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CommentMatrix:SECU0002,AComplianceReportrelatedtotheBusinessCalltoActionProjectSocialandEnvironmentalComplianceUnit,OAI,UNDP
Row Paragraph
#/Section/GeneralofReport
Comment Submittedby SECUResponse
1.
General
We believe that the report shouldrecommend that Bidco be removedfrom Business Call to Action eitherpermanently or until further duediligenceisdoneonthecompany.Webelieve that this is the right decisionbased on the results of the draftreport, which suggests that internalUNDPduediligenceprocedureswerelackingandthatBidcocouldbeariskypartner.
BugalaFarmersAssociation,JohnMuyisa
ReportrevisedtoincludearecommendationthatUNDPprovidedocumentationconsistentwithUNDP’sfullPolicyonDueDiligenceandPartnershipswiththePrivateSector,completeRiskAssessmentTool,andGuidance,toensurethatduediligencewithrespecttoBidco’smembershipinBCtAisadequateandoutcomesofduediligencesupportBidco’smembershipinBCtA.
2.
General
Despiteawell-publicizedinvestigativephase:theDraftComplianceReportstubbornlyrefusestoacceptandpubliclyacknowledgevitalfactssuchas:ThattheallegationsmadeinthecomplainttoUNDPareWIDLYexaggerated.
BidcoAfricaandBidcoUganda,PharisKimaru
AsnotedintheTORfortheinvestigationandinthedraftinvestigationreport,adetailedexaminationofhumanrights-relatedconcernsunderpinningthecomplaintwerebeyondthescopeoftheinvestigationandnotwithinSECU’smandate.SECUismandatedtoexaminecompliancewithUNDPstandards,themostofrelevantofwhich,inthiscontext,werethoserelatedtoduediligence.SECUexaminedallegationsrelatedtoduediligence–thisexaminationrevealedthathumanrights-relatedconcernsdidnotappeartobeconsideredfullyduringduediligence.SECUpursuednodetailedexaminationoftheseissues,andthereportdrawsnoconclusionsrelatedtoanyunderlyinghumanrightsclaimsoranyissuesrelatedtolegalcasespendingbeforetheUgandancourts.
3. General
TheDraftreportconvenientlyfailstoreportthatoutoftheacquisitionof
BidcoAfricaandBidco
Seeresponseabove.SECUdidnotmakeanydeterminationsrelatingtoland-grabbing/humanrightsviolations,including
2
8,500acresonly25hectaresisindispute.
Uganda,PharisKimaru
theamountoflandindispute(numbersprovidedtoSECUvariedwidely,anditwasoutsidethescopeofSECU’sinvestigationtodeterminethecorrectnumberindispute).
4.
General
ThatthelandindisputehasnotbeenusedortouchedfortheOilPalmProject.(Evidenceofthiswasprovidedtotheinvestigators.)Thatthereforetheclaimsoflandgrabbingandgrossviolationofhumanrightsarenotapplicabletothissetoffactswhichthereportdoesnotdisputeorcontradict.
BidcoAfricaandBidcoUganda,PharisKimaru
Asnotedinthereport,duediligencerelatingtoapotentialpartnertoBCtAincludesconsiderationnotonlyofactivitiesproposedunderthepartnership,butalsootheractivitiesthatraisehumanrights-relatedconcerns.
5.
General
ThatthereisnobodyknownastheBugalaFarmersAssociationinBugalaandtherestillexistsnonetodate.
BidcoAfricaandBidcoUganda,PharisKimaru
ThecomplainantsrefertothemselvesastheBugalaFarmersAssociation.ItisbeyondthescopeofSECU’sinvestigationtodetermineifthisisaformal,registered,orlegallyrecognizedentity.SECU’sreferencetothisgroupisnotanendorsementofitslegalstatus.
6.
General
ThattheOilPalmProjecthastransformedKalangaladistrictsociallyandeconomicallyincludingmillionsofdollarsininfrastructureprojects-ferries,roadsandanultra-modernpowerplant.
BidcoAfricaandBidcoUganda,PharisKimaru
TheinvestigationreportnotespreviousevaluationsthatindicatedbenefitsoftheOilPalmProject.Itwasbeyondthescopeoftheinvestigation,however,todeterminetherelativebenefits,costs,andrisksofthatproject.
7.
General
That1,800farmersarebenefittingfromtheprojectandearningBillionsofUgandanShillingseverymonth.AlltheabovearethefundamentalfactsofthesituationinUgandabutlackingfromtheDraftComplianceReport
BidcoAfricaandBidcoUganda,PharisKimaru
Seeresponseabove.
8. General
BidcoAfricaandBidcoUganda,
3
PharisKimaru
9.
General
Indeedthereportonmostoccasionsseemstoarguewiththefacts:ForInstance:ThatBidcoAfricaistherelevantmemberoftheBusinessCalltoActionandnotBidcoUganda;
BidcoAfricaandBidcoUganda,PharisKimaru
ReportrevisedtoincludeadditionalinformationoutliningthetiesbetweenBidcoAfricaandBidcoUganda.Asexplainedintheinvestigationreport,forpurposesofBCtA/UNDPconductingitsduediligenceandriskassessment,thetiesconnectingBidcoAfricawithBidcoUgandaaresufficientsuchthatUNDPshouldhaveconsideredbothentities’activitiesandriskswhendecidingwhethertoacceptBidcointotheBCtAalliance.Itwasbeyondthescopeoftheinvestigationtodeterminetheexactlegalandfinancialrelationshipbetweenthetwocompanies.
10.
General
ThatBidcoUgandaisnotasubsidiaryofBidcoAfricabutaseparateentityonitsown;
BidcoAfricaandBidcoUganda,PharisKimaru
Seeresponseabove,andadescriptionintheinvestigationreportofrelevantconnectionsbetweentheentities.TheinvestigationreportcitestolanguageintheBidcoAfricawebsitedescribingOilPalmUgandaLimitedasoneofBidcoAfrica’soperations.InarecentdecisioninalawsuitrelatingtolandacquiredfortheOPULpalmoilproject,theHighCourt’sjudgmentnotedthatnotonlyBidcoUgandaandOPUL,butalsoBidcoOilRefineriesLtd(BidcoAfrica’spriorname)werevaliddefendantsinthesuit–givenBidcoAfrica’sparticipationintheagreementwiththeUgandangovernment.
11.
General
ThatBidcoAfricahasnooperationalcontrolofBidcoUganda.
BidcoAfricaandBidcoUganda,PharisKimaru
SeeresponseabovenotingthecleartiesbetweenBidcoAfricaandBidcoUganda.
12.
General
WEREITERATEANDCLARIFYTHAT:BidcoUgandalimitedwasneverassociateddirectlyorindirectlyinacquisitionoflandforproject.TheresponsibilityofGovernmentof
BidcoAfricaandBidcoUganda,PharisKimaru
TheinvestigationreportnotesthatBidcoUgandawasnotdirectlyinvolvedintheacquisitionoflandfortheproject,butratherrelyingontheacquisitionofthisland-includingacquisitionofthe‘nucleusestate’apparentlysupportedbyandbenefitingBidcoUganda.Thereportdescribeswhythisis
4
UgandawastoacquirelandfreeoffanyencumbrancesandprovidefortheprojectonleaseholdbasisforthedevelopmentofOilPalmandweareawareofprocessoflandacquisitionprocessfollowedbythegovernmentasdetailedbelow.Alandacquisitiontaskforce,composedofrepresentativesof1.KalangalaDistrictLocalGovernment2.MinistryofAgriculture,AnimalIndustryandFisheries3.MinistryofLands,HousingandUrbanDevelopment(representedbyCommissionerLandRegistration)4.NationalEnvironmentManagementAuthority5.MinistryofFinance,PlanningandEconomicDevelopment6.MinistryofJusticeandConstitutionalAffairs7.UgandaInvestmentAuthority8.ChiefGovernmentValuer,representingallstakeholdersimpactedbythelandacquisition.
relevanttotheduediligenceanalysis.
13.
General
Theinvestigatorsfailedtoproperlyinvestigateclaimsmadeininterviewstakinginformationatfacevalue:Meetingswithagroupofindividualsincludedassertionsthat29familieswerewronglydisplaced.QuestionsFromwhatlandspecifically?Howweretheydisplaced?Bywhom?Whatisthepresentstateoftheland?Havetheysoughtanylegalredress?
