1. GUIDANCE INSTRUMENTS FOR RESPONSIBLE INVESTMENT IN AGRICULTURE: AN OVERVIEW Pascal Liu Trade and Markets Division Food and Agriculture Organization of the United Nations FAO Investment Days 17 December 2014

2. More investment in agriculture is indispensable for food security and poverty eradication, in particular more investments by farmers and public sector More investment by companies is also indispensable Agricultural investment can bring various benefits to host countries (job creation, higher productivity, value addition, higher incomes, etc.) But some forms of investment carry risks and have attracted international criticism Why do we need guidance on responsible investment in agriculture?

3. 3 Source: NZHerald.co.nz Rising concerns over large-scale land acquisitions Not only in developing countries…

4. Risks for local community where land rights are unclear & governance is weak: reduced access to natural resources negative impacts on rural livelihoods displacement of local smallholders no or inadequate compensation social fragmentation, civil conflict Environmental risks Also risky for investors: high transaction costs & local opposition => Governments and investors have asked for international guidance Why do we need guidance on responsible investment in agriculture?

5. Maximizing the benefits of agro-investment & reducing its risks A variety of guidance instruments exist or are under development: 1.Private 1.Corporate level 2.Industry level (Equator pples, EITI) 3.Investor groups (e.g. Farmland pples, PRI) 2.Public 1.National level (e.g. US, Germany, …) 2.International 1.Agency level (e.g. IFC Performance std) 2.Inter-agency level (e.g. PRAI) 3.Intergovernmental initiatives 1.Regional blocs (e.g. AU Land Policy Framework & Guidelines) 2.Other country groups (e.g. OECD)

6. Maximizing the benefits of agro-investment & reducing its risks 3.Multi-stakeholder processes 1.Industry/NGO lead (e.g. RSPO) 2.UN agency lead (e.g. UNGC Food & Agriculture Business pples) 3.Intergovernmental lead –CFS voluntary guidelines on responsible governance of tenure –CFS pples on responsible investment in agriculture & food systems

7. Started in 2012, endorsed Oct. 2014 after an inclusive consultation process Broad scope: “all types of investment in agricultural value chains and food systems “ –“[...] include foreign and domestic, public and private, small, medium and large scale investments.” –potential users: “all stakeholders that are involved in, benefit from, or are affected by agricultural investments[...]” 10 principles Build on existing instruments including VGGT, the Voluntary Guidelines on the Right to Food and PRAI CFS principles for responsible investment in agriculture and food systems (CFS-RAI)

8. Proposed by FAO, IFAD, UNCTAD & World Bank in 2010 A response to the challenges of large-scale land acquisitions and the need for increased agricultural investment Voluntary Can help governments develop laws & negotiate agreements May be used as “checklist” when assessing projects A “living document” to be updated with the results of ongoing research and field-testing Endorsed by the G20 & G8 Principles for Responsible Agricultural Investment that respect rights, livelihoods & resources (PRAI)

9. Voluntary practical guidance for investors Synthesis of existing standards of RBC to help investors identify risks and avoid infringing such standards => not a new standard but a practical tool to help implement existing ones Due diligence to support investors in preventing and mitigating adverse impacts Emphasizes how investors can work with governments and civil society to conduct business responsibly Process guided by multi-stakeholder advisory group To be completed by June 2015 OECD-FAO Guidance on responsible business conduct (RBC) along agricultural supply chains

10. Very similar core elements: food security, tenure rights, transparency and accountability, consultation and participation, rule of law, social and environmental sustainability Scope of CFS RAI wider in terms of: – types of investments – intended users – contents (provision of public goods, genetic resources, youth, indigenous peoples) PRAI & CFS RAI: how different are they?

11. CFS RAI: – all investments – insist on food security & smallholders PRAI: – all investments, with focus on large-scale primary production – more detailed guidance to maximize benefits and reduce risks => Complementary instruments in many respects PRAI & CFS RAI: how different are they?

12. Field testing in developing countries Develop more operational/specific recommendations Develop synergy Build partnerships with all stakeholders Next steps: how to make these tools operational?

13. Thank you www.fao.org/economic/est/issues/investments www.responsibleagroinvestment.org