Realizing Responsible Investment in Agriculture: What can policy-makers in Africa learn from Southeast Asia?
Globally, there has been positive momentum to develop and implement new national laws and international guidance frameworks to promote “responsible” investment in land and agriculture, but Africa still lags far behind other regions in responsible investment practice. Today, large-scale land-based agricultural investments still entail many human rights and environmental risks that could be avoided or mitigated. Why is this still happening, and how can policy-makers reverse this trend?
Despite significant progress, Africa still has a long way to go to make responsible land-based investment commonplace, including in agriculture. A recent report by the Land Matrix Initiative details the scale of the problem, revealing that a majority of the land deals assessed in the region—730 in total, spanning sectors from food and biofuels to mining and tourism—have limited measures in place to respect human rights. Compounding this challenge is that these deals often show a low regard for legitimate tenure rights, including informal tenure of Indigenous peoples and local communities, unlawful expropriation of communities without compensation, and weak consultative processes.
These challenges persist despite the positive momentum seen both globally and regionally to respond. To date, many governments have been working to develop new national laws and non-binding international guidance frameworks that aim to promote “responsible” investment practices in land and agriculture, namely those investments that contribute to the local economy, create quality jobs, and improve livelihoods. Responsible investments also serve to enhance food security, support local infrastructure, protect natural resources, and safeguard the rights of local communities, including their land tenure rights.
At the global level, notable examples of guidance frameworks with responsible agricultural investment as their goal include the 2012 Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests (VGGT) and the 2014 Committee on World Food Security Principles for Responsible Investment in Agriculture and Food Systems (CFS-RAI). Given the current state of land-based investments in Africa, the Land Matrix Initiative report urges African countries to adapt these global frameworks to the local context and then start updating current investment practices accordingly.
To make this happen, African countries can already look to examples from other regions that have adapted these international principles for their own needs and circumstances—for instance, the 10 countries that make up the Association of Southeast Asian Nations (ASEAN). These countries, which vary widely in the size and structure of their economies, along with their levels of economic development, have developed an ASEAN-specific version of the CFS-RAI and are now looking to translate these regional principles into practice.
Curbing Risks to Human Rights, Environmental Protection
International guidelines on responsible agricultural and land investments emerged over the past decade following a “land rush” in 2009–2010 in the Global South, which emerged in response to a spike in world food prices in that same period. The pace and scope of these large-scale land acquisitions fuelled concerns of potential human and environmental abuses. In turn, governments negotiated and adopted voluntary guidelines to help foster responsible approaches to these investments, including the above-mentioned VGGT framework and CFS-RAI principles. While similar in their underlying objectives, the two initiatives take different, complementary approaches to achieving this goal.
The 10 CFS-RAI principles encourage governments to create an enabling environment for responsible private sector investment in agriculture and food systems. In particular, they provide guidance for actions to address various environmental, social, and economic issues. For instance, they emphasize governments’ role and responsibility to set standards for investors to respect human rights, including appropriate safeguards that protect the specific needs and interests of smallholders and the labour rights of all agriculture and food system workers.
Similarly, the VGGT framework highlights the need for governments to consult with all relevant stakeholders, especially the most vulnerable, in the monitoring, assessment, and reporting of land-based investments. The framework also emphasizes that investments should do no harm, should safeguard against dispossession of legitimate tenure right holders and environmental damage, and should respect human rights.
Both the CFS-RAI and VGGT encourage investors and governments to conduct due diligence assessments, engage in equitable and transparent practices, and consult with relevant stakeholders. The VGGT takes this effort one step further by emphasizing that governments and investors should ensure inclusive engagement with local communities and other stakeholders who could be affected by an investment before any investment decisions are made and should respond to the contributions accordingly.
Adapting Global Guidelines to Regional Needs: The ASEAN story
In 2018, agriculture ministers from ASEAN’s 10 member states decided that to fulfill the objectives of the CFS-RAI in their countries, there needed to be a version of those guidelines adapted to their specific needs. As a result, the ASEAN Guidelines on Promoting Responsible Investment in Food, Agriculture and Forestry, known as the ASEAN RAI, became the CFS-RAI’s first regional iteration.
While the ASEAN version is broadly aligned with its global counterpart, there are important changes that were made to better suit the region’s realities and challenges. For example, the ASEAN RAI includes a greater focus on climate change and natural disasters, as well as the roles of technology and regional approaches. These guidelines are also influencing the harmonization of laws across ASEAN member states in areas such as investment, land, agriculture, environment, human rights, and labour, thus helping simplify cross-border investment by creating a predictable regulatory environment throughout Southeast Asia.