BidcoAfricaandBidcoUganda,PharisKimaru
SECUdidnotinitsreportacceptas‘true’theassertionsthatillegallandacquisitionsandhumanrightsviolationstookplace.SuchafindingisoutsidethescopeoftheinvestigationandoutsidethescopeofSECU’sinvestigatorymandate.Thereportdidnotethatweheardtheseviews,aswellaschallengestotheseviews.ThepresenceoftheseconflictingviewsisrelevanttoBCtA’sduediligenceanalysisindecidingwhetherapartnershipwouldbeappropriate.
5
14.
General
Anyonecanmakeaclaim.Theroleofaninvestigationistoascertaintheveracityoftheclaimsnottousethemtomakefreshassertions.
BidcoAfricaandBidcoUganda,PharisKimaru
ThepurposeofthisinvestigationwastoreviewUNDP’scompliancewithitspolicies,particularly,inthiscontext,policiesrelatedtoduediligence.SeeresponseinRow2.
15.
General
TheUgandanHighCourthassinceclearedtheOilPalmProjectandBidcoUgandaofenvironmentaldegradationcharges.(LCDSCaseno215of2007)Judgmentattached.
BidcoAfricaandBidcoUganda,PharisKimaru
NotedthatBidcoUganda,OPUL,andBidcoOilRefineries(akaBidcoAfrica)wereclearedofenvironmentaldegradationchargesinthatcase.
16. General
TheDraftComplianceReportgoesoutofitswaytolegitimizeandnormalizetheexaggeratedclaimsinthecomplaint:‘Buttherehavealsobeensomelesspositiveoutcomes.Manyofthenewjobopportunitieshavebeenfilledbymigrants,puttingpressureonlocalhealthandeducationservices.Therisingpriceoflandasaresultofthedevelopmenthasincreasedtensionsandledtorisingconflicts,particularlyassomeabsenteelandownershavebeguntoreturn.Thereareconcernsaboutlonger-termimpactsonhouseholdfoodsecuritywhentheoilpalmtreesbecometoolargetoallowintercropping.Andtheenvironmentalimpactshaveledtoagreatdealofpublicscrutiny,particularlygiventhesizeoftheinvestment.Finally,athouseholdlevel,therehasbeenareportedincreaseindomesticconflict,althoughmorepositiveimpactsareevidentintermsof
BidcoAfricaandBidcoUganda,PharisKimaru
ThequotationreferencedisexcerptedfromareportissuedbyIFADandIDS.TheinvestigationreportincludesbothpositiveandnegativeobservationsbyIFADandIDS.Seeparas.111to116.
17.
General
6
women’sempowermentandbuildingcapacityoffarmers’organizations.”NoneoftheseoutcomesareBidcoUgandaspecificandtheyarenothingclosetotheexaggeratedclaimsof‘grossviolationofhumanrightsandlandgrabbing”attributedtoBidcoUgandainthecomplaint.
18. 1
19.
2
PleasenotethatBCtA’srolecharacterizationasaplatformthat“willfacilitateandsupportengagementbetweenprivatesectorandlowincomepeople”isinaccurate.AsmentionedinthefeedbacktotheTORsofthisinvestigationonMay19,2016,BCtAdoesnotlinkprivatesectorcompaniestolowincomepopulationsasitdoesnotprovidematchmaking/linkagesservicesbetweencompaniesandfarmersoranytargetbeneficiaries.Rather,asstatedintheprojectdocument,inadditiontodrivingprivatesectorcommitments,facilitatingimpactmeasurementandknowledgecaptureetc.,itfacilitateslinkagesandreferralsbetweenbusinesses,knowledgepartners,funders,andotherresourcesthroughperiodicpeer-to-peerlearningopportunitiesthroughworkshops,webinars,and
OnbehalfoftheBureauforPolicyandProgrammeSupport(BPPS),UNDPDevelopmentImpactGroupandIstanbulInternationalCenterforPrivateSectorinDevelopment,(hereafterreferredtoasUNDPBPPS/DIG/IICPSD)
TheinvestigationreportdoesnotindicatethatUNDPprovidesmatchmaking/linkagesservices–weremovedthisspecificlanguageinresponsetocommentsontheTOR.However,‘drivingprivatesectorcommitments’explicitlyincludesdrivingprivatebusinesscommitmentstoengagelow-incomepeopleas‘consumers,producers,suppliers,anddistributors.’Inthissense,UNDPisatleastencouragingandsupportingengagementbetweenprivatesectorandlowincomepeople–albeitnotprovidinglinksbetweenspecificbusinessesandspecificindividuals.Wehaverevisedthetexttoreflectthis.
7
thePractitionerHubpartnership.
20. MobilizeSelectCountry-levelInclusiveBusinessEfforts.PleasenoteIDB’sOpportunityfortheMajorityInitiativeisnolongeracollaboratinginstitution.
UNDPBPPS/DIG/IICPSD
Noted.Reportrevisedaccordingly.
21. Accordingly,suggestreplacingthefollowingsentence“Theprojectispremisedontheideathattheplatformwillfacilitateandsupportengagementsbetweenprivatebusinessesandlow-incomepeople….”with“CompaniesjointheBusinessCalltoActionbymakinginclusivebusinesscommitmentstoimprovethelivesandlivelihoodsofmillionsofpeoplelivingatthebaseoftheeconomicpyramid(BoP)byengagingthemasconsumers,producers,suppliersanddistributorsofgoodsandservicesintheirvaluechains.”ThiswouldbeconsistentwithBCtA’sProDocwhichstatesthefollowing:"BCtAisaglobaljointadvocacyplatformprovidingpublicrecognitionfortheprivatesector'scontributiontodevelopment.BCtA'smissionistochallengecompaniestoadvancecorebusinessactivitiesthatareinclusiveofcorepopulations.TodosoBCtA:o DrivesPrivateSectorCommitmentsforPro-PoorInclusiveBusiness
UNDPBPPS/DIG/IICPSD
TheInvestigationreportwillincludetheproposedlanguageascomplementary(notreplacement)languagetotheexistingsentence,whichisintendedtodescribebrieflynotwhattheBCtAis(astheproposedlanguagedoes),butwhatitaccomplishes.WhenBCtAseekscommitmentsfromprivatebusinesstoengagepoorpeople,itspurposeisclearlytosupportandencourageengagementsbetweenprivatebusinessandlow-incomepeople.
8
o FacilitatesImpactMeasurementandKnowledgeCaptureo OffersLinkagestoServices,Finance,andPeertoPeerLearning
22. 3
23.
4
Pleaseusetheexactinstitutionaltitle:UNDPInternationalCenterforPrivateSectorDevelopmentto“UNDPIstanbulInternationalCenterforPrivateSectorinDevelopment”.
UNDPBPPS/DIG/IICPSD
Reportrevisedaccordingly.
24. Pleaseindicatewhich“otherrelevantstakeholders”wereinterviewed.ForinstanceBCtAhadprovidedalistincluding:KalangalaOilPalmGrowersAssociation,aformalassociationof1,800farmersinKalangalaDistrictinvolvedintheoilpalmdevelopmentproject;KalangalaDistrictLocalGovernmentasthedistrictlevelgovernmententityinKalangala;OilPalmUgandaLimited;IFCasthemaininvestorinBidcoAfricabusinessactivitiesrelatedtoBidcoAfrica’scommitmenttoBCtAto“integrateover30,000Kenyansmallholderfarmersintoagriculturalvaluechainsandcreateover60,000directandindirectjobsbytheendof2019throughopeningitsvaluechainsforsmallscaleentrepreneursby2019.”;andUgandaMinistryofAgriculture,
UNDPBPPS/DIG/IICPSD
Attachedtotheinvestigationreportisalistofstakeholdersinterviewed.SECUinterviewedstakeholdersitbelievedwouldinformitsunderstandingoftheextenttowhichUNDPcompliedwithitspolicies.
9
AnimalIndustryandFisheriesasthemaingovernmentpartnerofOPULandtheVegetableDevelopmentOilProjectthroughthePPP.
25.
