese public and consumer through a campaign. 2. Engaging relevant executive government agencies (such as DAR, PARC, and PHRC, among others) through policy advocacy and lobbying. The advocacy work aims to push for faster resolution of pending cases to void unfair contracts, for DAR to improve support and extension services, and to push for movement in the BHR PNAP process. 3. Engaging the Philippine House of Representatives to enact stronger policies that would govern and regulate AVAs through legislative lobbying. Having a law on AVA will provide a stronger and more consistent basis for the regulation and monitoring of AVAs.

CHANGE OBJECTIVES IDEALS believes that change will happen if private sector companies agree to negotiate fairly and openly to execute and implement responsible and equitable agri-invest contracts with their partner farmers. 1. Private sector companies recognize and respect the BHR Framework in guiding their behavior towards more inclusive and sustainable business models and practices. Change will happen when the private sector involved in agri-invest contracts carry out their business operations in a manner that fully respects the human rights of the farmer cooperatives. Full respect of the rights of the farmers include their agrarian, social, and economic rights. 2. The legislative branch passes a bill regulating AVA contracts between farmers and the private sector. A law will empower key implementing government agencies to have more authority to undertake regulation, monitoring and penalizing of erring parties involved in AVAs. An AVA law can also fix the implementation and jurisdictional issues currently being experienced by the DAR.

Good and Bad Practices in the Export-Driven Banana Industry

3. Key executive agencies, such as the PARC, resolve the pending cases involving unfair contracts to void the same. This is a key non-judicial remedy that, when obtained, will grant genuine access to remedy for the cooperatives.

7 POLICY RECOMMENDATIONS For the government: THE HOUSE OF REPRESENTATIVES SHOULD PASS HB 5085. HB 5085 aims to regulate agribusiness contracts called agribusiness venture arrangements (AVAs), that agrarian reform beneficiaries (ARB) cooperatives enter into with agribusiness corporations; as well as safeguard and protect the rights of the ARBs, consistent with the vision of the Comprehensive Agrarian Reform Law. To achieve this, IDEALS recommends the following provisions: 1. The law should have retroactive application to perfected contracts, upon its effectivity. This is required considering the nature of contracts in general. Furthermore, it is better to be stated rather than kept vague and be left to the interpretation of the courts. 2. The law should acknowledge that women are integral part of farmers’ organizations. IDEALS recommends provisions that would promote women empowerment and encourage the participation of women in the affairs and conduct of the organizations. This recommendation stems from the recognition that women’s contribution in a male-dominated industry, such as agriculture, is undervalued and invisible. Women’s economic participation in the industry is also further limited by socio-cultural aspects, such as gender norms and roles. This is particularly true in rural communities. Women’s work is largely seen as an extension of their reproductive and domestic functions at home. The gender gap also exists for many assets, inputs, and services, including land, livestock, labor, education, extension and financial services, and technology. This reality is also predominantly true in the banana industry.

THE HOUSE OF REPRESENTATIVES SHOULD PASS HB 5085. The law should have retroactive application The law should acknowledge that women are integral part of farmers’ organizations.

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RA 9700 RA 9700 amended the policies and principle of the agrarian reform program to include the state recognition of “the rights of rural women to own and control land, taking into consideration the substantive equality between men and women as qualified beneficiaries, to receive a just share of the fruits thereof, and to be represented in advisory or appropriate decision-making bodies. These rights shall be independent of their male relatives and of their civil status.”46 The amended version of the law also included a definition for the term rural women as follows “[r]ural women refer to women who are engaged directly or indirectly in farming and/or fishing as their source of livelihood, whether paid or unpaid, regular or seasonal, or in food preparation, managing the household, caring for the children, and other similar activities.”47

LACK OF ACTIVE PARTICIPATION OF WOMEN The continued lack of active participation of women is attributed to several reasons: 1. The companies or banana exporters that limit their participation such as through contractual provisions that specify that only males are allowed to become farm workers due to the perception of the inability of women to meet the physical capacities and demands of the labor intensive banana production 2. Women’s avoidance of responsibilities due to ascribed gender norms and customs