Due to the high levels of intra-ASEAN foreign direct investment, the ASEAN RAI principles also have a dedicated section with recommendations for home states on due diligence of investors and the promotion of responsible business conduct. This is a key innovation of the ASEAN RAI compared to what the CFS-RAI covers. This section of the ASEAN RAI aims to help ensure that foreign investors’ home states—the countries where they come from—are responsible for holding their investors accountable for their practices abroad when making land-based investments.
What makes the ASEAN RAI principles especially notable is not just that their content is tailored to regional circumstances, but that there is also a high degree of political will and buy-in from member state governments to implement these principles. The sustained effort by governments has been a continued driver for this regional initiative, with ASEAN member states now putting in place a dedicated institutional architecture to steer the process as they move into implementation.
Part of this architecture involves an initiative known as the Alignment Assessment Tool, which is a self-scoring system with a built-in peer review function. The tool provides a way for ASEAN member states to assess how well their legal, policy, and institutional frameworks align with the ASEAN RAI guidelines.
The countries that have piloted the rollout of the Alignment Assessment Tool—Indonesia, Viet Nam, and Cambodia—have found using the tool has other unexpected benefits. For instance, it helps with inter-agency coordination, builds cross-government awareness on responsible agricultural investment, and highlights the need to consolidate the full range of relevant laws and policies and house these in a single access point for investors and policy-makers alike.
Learning From One Another: Fostering an Africa–ASEAN exchange
There are many contributing factors that have led to poor land-based investment practices in Africa. These range from poor compliance by investors with investment and land laws, leading to a lack of respect for human rights and legitimate tenure rights, to the lack of strong institutional frameworks to screen and monitor investments so that these risks can be mitigated.
While all of these factors are important, the poor uptake of international guidelines by governments in their national policies and practice is one of the biggest overarching issues, given that these same guidelines seek to tackle many of these problems. African governments need to prioritize the uptake of these international guidance frameworks. This will mean adapting these frameworks to regional and national contexts and from there incorporating these principles into policy and practice.
To make this happen, African governments must first have a clear understanding of the VGGT and CFS-RAI and their respective objectives. Then, they should look to other regions, like ASEAN, that are already testing what regional versions of these frameworks can look like. This is a valuable opportunity for setting up a peer-to-peer learning process between African governments and their ASEAN counterparts, especially with the ASEAN work still in its early years. African governments can therefore track the evolution of the ASEAN RAI’s implementation from its initial stages onward, including the lessons learned through the Alignment Assessment Tool.
There are already regional bodies in Africa that could host this peer-to-peer learning process. If the entire continent wants to engage in this learning process, the African Union Commission could take the lead. Otherwise, Africa’s various regional economic communities can take this work on and adapt it to their respective needs.
While crafting Africa-specific guidelines would be a large undertaking, there are valuable precedents in the African context for crafting guidelines for land-based investments that are customized for regional needs. African countries were among the first to develop regional guidelines to promote responsible investor and investment practices in land back in 2009. These were endorsed at an African Union summit of heads of state and governments years before the VGGT and CFS-RAI were developed. As they look to develop an African version of the CFS-RAI, African governments could also take this opportunity to update their own existing regional guidelines in line with newer emerging issues and trends that are influencing the intensive use of land by investors.
Ensuring an African RAI Can Succeed
While developing a regional framework for integrating international guidelines is important, it cannot succeed without a clear legal framework at the national level for responsible investment practice. This could entail local laws or regulations and should also involve strong compliance mechanisms.
In matters of compliance, this also means having inclusive and accessible local institutions in place, such as mediation processes and courts, to address any grievances that may arise before, during, or after an investment. This is especially important given the mounting evidence of human rights abuses, community displacement, food insecurity, environmental degradation, and gender inequities associated with land-based investments in the region.
To further promote responsible investment, African governments should work toward a fully CFS-RAI-aligned investment approval process, from early screening to community engagement and impact assessments, through to the final contracting stage. This is critical, as many socio-economic and environmental issues arising during an investment’s implementation could be prevented through rigorous due diligence and environmental and social impact assessments prior to the investment’s approval. Governments will also need to determine how to include local communities in discussions and decision making about the awarding and operation of land-based agricultural investments.
With African countries still showing little improvement in responsible investment practice in land and agriculture, the temptation for investors to carry on with “business as usual” could be great, especially given the economic impact of the COVID-19 pandemic, the war in Ukraine, and rising global food prices. In light of these other challenges, governments may be less likely to worry about whether agricultural investments are responsible. Some reports are already showing the rollback of human rights and environmental safeguards in land investments in recent months on a more global scale. However, unlike during the 2009–2010 land rush, there are now international and regional approaches that governments can and should use to help inform the way forward.
For more information or queries on the ASEAN RAI Alignment Assessment Tool, please contact IISD’s Agricultural Trade and Investment team.
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