5
Underparagraph5,itisstatedthat“Theinvestigations,includingfieldwork,wasfocusedontheadequacyofUNDP’sduediligenceandrelatedtransparencyinthecontextoftheBCtAproject–noonwhetherBidcohasorhasnotviolatedhumanrightsoriscomplicitinhumanrightsviolations.Thelatterdeterminationsisbeyondthescopeofthereport”,thereportseemstosuggestthatBidcointentionallyorknowinglyincolveditselfindeprivingthepublicoftheirlandandlivelihood,whichwefindtobeuntrue.
MinistryofAgriculture,AnimalIndustryandFisheries;VegetableandOilDepartmentProject(VODP),C.M.Masaba
TheinvestigationreportnotesexplicitlythatSECUisnotdrawinganyconclusionsrelatedtothisissue.Thereportdescribestheland-rights-relatedissuesonlytoindicatethatthesewereoutstandingissuesthatdidnotappeartobeconsideredfullybyUNDPduringitsduediligenceprocess.
26. 6
27. 7
28. 8
29.
9
PleasenotethattheProDocwasreviewedbythePACJuly2014;endorsedbyDSCSeptember2014;andduetotherestructuringandrelocationofBCtAtoIstanbul,theProDocbudgetandlogframewereupdatedinMarch2015.TheenddateoftheProDocisJune2017.
UNDPBPPS/DIG/IICPSD
SECUhasincludedinthereportallinformationavailabletoitregardingthetimelineofthePACandProdocapprovalprocess.
10
30. 10
31. 11
32. 12
33. 13
34. 14
35.
15
Asperthecommentaboveregardingparagraph2,pleasecorrectthepremisethatBCtA’sroleisto“facilitateandsupportengagementsbetweenprivatesectorbusinessesandlow-incomepeople…””.
UNDPBPPS/DIG/IICPSD
SeeresponseinRow21.
36.
16
Annex2iscurrentlyunavailableonSECU’swebpageforthiscase. UNDPBPPS/
DIG/IICPSD
SECUhasaddedablankversionoftheUNDP/PSDformusedbytheBCtAwhenitscreenedBidcoforadmission.PleaseseetheCaseRegistry.
37. Thereferenceto“BCtA’sexclusionarycriteria”shouldsay“UNDP’sexclusionarycriteria,”asreferencedinProDoc,Annex2,p.70,footnote14.
UNDPBPPS/DIG/IICPSD
Thelanguageisadirectquotefromp.70,para.1oftheProdoc–‘checkingthecompanyagainsttheBCtA’sexclusionarycriteria.’And,onpage70,theapparentscreenshotofthe‘BCtARiskScreeningProcess’includesonlythreeoftheelevenexclusionarycriteriaUNDPisrequiredtouse–thesamethreeintheUNDP/PSDformusedbytheBCtASecretariat.
38.
17
“Thisformcontainsasummary….applicationformfilledthatisfilledinbythecompany”(removerepetitive“filled”)
UNDPBPPS/DIG/IICPSD
Reportrevisedaccordingly.
39. Changethewordingfrom“excerptedfromtheUNDP/PSDform”to
UNDPBPPS/DIG/IICPSD
ThefullrequiredUNDPRiskAssessmentToolwasnotapplied-ashortcomingdescribedintheinvestigationreport.The
11
“excerptedfromtheUNDPRiskAssessmentTool”.
informationwasexcerptedfromtheUNDP/PSDformusedbyBCtA.
Muchoftheinvestigationreportdescribesdifferencesbetweentheformused–theUNDP/PSDform–andtherequiredform–theUNDPRAT–andtheimplicationsofnotusingtherequiredform.
40. 18
41.
19
Aconsistentstyleandprotocolshouldbeadoptedthroughoutthereportinregardstomentioningthenamesofstakeholders.Inthedraftnostakeholder(internalorexternal)arementionedbynameexceptforMr.Sohbani.Ifnameswillnotbeusedforallstakeholders,Mr.Sobhanicanbereferredtoasthe“GlobalProgrammeAdvisorandactingBCtAProgrammeManageratthetime”.
UNDPBPPS/DIG/IICPSD
Reportrevisedaccordingly.
42.
20
PleasenotethatapplicationtoBCtAhas2separatesteps.Thefirstistheduediligenceprocess.Thesecondstepisinrelationtothecriteriamentionedinparagraph20,whichassessestheeligibilityoftheInclusiveBusinessCommitmentofthecompany
UNDPBPPS/DIG/IICPSD
Noted.Reportrevisedtoensurethatpointisclear.
43.
21
PleasenotethatthespecificinclusivebusinesscommitmentfromBidcotoBCtAinKenya(anddifferentfromtheUgandaPalmOilmodel)is:
UNDPBPPS/DIG/IICPSD
Noted.
12
“ThroughtheBidcoFullValueChainInitiative,thecompanyisexpandinglocalsourcingofrawmaterials(wheat,maize,sunflower,soya,rice,pulses,sugarcaneandtomatoes)fromsmallholderfarmers.Bidcooffersfarmersoff-takecontractsthatspecifyupfrontmarketpriceandsupplyconditions,aswellasoffertechnicaltrainingtoensureincreasedproductivity.”
44.
22
It’simportanttomakethedistinctionthattheinitiativewasnotapilotbutratherascale-upofanalreadyexistinginclusivebusinesseffortsthathadalreadydemonstratedbenefitstothelocalcommunities.TheBCtAinitiativeaimedtofurtherthesebenefitstoalargernumberoffarmers.Thewaypoint22iscurrentlyphrasedleadsthereadertobelieveUNDPisapprovingastart-upinitiativewithtenuousbenefits.
UNDPBPPS/DIG/IICPSD
Reportrevisedaccordingly.
45. 23
46.
24
Bidco’scommitment,alongwith4otherapplications,wassenttotheDSCforreviewonSeptember11th.Thereviewemail“askedtoprovidefeedbackandcommentsbacktotheBCtASecretariatbySeptember16th”andstatedthat“ifnoobjectionsariseduringthereview,theSecretariatwillextendmembershiptothe
UNDPBPPS/DIG/IICPSD
ReportrevisedtoreflectlanguageintheSeptember11email.ReportfurtherrevisedtoreflectthatlanguageinthisemailisnotconsistentwiththeprocessforDSCapprovalasdescribedinaletterdated11March2016fromMr.SobhanitoDr.Bissell(SECULeadComplianceOfficer),whichnotesthatpartnershavetwoweekstoreviewandraiseanyobjections.Thereportisfurtherrevisedtoindicatethatalthough‘no
13
applicants.”TheacceptanceemailtoMr.ShahwassentonSeptember18th,afterallquestionswereaddressedand“noobjections”responsewassecuredfromallDSCmembers.
objections’weremadeby16September(thecitedapprovaldate)theSIDArepresentativetotheDSCraisedaquestionon16SeptemberrelatedtoBidcoandpalmoil,andaresponsewasprovided17September–afterBCtAapprovedBidco’smembership.TheDSCrepresentativerespondedwithabriefthankyounoteon18September.
47. 25
48. 26
49.
27
Thatthedisputeisincourtandthereareonly3officialplaintiffsinthecourtrecords.Theclaimof100farmersmadeinthecomplaintisthereforeanexaggerationaswell.Clause27oftheDraftcompliancereportbuys100%intothisexaggeration:Thecomplaintclaimsthat100suchfarmershaveaccusedaBidcoAfricaLtdventureinUganda,OilPalmUgandaLimited(OPUL)of'violatinghumanrights,destroyingtheenvironmentandgrabbinglandfromsmallholderfarmers'.Atthetime,thesefarmerswereattemptingtosecurearesponsetotheseconcernsinthecontextofthisUgandaproject,andwereawaitingacourtdecisionintheirlawsuitagainstOPUL.
BidcoAfricaandBidcoUganda,PharisKimaru
Theinvestigationreportnotesthatitisonlya‘claim’thereare100suchfarmers.Itwasbeyondthescopeofthereporttodeterminetheprecisenumber.Weagree,however,thatitwouldbeclearernottousethephrase‘thesefarmers’asitcouldbereadassupportiveoftheclaim.Wehaverevisedthetextaccordingly.
50. 28
InordertoclarifytheUNGlobalCompactroleandposition,wewouldrecommendtoincludeanadditional
UNGlobalCompact,TulsiByrne
Reportrevisedwiththeproposedlanguage.