The agrarian reform program of the Philippines is a classic example wherein male heads of households were preferred over their female counterparts in the identification and distribution of land titles under the said program. This was remedied by the subsequent amendment of the law by virtue of Republic Act No.(RA) 9700 in 2009 which came twenty-one (21) years after the enactment of the original law which was RA 6657.4647 Under the GRAISEA programme, Oxfam supported a household survey conducted in Compostela Valley province, where 64.3 percent and 35.7 percent of the respondents were from the municipalities of Compostela and Monkayo, respectively. The following insights were drawn by IDEALS as follows: Translating these into more concrete issues, women’s marginalization in the discourse of agriculture can be attributed to their: 1. Multiple responsibilities within and outside of the home, women’s poverty goes beyond monetary to include their low status in their households and communities. It limited their mobility and participation in local, national, and international decision-making processes; 2. Discriminatory socio-cultural norms and practices which have limited women’s exercise of their human rights as well as limited their opportunities for development. 3. Lack of power in terms of knowledge, skill, experience and/or confidence to engage in, influence, or transform as the case may be, scientific, technological, and political arenas. Many of the women expressed their concerns regarding their cooperatives—how it is run—but when offered a position to be part of leadership, the women shy away from such roles. The women believe that they should be an integral part of the banana industry but, at the same time, they also believe that have little say and sway as to how the management of the cooperatives. Closing the gender gap in agriculture will actually generate significant gains for the agriculture sector and for society as a whole. Generally 46 RA 9700. Section 1. 47 ID. Section 2..

Good and Bad Practices in the Export-Driven Banana Industry

speaking, if women have the same access to productive resources as men, an increase in yield from their farms by 20–30% is possible.48 4. The law should create a highly decentralized process of approval and review at the regional level for all agreements. Furthermore, a 90-day processing period should be imposed on the DAR. The review of the contract should be guided by established parameters of legal, operational and financial feasibility. There have been reports that the AVAs, in general, have been prepared by the private sector company counterparts and accepted by the farmers without the benefit of proper legal review or advice by DAR. This goes without saying that the ARBs should be included in the consultation process with DAR. This capacitates DAR and at the same time puts the onus to strengthen its review processes and to put an end to the uncertainty created by delays in the review and approval process, especially for contracts that have to be approved at DAR Central Office. Decentralization is important in addressing and overcoming the barriers currently encountered by the farmers in accessing remedies that will address and redress the business-related abuses they experience, and hopefully prevent and protect them from such future abuse. The decentralization will significantly lessen the formalities and processes that need to be undertaken by the farmers in order to access remedies in fact. This, in turn, will necessarily also lessen the length of time needed and expenses incurred by the farmers. One of the benefits of decentralization include improved access of communities and persons

3. Lack of knowledge and skills of women regarding technical and scientific farming know-how; the multiple burden of women as primary carer of the home while also being expected to contribute to the income-generating pursuits of the household.

If women have the same access to productive resources as men, an increase in yield from their farms by 20–30% is possible.

Recommendations specific to women in agriculture Laws, policies of cooperatives: • Review of the enabling policies that affect and might help women in agriculture. • Policy reform for cooperatives to effect genuine inclusion of women in the leadership, creating spaces/provisions for women, (maternal/health) and also men (paternal leaves). • determine if the AVAs have gender provisions or if the same are gender blind or unfriendly At the cooperative level • Women training on gender also with men • Additional upgrading on farming skills for women, new appropriate technology • Management and leadership training for women

48 UN FAO. 2011. http://www.fao.org/news/story/en/item/52011/icode/.

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that encounter significant barriers to the much needed services and/or resources. The groupS of people that typically encounter such barriers are the marginalized sectors of society and those in far-flung and underdeveloped poor rural communities.49 Decentralization will also enable a faster distribution of the remedy and will enable the agencies to address the concerns and conflicts at the earliest possible stage before they escalate.50 Quick and genuine access to remedy will also ensure that businesses will be held accountable for existing human rights abuses, which in, turn and by extension, will also help prevent future abuse. In fact, Decentralization was also one of the key recommendations of the Multisectoral AVA study done by the UN FAO in 2016.51 Specifically the authors recommended that the process of approval of future AVAs and review of existing AVAs by DAR be decentralized and simplified.The study posits that this decentralization will force DAR to strengthen its review process. It also posits that the 90-day period will eliminate much of the uncertainty in the process caused by delays incurred when the farmers have to wait for action on processes by the national or central office of the DAR. 5. The law should incorporate bail out and rehabilitation to AVAs that will be revoked, like in the case of HARBCO. HARBCO was the subject of a Joint Committee Investigation in Aid of Legislation in 2014. The same came committees came out with the recommendation for Landbank and other government financial institutions to bail out the loans of HARBCO to LFC, subject to the results of the independent third party audit, and to grant/ provide a Rehabilitation fund to HARBCO. 6. Section 12 of HB No. 5085 states that the law â&#x20AC;&#x153;may provide support services for ARBS entering an AVA.â&#x20AC;? 49 http://www.fao.org/tempref/docrep/fao/006/ad697e/ad697e00.pdf. 50 The discussion of Batty, et al. was actually on operational grievance mechanisms which should precede any state based non-judicial and/ or judicial remedies. However, the same principles apply that at the local level the adverse impacts can be much earlier addressed before they escalate if the only genuine remedy can be found at the national or central level. http://www.standardizations.org/bulletin/?p=820. 51 http://www.fao.org/3/a-i6239e.pdf.

