Download lessons learnt in Lao - Land Info Working Group

Large-scale investment on
land: LESSONS LEARNT FROM
VIETNAMESE INVESTMENT ON
AGRICULTURE IN LAO
Dr. Pham Quang Tu – Oxfam in
Vietnam
Vientiane, 14 March 2017
PRESENTATION OUTLINE
1. Overview of Vietnamese outbound investment
2. Field research findings
3. Recommendations to improve responsible
business investment
Page 2
OVERVIEW OF VIETNAMESE
OUTBOUND INVESTMENT
Context of Vietnamese outbound
investment
• Outwards investment of Vietnam has been increasing both
number of project and capital, during period 1989- 2015:
• Total of 1,049 outward investment projects;
• Total registered capital nearly 21 billions USD;
• Mekong sub-region, especially Lao and Cambodia are most
popular destination of Vietnamese outward investment;
• Agriculture – forestry – fishery is the second largest of
Vietnamese outward investment, after mining;
• In coming time, Vietnam will revise the Prime-minister Decision
236/QĐ-TTg dated 20/02/2009 on promotion of outward
investment
Outbound investment is strategic and promoted
Page 4
Top 10 destinations of Vietnamese
outbound investment*
6,000
5,000
Number of projects
250.0
Registered Capital (Million USD)
210.0
4,949
4,000
200.0
157.0
150.0
3,484
128.0
3,000
100.0
2,405
2,000
1,825
1,337
1,000
11.0
2.0
6.0
Venezuela
Peru
0
Laos
Cambodia
Russia
*: Cumulative until 31/12/2015
1,262
1,221
12.0
558
1.0
Algeria
50.0
41.0
472
3.0356
-
Malaysia
USA
Myanmar Tanzania
Source: GSO, 2016
Page 5
Top 10 economic sectors of
Vietnamese outbound investment*
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
250
8,937
197
116
73
200
150
116
100
3,121
2,230
10
56
1,835
Number of projects
*: Cumulative until 31/12/2015
4
1,163
33
25
606
50
29
569
492
265
Registered Capital (Million USD)
Source: GSO, 2016
Page 6
132
0
INVESTMENT IN LAO PDR
No.
Sector
No. of
Projects
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Electricity, gas, steam, and air conditioning supply
Agriculture, forestry and fisheries
Arts, entertainment and recreation
Mining and quarrying
Financial, banking and insurance activities
Manufacturing
Construction
Real estate activities
Accommodation and food service activities
Information and communication
Wholesale and retail trade; repair of motor vehicles
Water supply, sewerage, waste management and remediation
Professional, scientific and technical activities
Human health and social work activities
Education and training
Transportation and storage
Administrative and support service activities
Other activities
Total
6
47
2
66
9
56
15
5
4
5
22
3
5
3
2
3
1
4
258
Source: Vietnam Ministry of Planning and Investment, June 2016
Investment
capital (USD)
1,297,029,850
1,048,753,284
1,004,500,000
954,161,275
208,628,000
107,449,057
63,343,881
50,700,999
48,210,289
42,040,000
40,656,845
9,371,204
3,975,000
1,630,000
1,346,700
1,071,050
300,000
50,375,000
4,933,542,434
Page 7
FIELD RESEARCH
FINDINGS
RESEARCH VISITS
1. Government Agencies: Ministry of Agriculture and
Forestry; Provincial and district agriculture and forestry
departments in Attapeu, Champasak, Savannakhet
provinces
2. NGOs: Global Association of People and Environment
(GAPE), Japan International Volunteer Center, AVIL, IDP
3. Companies: Hoang Anh Gia Lai, Tin Nghia, Viet – Lao
Rubber company, Vietnam Rubber Group
4. Local communities: Four communities in Attapeu,
Champasak, Savannakhet provinces
5. In Vietnam: Headquarters of companies under VRG, Tin
Nghia, HAGL
Page 9
BENEFITS OF VIETNAMESE
INVESTMENT
According to Vietnamese authorities:
1. Investment in Laos and other countries helps Vietnam’s economy
to integrate deeper in the global economy;
2. By investing in the neighboring countries, Vietnam can enhance
its role and status in regional and bilateral relations;
3. Vietnamese businesses can gain more experience in overseas
direct investment so that they can explore investment
opportunities in other countries in the region and international.
According to some Lao authorities:
1. Contribute to GDP growth; add tax resources for governments to
use for public services
2. Employment for local people
3. Contributions to socio-economic development through the
construction of schools, clinics, hospitals, roads…Page 10
CHALLENGES: Project
preparation phase
1. Investors are aware of main procedures for investment in
2.
3.
4.
5.
Lao PDR. However, procedures are subject to change
Many projects approved at national level with little
coordination to local authorities, while some land deals made
with head of village without report to proper authorities
Investors lack of proper investment plans and feasibility
studies
Communities often unaware of investments affecting them.