14
paragraphonpg.28thatreadsasfollows:AsmentionedontheUNGlobalCompactwebsites"TheUNGlobalCompactisnotaperformanceorassessmenttool.Itdoesnotprovideasealofapproval,nordoesitmakejudgmentsonperformance".ItisalsoexplainedthatnewapplicationsforparticipationarecheckedagainstaglobaldatabasetoseeifthecompanyconcernedisthesubjectofasanctionorothermeasurebytheUNSecurityCouncilorotherinternationalinstitution,whichisreasonforexclusion,aswellasbeinginvolvedinthemanufacture,saleetc.ofanti-personnellandminesorclusterbombs.AnyotherinformationfromthedatabaseissharedwiththeLocalNetworkwherethecountryislocatedaskingifthereisanygoodreasontheyareawareofwhythecompanyoughtnottobepermittedtojointheinitiative.NoobjectionswereraisedonBidcoAfricaattimeofitsapplicationtojointheUNGlobalCompact,hencethecompanywasadmittedasaparticipantinOctober2009.However,itshouldbenotedthatthecomplaintthatistheobjectofthisreportwasnotraisedatthe
15
timeofthecompany'sapplicationtojointheinitiative.
TheUNGlobalCompactisavoluntaryinitiative,andthereforedoesnotpoliceorenforcebehaviororactionsofcompanies.RathertheinitiativeencouragescompaniestoreporttheirsustainabilityactionstotheirstakeholdersthroughtheUNGlobalCompactplatform-theCommunicationonProgress(COP),anannualreportthatdetailsthecompany'sworktoembedtheTenPrinciplesintostrategiesandoperations,aswellaseffortstosupportsocietalpriorities.BidcolastsubmittedaCommunicationonProgresson25October2016andisactivestanding(COPthatmeetstheminimumrequirements).Thenextoneisdue25October2017.
51.
29
PleasenotethattheabbreviationofOilPalmUgandaLimited(OPUL)isincorrect(UPOL)inthisparagraphaswellasinparagraphs91and93.
UNDPBPPS/DIG/IICPSD
Reportrevisedaccordingly.
52. 30
53. 31
54.
32
*Commentonpara32-36*Paragraph32notesthat“SocialandenvironmentalcommitmentsthatapplytoUNDPprojectsarereflectedinUNDP’sPOPPandineachProdoc.”
UNDPBPPS/DIG/IICPSD
Paras.51to63oftheinvestigationreportindicatehowtheUNDPPolicyandhumanrightsandgenderconsiderationswererelevanttotheproject.ReportrevisedtoreflectacknowledgementthattheUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectorandthegenderand
16
Basedonthisdefinition,thissectionshouldreferencetheUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSector(inthePOPP)andthegenderandhumanrightsconsiderations(Annex6ofProdoc),askeysocialandenvironmentalcommitmentsrelatedtotheproject.
humanrightsconsiderationsinAnnex6ofProdocwerekeycommitmentsoftheproject.
55. 33
56. 34
57. 35
58. 36
59. 37
60. 38
61. 39
62.
40
TheinclusionofamandatoryduediligenceprocessandcommitmentsspecifictohumanrightsandgenderintheProdocconstitutethekeymanagementmeasuresaimedtoavoidandmitigatetherisksassociatedwiththeprivatesectorpartnersandtheirvoluntaryactions.
UNDPBPPS/DIG/IICPSD
TheProdocincludescommitmentstohumanrightsandgender,butdocumentationrelatedtoBidco’sadmissionintotheBCtAdoesnotindicatethatthesespecificcommitmentsweremetduringtheduediligenceprocess,i.e.,documentationrelatedtoBidco’sadmissionintotheBCtAdoesnotreflectexplicit,thoroughconsiderationofthehumanrightscriteriaand/orchecklistinAnnex6.Theinvestigationreportendeavorstodescribetheseshortcomings.Inotherwords,thepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.
17
63. 41
64. 42
65. 43
66.
44
Pleasenotethatthehumanrightsandgendercommitments(Annex6whichispartoftheProDoc)states:“BCtAScreeningCriteriaandDueDiligenceProceduresforGenderandHumanRightsInclusion”TheBusinessCalltoActionSecretariatperformsaduediligencereviewofallcompaniespriortosubmittingtheirBCtAapplicationsformembershipconsideration.Thisduediligencereviewexaminesanymajorenvironmental,social,andgovernancecontroversiesassociatedwiththeapplicant,whichincludesanyhumanrightsviolations,and/orcontroversiesinvolvingvulnerableordiversegroupssuchaswomen,youth,andindigenouspeoples.Thisreviewresultsinadecisiontoeitherengageordisengagewiththecompany,withtheintentionoflimitinganyrisksofassociationwiththeBCtAanditssupportingPartners.
UNDPBPPS/DIG/IICPSD
Textinparas.71through91intheinvestigationreportreferencesthislanguageanddescribesshortcomingsrelatedtoUNDPattentiontothesecommitmentsandexistingUNDPPolicy.See,also,responseinRow62.ThepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.
18
67. Gender:Theduediligencereviewalsoincludesanassessmentofanycontroversiesrelatedtodiscriminationatworkorsocialdiscrimination.Thisincludesanexplicitassessmentofthecompany’scommitmenttogenderequityandthereviewincludesanysignificantcriticismsfromlocalandglobalNGOsandmedia,localandglobalpartnersoftheUNDP,governmentalagencies/politicalparties,aswellasanassessmentofanylegalcasesorpublicdemonstrations.Ifanymajorcontroversiesarediscoveredandthecompanydoesnotappeartobeaddressingtheissue,BCtAwillfollowUNDP’spolicytodiscontinueengagementwiththecompany.”
UNDPBPPS/DIG/IICPSD
SeeresponseinRow62,anddescriptionintheinvestigationreportofshortcomingsrelatedtoduediligence.
68. Violationofhumanrightsorcomplicityinhumanrightsviolations:BasedontheUNGuidingPrinciplesonBusinessandHumanRights,responsibilityforrespectinghumanrightsrequiresthatcompaniesseektopreventormitigateadversehumanrightsimpactsthataredirectlylinkedtotheiroperations,productsorservicesbytheirbusinessrelationships(businesspartners,entitiesinitsvaluechain,othernon-StateorStateentity),evenifthe
UNDPBPPS/DIG/IICPSD
Thisinformationandquoteareinthedraftinvestigationreportinpara.76andfn7.
19
companyitselfhasnotcontributedtothoseimpacts.Theseincludeviolationofhumanrightsorcomplicityinhumanrightsviolations,useortolerationofforcedorcompulsorylabor,anduseortolerationofchildlabor,amongothers.Shouldanyevidencebefoundofongoingviolationsduringtheduediligencereview,BCtAwillfollowUNDP’spolicytodiscontinueengagementwiththecompany.
69. 45 70.
46
Paragraph46shouldalsoacknowledgethattheduediligenceprocessandhumanrightsandgenderconsiderationsthatareintegratedintotheprojectwereintendedtoaddressthesocialandenvironmentalrisksassociatedwithengagement.
UNDPBPPS/DIG/IICPSD
SeeresponseinRow62.ThepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.
71.
47
SuggestingaCategory2seemsinaccurate.GivenBCtA’snatureasavoluntarycommitmentplatformoninclusivebusinessfromcompanies,whosespecificactivitiesincludedisseminationofresults,knowledgeexchange,communication,andtrainingitwouldmorelikelybeCategory1.UNDPESSPGuidanceNotedescribesCategory1:“Projectsthatincludeactivitiessolelyrelatedtoprocurement,reportpreparation,training,eventcoordination,communicationanddisseminationof
UNDPBPPS/DIG/IICPSD
BCtAisseekingactual(thoughvoluntary)commitmentsfromcompanies,promotingbrandrecognitionthroughaglobalplatform,andlendinglegitimacytocompaniesintheireffortstoincludepoorpeopleintheirsupplychains/business.Assuch,itappearstodomorethan‘disseminateresults’(eventhisactivityimpliesthatBCtAisattemptingtoproduceresultsrelatedtothecommitments),knowledgeexchange,communicationandtraining.IfBCtAisnotresponsibleforcommitmentsmadebycompanies,i.e.,ifthesecommitmentshavebeenmadealready,includingtofunderstocompanyactivities,thisshouldbeclear.