Good and Bad Practices in the Export-Driven Banana Industry

However, the law should likewise include those already entered into. Further, training should be all-encompassing and not limited to economic production alone, but include necessary skills to run farms and manage their land (i.e., business management, administration, contract negotiation, and basic legal and technical knowledge.) Furthermore, support services should include financial support for farm inputs and outputs if the need arises. Financial support provided by the government should be at a reasonable financial cost to the farmers, which is at the minimal cost. Moreover, requiring the ARBs to enter into production contracts with investors in order to avail these financial support should not be sanctioned. The current practice forces the ARBs to be under the control of the investors. 7. The law should incorporate international guidelines (e.g., Voluntary Guidelines on the Responsible Governance of Tenure, Principles for Responsible Agricultural Investment, and United Nations Guiding Principles on Business and Human Rights). 8. HB No. 585 should grant incentives to investors, such as multinational private sector companies, to encourage them to provide more corporate social responsibility funds and/or support to the ARBs in the form of livelihood, education, health, and shelter, among others. 9. The law should provide a sunset clause in the House Bill. This will allow a mandatory review in the near future. The importance of regular monitoring on compliance is optimum.

THE DAR AND OTHER KEY IMPLEMENTING AGENCIES SHOULD MONITOR AND REGULATE PRIVATE SECTOR COMPANIES ENGAGED WITH ARBS THRU AVAs. 1. Given that the nature of CARP is to provide social justice and industrialization to ARBs, these private sector companies should also be monitored and regulated. It is recommended that regulatory bodies that have control over reportorial documents of these companies should be part of the inter-agency technical body that would monitor AVAs (e.g., Securities Exchange Commission and Department of Trade and Industry).

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2. DAR should also facilitate open and transparent contract negotiations between agribusiness corporations and banana farmers, banana farmers’ cooperatives in Compostela Valley, and other areas in the Davao Region. 3. DARAB, PARC, and NAEC should revoke unfair contracts and expedite resolution of pending cases under their jurisdiction. 4. The DAR and all other key implementing agencies should fulfil their mandate of providing comprehensive support services to especially to farmers who already own the land.

THE ROLE GOVERNMENT FINANCIAL INSTITUTIONS, SUCH AS THE LANDBANK, IN FINANCING PRODUCTION LOANS SHOULD BE REVIEWED . Under the current process, the loan is granted to ARBs but is credited directly to a special bank account in the name of the partner private sector company established for that specific purpose where it can set off all costs that it advanced as payment for production costs. All of the charges to the account are the obligation of the ARB. The ARB cooperative absorbs all the financial burden of the loan, interest payments, and penalties, apart from the interest charged by the private sector company on top of the interest rate charged by the Landbank. Thus, apart from the already burdensome AVAs, the ARBs also carry an additional obligation to pay with the banks. The questions that should be asked are: “What is the added value of the private sector company in the process? “What is the relationship of the private sector company with Landbank?” “Will it be possible to direct all transactions to the ARBs without the private sector company as intermediary?”

TOGETHER WITH OUR PARTNER BANANA FARMER COOPERATIVES, WE ARE CALLING ON THE PRIVATE SECTOR, PARTICULARLY THE AGRIBUSINESS CORPORATIONS IN THE BANANA INDUSTRY TO: 1. Conduct meaningful consultation and renegotiate fairer contracts with farmers to adjust or revise provisions with the end in view of providing full

Good and Bad Practices in the Export-Driven Banana Industry

protection of the rights and privileges of the farmers as ARBs, and installing regular economic assessment mechanisms and ensuring adaptability to changing market conditions. Raise the price of bananas to reflect current market conditions in order for farmers to gain a reasonable share in export incomes, as well as institute an effective price setting mechanism to ensure that the farmers get a fair share of the gains and benefits of the enterprise. Shoulder a fair share of the risk and cost of production by providing risk insurance to help farmers cope with weather-related disasters and calamities.

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