Little public consultation on EIA.
Limited monitoring and compliance by National Assembly or
NGOs.
Page 11
CHALLENGES: Land
acquisition & compensation
1. Disputes over land boundaries are common; maps are
2.
3.
4.
5.
old or unclear
Companies often begin clearing land immediately after
licensing
Law requires compensation but rates are ad-hoc
Villagers lack information about rights and contracts
Many villagers lack land title; no compensation for
untitled land (such as forest)
Page 12
Cultural conflict in land clearance
A local cemetery within the area of a Vietnamese investor’s
plantation was violated by the company. According to the local
people, the village’s cemetery, used to include 47 gravesites. The
company flattened the whole area, leaving only one big tree still
alive in the area that used to be the cemetery. Although the people
reported this, it did not persuade the company, who responded that
Lao people do not have cemeteries but cremate their dead.
Actually, this is true for the ethnic Lao majority, but not for the Brau
ethnic people in this area who bury the dead according to their
traditional customs. Up to now, the company has not taken any
responsibility for destroying the graves (The locals also reported
the two staff who flattened the graves).
(Field research in Attapur, May 2016)
Settlement of compensation in Attapur
Compensation for land loss at the local level is either settled
between land owners and companies directly, or negotiated
in a consultation conducted by the chairman of the province
and a land clearance committee composed of relevant
stakeholders, with participation of local households.
In one village, people said that the compensated amount
was equivalent to people’s revenue for one season of
cultivation on that land; typical compensation rates varied
from 3-5 million kip (about US $360 -600) per ha for rice
farming land and 200,000-500,000 kip ($24-60) per ha for
land close to the forest. The villagers said that it would cost
them 60-100 million kip ($7,250-12,090) per ha to obtain
land elsewhere.
Page 14
CHALLENGES: Project
implementation
1. Evidence of infrastructure improvements
2. Law requires that 90% of workers are Lao, but many
3.
4.
5.
6.
7.
companies say they are unable to recruit local workers
Many local workers lack contracts and social security
Living conditions for workers cited as poor
Extensive use of pesticides and herbicides
Most of interviewed companies said the “CSR” is helping to
build some basic infrastructures and provide charity in the
important occasion. No company has a clear CSR policy
Some companies started to think and apply wider concept
about CSR.
Page 15
Corporate Social Responsibility (CSR)
• “In my point of view, CSR policy means that labor use must be
accompanied by technical training; labor protection policies must
be applied for workers doing hard jobs; and we must ensure that
we contribute to the development and construction of public works
and comply to Lao policies and laws including tax.
• “I have just been assigned here for a month and a half, but I
observe that there are more than 30 children who are not going to
school, since they follow their parents who are working on the farm.
So, in the coming time, the company will organize Lao language
classes for them. I and my staff will also participate in this class to
communicate better with local communities.”
(A Vietnamese investor in Laos)
RECOMMENDATIONS TO
IMPROVE RESPONSIBLE
INVESTMENT
Understanding the Responsible
Investment
Voluntary contributions to
community development,
charity and other social
and environmental efforts.
Traditional understanding of CSR
Understand and address
business impact on society,
to avoid adverse impact and
maximize the benefits for all.
Responsible Investment
Improve responsible investment
1. Strengthening government policies, policy
enforcement and companies’ compliance.
Article 51 on Vietnamese 2014 Investment Law regulate:
“Investors making overseas investments shall comply with
this Law, other regulations of law, laws of the countries
or territories in which investments are made
(hereinafter referred to as host countries), and the
international agreements to which the Socialist Republic
of Vietnam is a signatory, and take responsibility for
overseas investments they make”.
 EIA, FPIC, land acquisition & compensation, conflict resolution…
2. Voluntary guideline for Vietnamese outbound
investment in agribusiness
Page 19
Outline of voluntary guidelines
Opening
•
•
•
•
Acknowledgements
Pioneers Group Introduction
Guideline introduction: Objectives, Scopes, Usage
Principles-based Approach
Content
• Recommendations for each stage of the investment process
• 20 Examples
Annexes: Useful information
•Some Conflicts Resolutions Mechanism
•Laws on related investment (Vietnam, Laos and Cambodia Laws, international
human rights treaties,)
• International safeguards policies, Guidelines for reference
•Useful contacts
Principles-based approach
PROTECT
Based on UN
Guiding
Princinples on
Business and
Human Rights
National Laws of
companies in business
relationships
Policies from financial
fundings
Home country’s Laws
Company policies
through its business
relationships
Host country’s Laws
International Human
Rights Laws
People and Nature
Reconciliation
Guideline Framework
Land
Labor
Environment
Culture/
Indigenous
Peoples
Investment steps
Preparation
Implementation
Closing
Risk Identification
Recommendations
How-to-do
References and Examples