20
resultswillbeCategory1projects)”.However,whethertheprojectwasCategory1or2,thiswouldnotchangetheneedtoensurestrongduediligenceprocessesareinplacepriortotheacceptanceofnewmembersintotheBCtA.
72.
48
StressingtheapplicationofthemandatoryUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectoraswellasthefocusongenderandhumanrightsintotheBCtAPhaseIIProdocwerepartlyinresponsetofeedbackreceivedfromnon-projectstaffduringtheappraisalprocess.Paragraph48doesnotacknowledgethattheseelementswereincludedintheprojectasaresult.
UNDPBPPS/DIG/IICPSD
Para.48isrevisedtonotethattheProdocwasrevisedtoincludetheseUNDPcommitmentsinresponsetofeedbackduringtheappraisalprocess.Paras.53and54oftheinvestigationreportalreadyindicatethattheProdocincludestheseUNDPcommitments.Note,however,beginningwithpara.61,theinvestigationreportdescribesSECUfindingsthatthesewerenotfullyappliedinthiscontext.Para.64andsubsequentparagraphsdescribehowwhatwasactuallydonebyUNDPcomparedtowhatwasrequiredundertheUNDPPolicyandrelativetohumanrights.
73. 49
74.
50
AsmentionedduringtheinterviewswiththeBCtAteam,BCtAbeganusingthelatestRATforminOctober2015.Thisincludes,assuggestedinParagraph50,theassessmentofcompanieswillingnessandcapacitytoaddresssocialandenvironmentalconcerns.BCtA’songoingimprovedpracticessinceOctober2015couldbeacknowledgedinthereport.
UNDPBPPS/DIG/IICPSD
RevisedtonoteUNDPstatementthatBCtAbeganusingthelatestUNDPRATforminOctober2015whenscreeningpotentialBCtAmembers.
21
75.
51
Changethewordingto:“ComplementedbytheRiskAssessmentTool(SeeAnnex3)–designedtosupportimplementationofthePolicy-andtheGuidelinesforPrivateSectorPartnerRiskAssessmentTool(Guidelines)–designedtoguidethecompletionoftheRAT.”
UNDPBPPS/DIG/IICPSD
Reportrevisedtoincludemostoftheproposedlanguage.
76.
52
ThedocumentshouldmentionthatpriortotheRATbecomingamandatoryrequirementforallprivatesectorpartnerships,UNDP’sstandardwasthePSDduediligenceform.
UNDPBPPS/DIG/IICPSD
TheUNDPExecutiveOfficeindicatedthattheywereunabletofindintheirrecordsanyapplicableversionoftheUNDP/PSDformthatmatchedtheoneusedbytheBCtAtoscreenBidco.Additionally,theExecutiveOfficenotedthattherewasnothingintheirrecordsindicatingconsiderationofanyofficialPSDformpriorto2013.
77. 53
78. 54
79.
55
*Commentsonpara55-59*PleasenotethatwhencompaniesbecomemembersofBCtA,theyreceiveawelcomingletterfromBCtAonbehalfofallitspartners.NoMoUiseversignedwithUNDP.However,wedorecognizethatwithintheexistingpolicy,thereisnoclarificationonthistypeofmulti-partneralliance,withstand-alonebrandingandgovernance.Toaddressthis,apolicyreviewandupdatewillbeconductedin2017whichwillincludeconsiderationof
UNDPBPPS/DIG/IICPSD
Noted.
22
howtoamendthePolicyonDueDiligenceandPartnershipswiththePrivateSectortoclarifyapplicationinmulti-partneralliances,wherestakeholdersdon’thaveorareperceivedtohaveadirectrelationshipwithUNDP.
80. 56
81. 57
82. 58
83. 59
84. 60
85.
61
Pleasenote,thatwhenBidcowasacceptedintotheBCtA,theUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectorwasapplied;however,bymistaketheRATformthatwasusedtorecordtheduediligencefindingswasanoutdatedversionoftheofficialUNDPduediligenceform(updatedtotheRATinNovember2014).
UNDPBPPS/DIG/IICPSD
Asdetailedintheinvestigationreport,projectdocumentationdoesnotsupporttheassertionthattheUNDPPolicywasfullyapplied.Tothecontrary,forthereasonsexplainedinthereport,itappearsitwasnot.
See,also,responseinRow76.
86.
62
PleasenotethatwhiletheBCtASecretariataddedthissentenceonthewebsite,theintentwasnottobeexcludedfromthepolicybutratherto
UNDPBPPS/DIG/IICPSD
Noted.ReportrevisedtoreflecttheSecretariat’sacknowledgmentthatthefullPolicyandRATapply.
23
clarifytocompaniesandotherstakeholderstheirrelationshiptoBCtAasamulti-stakeholderpartnership.ThisisdemonstratedbythecontinuedapplicationofPolicyonDueDiligenceandPartnershipswiththePrivateSectorinthecontextofBCtA.
87. 63
88.
64
ThissectionshouldclarifythatUNDP/PSDformwasnot“anotherriskassessmenttool”butaformthatwaspartofUNDP’sduediligenceprocesspriortothedevelopmentandwidedisseminationofthecurrentRATform(launchedinNovember2014).ThePSDformcomplementedtheRiskAssessmentToolandprovidedanoverviewofcorporatecontroversiesandother,relevantcorporatesocialresponsibilityinformation.BCtAhaddiligentlyfollowedtheguidanceprovidedintheRiskAssessmentToolalbeititcontinuedtousetheoldformafterthenewonehadbeenapprovedanddisseminated.
UNDPBPPS/DIG/IICPSD
Asdetailedintheinvestigationreport,projectdocumentationdoesnotsupporttheassertionthattheUNDPPolicywasfullyapplied.Tothecontrary,forthereasonsexplainedinthereport,itappearsitwasnot.See,also,responseinRow76.
89. 65
90. 66
24
91.
67
ThestatementthatPSDduediligenceform“appearsexplicitlytailoredforuseonlyinprescreening”isinaccurateasthePSDwasaUNDPduediligenceformusedpriortothecurrentRATform.
UNDPBPPS/DIG/IICPSD
Reportrevisedtoremovereferencetotheform’stailoreduseinprescreening.SeeresponseinRow76.
92. 68
93.
69
94.
70
95.
71
96.
72
Thestatementthatthe“BCtA’sexclusionarycriteriaincludeonlythreeofUNDP’sexclusionarycriteria”isinaccurate.TheProDoc,Annex2,p.70,whichtheSECUreportcites,listsall11exclusionarycriteria,inlinewithUNDP’sexclusionarycriteria.TheremighthavebeenaconfusionwiththefactthattheUNDP/PSDformonlyliststhreeexclusionarycriteria–tworelatingtothemanufactureofarmamentsandonerelatingto
UNDPBPPS/DIG/IICPSD
Despitementionofall11exclusionarycriteriaintheProdoc,all11werenotclearlyapplied.ThepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.Theonlyexclusionarycriteriaclearlyappliedwerethe3listedintheUNDP/PSDform.See,also,responsesinRows37and88.
25
marketingofbreastmilk.However,theimportantdistinctionneedstobemade–UNDP/PSDformisnotaformdevelopedbytheBCtA,itwasaUNDPAgency-wideformpriortoNovember2014.Therefore,theProDocdoesnotintroducea“separate”BCtAlistofexclusionarycriteria.
97. 73
98.
74
Asperpointaboveonparagraph72,thisstatementisinaccurate.
UNDPBPPS/DIG/IICPSD
SeeresponseinRow96.
99. 75
100. 76
26
101.
77
102. 78
103. 79
104. 80
105. 81
106. 82
107. 83
108.
84
TheUNDP/PSDformdidnotdifferentiatebetween“limited”and“normal”duediligence.TheBCtAconductedduediligenceinlinewiththeUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSector.
UNDPBPPS/DIG/IICPSD
Asdetailedintheinvestigationreport,projectdocumentationdoesnotsupporttheassertionthattheUNDPPolicywasfullyapplied.Tothecontrary,forthereasonsexplainedinthereport,itappearsitwasnot.
109. 85
110. 86
TheFullValueChainInitiativesubmittedbyBidcoAfricatotheBusinessCalltoAction–hasnothing
BidcoAfricaandBidcoUganda,
Asnotedintheinvestigationreport,UNDP’sPolicyindicatesthatthe‘‘Growingofcrops,includingpalmoilorotherlargemonocultures’maybeconsideredhighrisk,andforsuchsectors,‘an
27
todowithOilPalm.BidcoAfrica’sInitiativefocusesonSunflowerandSoyaBeansinKenya.Theextracarefulapproachisnotrequired.
extracarefulapproachisrequired’(Policy,pg.5).SECUnotesthisaspotentiallyrelevant,andworthyofconsiderationbyUNDP.
111.
86
Theinvestigatorsseemtorelyonanythingbutlegalandformaldocumentationtoestablishalinkbetweenthetwoorganizations:‘AUNDPstaffmemberwiththeBCtASecretariatindicatedinanemailthatBidcoUgandais‘ajointventurebetweenWilmarGroup…andBidco[Africa]withfinancingfromIFAD.’ThisstatementwouldmeanthatIFADisafinancierofBidcoUganda-anotherworldlyclaimbyanymeasure.IFADisonlyinvolvedintheVegetableOilDevelopmentProjectandfundsfarmersnotBidcoUganda.Point86representsthetrueeffectoffailingtoappreciatethisdemarcations.Itreads:BidcomadenofinancialcontributiontoBCtA,butthesectorofactivityatthecenterofthepartnershipmaybeconsideredrisky.Promotinginclusivebusinessisnotinherently‘highrisk,’butBidco’sproposedinitiativeforBCtAmembership–theFullValueChainInitiative–involvedagriculturesupplychains.AsnotedinthePolicy,the‘Growingofcrops,includingpalmoilorotherlargemonocultures’maybeconsideredhighrisk,andforsuch
BidcoAfricaandBidcoUganda,PharisKimaru
Thestatementthat‘BidcoUgandaisajointventurebetweenWilmarGroup…andBidcowithfinancingfromIFAD’isnotaSECUstatement.ItwasastatementfromaUNDPmemberoftheBCtASecretariattoaDonorSteeringCommitteemember.Theinvestigationreportisrevisedtoreflectthisdisagreementwiththisstatement.
28
sectors,‘anextracarefulapproachisrequired’(Policy,pg.5)
112.
87
Thestatementthat“notallexclusionarycriteriawereincludedandconsideredduringduediligence”isinaccurate.BCtAhadconductedtheduediligenceinlinewiththeRiskAssessmentToolguidancewhichlistsallrelevantexclusionarycriteria.Thus,allofthecriteriawereconsideredwhenassessingthecompany.
UNDPBPPS/DIG/IICPSD
Projectdocumentationdoesnotreflectfullandadequateconsiderationofallexclusionarycriteria.Tothecontrary,asdetailedintheinvestigationreport,documentationprovidedreflectsinadequateattentiontoUNDPPolicy.
113.
88
*Commentsforpara88-89and117-118*InadditiontothecarefulreviewofIFAD’sassessmentsofOPUL(a.ithejointventurebetweengovernmentofUgandaandBidco,financedbyIFAD),theBCtAteamalsoreliedonIFC’sEnvironmentandSocialReviewSummarythatpertainstothebank’sUS$36.5millionloantoBIDCOinJuly2014tosupportexpansionofthecompany’sconsumergoodsoperationsintonewmarketcategoriesandcreatemoreopportunitiesforsmallfarmerstoenhanceproductivityandearnbetterincomes.ThesefindingswerealsosharedwiththedonorsfollowingSIDA’sadditionalinquiry(asmentionedbySECUreportinpoint24).
UNDPBPPS/DIG/IICPSD
ThereportisrevisedtoreflectUNDPassertionsrelatedtorelianceonIFC’sduediligenceforIFC’sBidcoprojectandSECUfindingsrelatedtotheseassertions.
Findingsincludethefollowing:
BCtA’spublicBidco-relateddocumentationdoesnotmentiontheIFC-supportedBidcoprojectorrelianceonIFC’sduediligence.InterviewswithUNDPBCtASecretariatstaffindicateddiffering/conflictingviewsontheextenttowhichIFC’sduediligencewasused.Inanyevent,giventhattheIFC-supportedprojectwasnotmentionedinBCtABidco-relateddocumentation,therelationshipbetweenIFC’sduediligenceforBidco’sprojecttoconstructnewphysicalfacilitiesandBCtA’sduediligenceforBidco’sinitiativetouselow-incomefarmersforsourcesofrawmaterialsisnotapparent.IftheIFC-supportedprojectandBidco’sFullValueChainInitiativearerelated,claimsmadebyBidcoforeacheffortwouldneedtobereconciled,e.g.,claimsrelatingtopotentialoutcomes,includingthenumberofpeopletobeemployed.
29
*IFCassignsthefollowingtypesofcategoriestoitsinvestmentprojects–CategoryA,B,CandFIs(forfinancialinvestmentactivities).CategoryAcoversprojectswithsignificantadverseimpacts,CategoryB–projectswithlimitedadverseimpactsthatcanbemitigated,andCategoryC–projectswithminimalornoadverseimpacts.ThesearetakenfromIFC’sESRProcedureManual.ThefindingsofIFC’sEnvironmentalandSocialReview,(whichincludedsitevisitsofBidcofactoriesinKenya,interviewswithkeypersonnel,reviewofdocuments,etc.)statedthat“theproposedinvestmentisexpectedtohavelimitedenvironmentalandsocialimpacts.Further,theimpactscanbeavoidedormitigatedbyadheringtorecognizedperformancestandards,procedures,guidelinesanddesigncriteriaasdescribedinthefollowingsections.ThisisthereforeaCategoryBprojectinaccordancewithIFC’sEnvironmentalandSocialSustainabilityPolicy.”InIFC’scategorizationlevel*,CategoryBisassignedtotheprojects“withpotentiallimitedadversesocialorenvironmentalimpactsthatarefewinnumber,site-specific,largelyreversible,andreadilyaddressedthroughmitigationmeasures.”
30
114. IFCassessedthefollowingkeyissues(amongother):OHSstandards,adherencetoKenyanlaborlaw,workingconditions,standardsandOHSriskpreventionandmanagement,LandAcquisitionandInvoluntaryResettlement,BiodiversityConservationandSustainableNaturalResourcesManagement,IndigenousPeoplesandCulturalHeritage.Thelatterthreecategorieswereassessedasnotimpactedbytheinvestment.TheIFC’sassessmentalsoprovidedadetailedE&SactionplanthatBidcoweretoimplementtoimproveidentifiedpotentialcontroversiesandmitigatepotentialrisks.
UNDPBPPS/DIG/IICPSD
IFC’sduediligenceisnotreferencedinBCtA-relatedprojectdocumentation,and,therefore,itisunclearhowIFC’sduediligencefortheconstructionofphysicalfacilitiesrelatestoBCtA’sduediligencefortheFullValueChainInitiative.
SECUcouldnotfindwrittenassurancesthatcommitmentsBidcomadeinthecontextoftheIFCprojectwouldapplyinthecontextoftheFullValueChainInitiative.Anditisunclearhoworiftheycouldapply,e.g.,thegrievancemechanismfortheIFCprojectisnotclearlyapplicable.
See,also,responseinRow114.
115. 89
116. 90
117. 91
118. 92
119. 93
120. 94
Labor-rightsrelatedconcernsatBidcoAfrica’soperationinKenyaweregivenin-depthconsiderationand
UNDPBPPS/DIG/IICPSD
AsnotedinyourcommentinRow122,labor-rightsconcernsinvolvedmultipledisputes,notjustone.TheUNDP/PSDformnotes,‘BidcoAfricainKenyasufferedfromissueswithpoor
31
researchatthetimeshowedthattherehadbeenonespecificdispute,whichhadbeenresolved.
workingconditionsforanumberofyears:2011workersstrikeparalyzedthefactory.ProtestsresurfacedinMarch2015.’Theinvestigationreportnotesthattheduediligenceformfailstodescribeiftheseissueswereignoredoraddressed.Iftheywereaddressed,thisshouldhavebeendescribedintheduediligenceform.
121.
95
Pleasenotethatasmentionedoncommentabovetoparagraphs88-89and117-118thefindingsfromIFC’sESreviewandIFAD’sassessmentofOPULwerealsoconsidered.
UNDPBPPS/DIG/IICPSD
SeeresponseinRow113.
122.
96
Pleasenotethatthesubtitleaboveparagraph96characterizinglandrelatedclaims“insignificant”isinaccurateandmisleading.Theduediligenceformmentions:“Thefollowingmoderate-riskcontroversieswereidentified:− LandgrabcontroversyinUganda:BidcowasaccusedoflandgrabbinginKalangalaDistrictinUganda,leavingthousandsdisplaced.Otherrelatedaccusationsincludedpoorlaborstandardsanddeforestation.However,UgandangovernmenthasclearedBidcoinlandclaim.Nevertheless,Ugandanfarmerswhowereevictedhavetakenthecasetocourt.Theproceedingsareongoing.IfthedecisionisnotinfavorofBidco,thereputationalrisksaresignificantgiventhecompany’scommitmenttoworkingwith
UNDPBPPS/DIG/IICPSD
Titlerevised,andreportrevisedtoindicatethatUNDPstaffcharacterizedcontroversiesas‘moderate-risk’,furthernotedthatreputationalriskswouldbe‘significant’ifthecourtdecidedagainstthecompany,andultimatelystatedthattheanalysisofperformanceandstrategy‘doesnotindicateanyreputationalrisksforBCtA;thecompanyisasolidcandidatetojointheglobalplatformofinclusivebusiness.’
32
smallholderfarmers.− BidcoAfricainKenyasufferedfromissueswithpoorworkingconditionsforanumberofyears:2011workersstikeparalyzedthefactory.ProtestsresurfacedinMarch2015.− Taximproprietyallegationsin2012:BidcoAfricacontestedincourtahugetaxbillfromtheKenyanTaxAuthoritieswherethecompanylostthecaseandhadtopay.”
123. 97
124. 98
125.
99
Paragraph99seemstoimplythatBidcowasactivelyinvolvedintheprocessoflandacquisition.TheroleofthelandacquisitionsolelyrestedontheGovernmentasperthecooperatingagreementbetweenGovernmentofUgandaandBidcothatwassignedinApril2003.IndeedGovernmentacquired8,500hectaresoflandforthenucleusestate,fromwhichBidcowasabletoestablish6,200hectaresoilpalmplantation.Outofthisland,onlyabout25hectaresoflandiscontestedandissubjectofthecaseinCourthererefereedto.Thisis0.29%ofallthelandacquired.Thisshouldsayalotonthematerialityofthelandindispute
MinistryofAgriculture,AnimalIndustryandFisheries;VegetableandOilDepartmentProject(VODP),C.M.Masaba
SeeresponseinRow12.
33
inrelationtothewholeproject.Consideringhowmanysmallholderfarmerareinvolvedintheprojectcurrently(1,800)withanassuredaccesstomarketfortheproduceandamonthlyincomefromsaleoftheircrops,thisisoneofthefewsuccessfulcasesofinclusiveinvestment.Farmershavea10%shareholdinginOilPalmUgandaLimited(OPUL)andtwopositionsontheBoardofDirectors.Thereisapricingformulainplacethatensuresfairpricingforfarmers’oilpalmfreshfruitbunches,henceaddressingchallengesassociatedwithamonopoly,andBidcohassignedofftheagreementacceptingtofollowtheformula.Thecompanyensuresthatfarmersusethesamequalityofinputsusedbythecompanylikeseedingandfertilizersandinaddition,providestechnicalknowhowtothefarmers.Thecompanymeetswithfarmerleaderseverymonthtodiscussthepricethroughapplicationofthepricingformulaandanyotherissuespertainingtotheoilpalmbusiness.Thecompanyprovidestheinputsoncreditthatispaidbytheprojectoveraperiodofoneyear.Theseeffortsensureinclusivenessofthebusinessbyinvolvingsmallholderfarmersintheproductionchainandalso
34
protectingtheirinterest.
126. DespiterecordingandacknowledgingthatBidcoUgandawasnotdirectlyinvolvedinanylandtransactionsthedraftreportgoestoARGUEagainstthisfact:InformationgatheredduringtheinvestigationindicatedthatwhileBidcoUgandawasnotdirectlyinvolvedinacquiringlandforcropsforitsrefinery,itknewof,reliedon,andencouragedthispurchasebythegovernment.BidcoUgandaalso,apparently,wasengagedindecisionsanddiscussionsrelatedtothepurchase.Whatinformationisthisreferredinclause99?
BidcoAfricaandBidcoUganda,PharisKimaru
See,also,responseinRow12.
127. Tothebestofourknowledge,therewasnocompulsoryacquisitionofland,andallthelandprovidedbythegovernmentwasacquiredonwillingbuyerwillingsellerbasisfollowingChiefGovernmentValuer’svaluationandinputsfromtheothermembersofthetaskforce.Therewerenoevictionsofpeopleonthelandacquiredfortheproject.TheProjecthasaclearmandatethatensuredtakingpossessionofsuchlandwhichisfreeoffanyencumbrances.Wereconfirmthatcompanyhavenottakenpossessionofanylandwhich
BidcoAfricaandBidcoUganda,PharisKimaru
SeeresponseinRow2.
35
hasanyeconomicorcommercialcropValue.Thisisevidentfromthefactthatthoughthegovernmentacquired8500Haoflandfortheproject,only6200hasbeenusedforthedevelopmentofOilPalmundertheprojectleaving1,500Hatowardsenvironmentalzoneand800Hatocommunitiestocontinuewiththeireconomicactivities.Doestheinformationgatheredreferredtoinclause99contradictordisputethisnarrative?
128. Thefactthatthereiscross-shareholdingbetweenthetwocompaniesisnotenoughtodismisstheabovedemarcationsasreadinclause99:“However,BidcoAfricahasatleastfinanciallinkstoBidcoUgandaandtheKalangalaoilpalmprojectreferencedinthecomplaint.”
BidcoAfricaandBidcoUganda,PharisKimaru
SeeresponsesinRow9.
129. Underparagraph100,itisstatedthat“ItisnotgoodforBidcoeventiftheyweren’tinvolvedinlandacquisition,itlooksbad.Theyhavetitle(lease)byUgandaLandCommission.EvenifBidcowinsthecase,ifalocalmanisnothappy,itdoesn’tlookgood”.Whilethisisacommentbyanindividualentitledtohisorherviews,itisnottenableforthecompanyorgovernmenttostopactivitiesbecause
MinistryofAgriculture,AnimalIndustryandFisheries;VegetableandOilDepartmentProject(VODP),C.M.Masaba
Theinvestigationreportusedthisquoteasoneexampleoftheimportanceofrobustduediligencetoreputationalrisk.Nevertheless,thereporthasbeenrevisedtodeletethequote.
36
ofanyandeverycomplaintorclaimraisedwithoutconsideringthemeritoftheissue.Otherwise,itwillnotbepossibletoimplementtheprojectoranyotherdevelopmentinitiative.Eachcasehastobeconsidereddependingonhowmaterialitis.Inthiscase,onlyabout0.29%ofthelandisundercontention.
130.
100
Clause100seekstoassignreputationalresponsibilitytoBidcoUgandabasedonnothingbuttheviewofoneindividual.“ItisnotgoodforBidco.Eveniftheyweren’tinvolvedinlandacquisition,itlooksbad.Theyhavetitle(lease)byUgandaLandCommission.EvenifBidcowinsthecase,ifalocalmanisnothappy,itdoesn’tlookgood.’’
BidcoAfricaandBidcoUganda,PharisKimaru
Reportrevisedtoclarify.SeeresponseinRow129.
131.
101
Paragraph101seemstoimplythatthereareotherareaswheretherearecomplaintsconcerningthelandacquiredfortheproject.Italsoquotes29familiesthatweredisplacedandwomenwithfamilieswhohavebeendeprivedoflivelihood.Thisistoclarifythattothebestofourknowledge,onlyonepieceoflandhasbeencontestedandisabout0.29%ofthetotallandacquired.Inaddition,factsofsurveyoftheareabeforeacquisitionshouldhavebeenreceivedbyyourteamfromKalangalaDistrictheadquarters
MinistryofAgriculture,AnimalIndustryandFisheries;VegetableandOilDepartmentProject(VODP),C.M.Masaba
Reportrevisedtoindicatethisstrongdisagreementwiththeclaimsthat29familiesweredisplaced.
37
thatledthelandidentificationprocess.Factsofnohousesandcommercialcroppingfoundonthelandshouldhavecomeup.OneneedstoappreciatethatinthispartofUganda,atenanthasrightofuseontheareathatiscultivatedandnotareasthatareforestedbecausethelandbelongstotheregisteredowner.Fromourrecords,therewere11peoplethathadsubsistenceagriculturalactivitiesonabout45acresland,withouttheknowledgeofthelandowner.Duringtheprocessofnegotiationswiththelandowner,theseissuesoftenantsonlandwereraisedandthelandlordagreedtoputaside49acresoflandforcommunity,andlease330acresofthelandthatwasnotutilized,totheproject.Inaddition,hecompensated10tenantswhoacceptedpaymentsandonlyoneturneddowntheoffertobecompensated.Thecomplainantsstillliveonthelandbelongingtothislandowner.Thepracticeofatenantbeingrecognizedbytheregisteredlandownerisknowninthearea.Atokenpay‘kanzu’issupportedtobemadetothelandlord,forthetenanttoberecognizedbythelandlord.Itishopedthatduringtheresearch,thesefactswerecollectedandthereforeinformedthereport.The29families
38
supposedlydisplacedarethereforeasurprisetotheProject.Suchclaimsneedtobecheckedoutwiththeleadersofthecommunityintheareaandthedistrictandcorroboratedbeforetheycanbewrittendownasfacts.
132. Thisparagraphisunclear,asitismixingpossibleimpactonindividualswithnumberofgeographicallocations.Publicrecordsindicateonlyonelocation–Kalangaladistrict,BugalaIsland.
UNDPBPPS/DIG/IICPSD
ReportrevisedtoindicatethatallconcernsrelatetoKalangaladistrict.
133. 102
134. 103
135. 104
136. 105
137. 106
138.
107
PleasenotethatthecourtcaseisadisputebetweenMuyisa(thecomplainant)andthelandlord(asrespondent1)andOPUL(asrespondent2).
UNDPBPPS/DIG/IICPSD
Commentnoted.
39
139. 108
140. 109
141.
110
Titleaboveparagraph110isunclearPleasenotethesourcesusedbyBCtAduringtheduediligenceincluded:o IFADreport,o IFCenvironmentandsocialassessmento GovernmentofUgandastatementsfromTheUgandanMinistryofAgriculture,AnimalIndustryandFisheries.o Comprehensiveinternetsearchandanalysisofpubliclyavailableinformation,including
UNDPBPPS/DIG/IICPSD
ReportrevisedtoincludethisinformationaswellasaSECUfindingthatthisinformationshouldhavebeenincludedinBCtA’sduediligencedocumentation.
40
throughtopic-relatedwebsites,resourcecentersanddatabases(separateESGandControversyreportforBidcowasnotavailableintheSustainalyticsdatabase).
142. 111
143. 112
144.
113
TheDraftComplianceReportgoesoutofitswaytolegitimizeandnormalizetheexaggeratedclaimsinthecomplaint:InClause113itreads:However,asubsequentreportbyIFADandtheInstituteofDevelopmentStudies(IDS)highlightsnotonlymanyofthebenefitsdescribedintheearlierIFADreport,butalsoseveralnegativeunintendedconsequences–includingsomethatarereflectedinthecomplaint.
BidcoAfricaandBidcoUganda,PharisKimaru
Thereportendeavorstoincludeallperspectives,includingthosereflectedinbothIFADreports.
145. 114
146. 115
147. 116
148. 117
149. 118
PleasenotethatmembershipstatustoUNGlobalCompactispublicly
UNDPBPPS/DIG/IICPSD
SeeresponseinRow50providedbytheUNGlobalCompact,re:relianceonUNGlobalCompactmembershipaspartofdue
41
availableontheirwebsite,andBidcohasbeenandisactiveandhasregularlysubmitteditsCommunicationonProgress(COP)forthepast6years.https://www.unglobalcompact.org/what-is-gc/participants/1314#cop
diligence.
150. Also,pleasenotethatIFC’sassessmentdoesfindthatBidcohasanestablishedgrievancemechanisminplace,andacommunitygrievancemechanismaspartofitsmanagementsystem.“BidcowilladoptaformalStakeholderEngagementPlanincorporatingaCommunityGrievanceMechanismaspartofitsEHSmanagementsystem,asarticulatedintheattachedESAP.Aspecificmanagementprocedurewillbedevelopedandimplementedbeforeconstructionphase.ItsimplementationwillbeassignedtotheCorporateCommunications&PublicRelations(CCPR)TeamLeaderwhoiscurrentlyresponsibleforcommunications”http://ifcext.ifc.org/ifcext/spiwebsite1.nsf/651aeb16abd09c1f8525797d006976ba/49fa276de3012f8285257ccd004e82c8?opendocument;http://ifcext.ifc.org/ifcext/spiwebsi
UNDPBPPS/DIG/IICPSD
ThegrievancemechanismestablishedaspartoftheIFCprojectisnotclearlyrelevantforlow-incomesupplierswhoaretheprimarystakeholdersoftheFullValueChainInitiative.IFCdocumentationforitsprojectinsupportofnewphysicalfacilitiesforBidconotesthefollowingregardingthismechanism:It‘hasbeenadoptedinordertoreceiveandtoaddressanyissuesand/orcomplaintsraisedbysurroundingstakeholdersandend-customersresultingfromproductionandtransportactivities.’Thismechanismappearstotargetthosepossiblyimpactedbyconstructionofthephysicalfacilitiesandcustomersofproducedproducts.Themechanismdoesnotappeartobeavailabletolow-incomesuppliersundertheFullValueChainInitiative.TheProdocdoesnotmentionthismechanism,muchlessdescribehowacommitmentbyBidcototheIFCtocreatesuchamechanismrelatestotheBCtAproject.See,also,responseinRow13.
151.
42
te1.nsf/651aeb16abd09c1f8525797d006976ba/49fa276de3012f8285257ccd004e82c8?opendocument
152.
119
PleaseclarifywhichoutsidevendorhasassignedBidcoanaveragescore.
UNDPBPPS/DIG/IICPSD
ThereporthasbeenrevisedtoreflecttheUNGlobalCompact’sterminology.BidcolastsubmittedaCommunicationonProgresstotheUNGlobalCompacton25October2016andisin“Active”standing(COPthatmeetstheminimumrequirements).“Active”levelisthemiddleratingfortheUNGlobalCompact,above“Learner”andbelow“Advanced.”
153.
120
Pleasenoteitisinaccuratetostatethat“Staffappearedtorelyheavilyonassurancesfromthecompany…”BCtAreliedonthefollowingsources:o Deskreviewofpublicly
availablesourceso Expertiseoflocalconsultantso IFCenvironmentalandsocial
assessmento IFADreporto ActivemembershipinUN
GlobalCompacto LetterfromtheGovernment
ofUganda
UNDPBPPS/DIG/IICPSD
Revisedtoclarify.Thereliancementionedinthereportalsoreferstotheinitiativeitself,andnotexclusivelytheduediligenceprocess.DuringinterviewswithBCtAstaff,theteamresponsibleforconductingduediligenceonBidco’sapplicationindicatedrelianceonassurancesfromthecompanythatthecompanywouldresolveconcernsidentifiedbythereviewprocess.IntheUNDP/PSDform,underthesection“Whatsourceswerecheckedforthiscompany?”itsays“Mainmedia(NGOsandnewspapers),onlinesources,UNGC,BidcoAfricawebsite.”Itmakesnomentionofexpertiseoflocalconsultants,theIFCassessment,theIFADreport,oranyletterfromtheGovernmentofUganda.
43
154.
121
PleasenotethatIFC’sassessment(IFCasaninvestorintheKenyaValueChainProject),includesprovisionsforcommunityengagement,suppliercodeofconduct,responsiblesourcing.http://ifcext.ifc.org/ifcext/spiwebsi
te1.nsf/651aeb16abd09c1f8525797d006976ba/49fa276de3012f8285257ccd004e82c8?opendocument
UNDPBPPS/DIG/IICPSD
SeeresponsesinRow113.
155. 122
156. 123
157. 124
158. 125
159. 126
160. 127
161. 128
162. 129
*Commentonpara129-130*Wearenotsurewhatismeantby
UNDPBPPS/DIG/IICPSD
Reportrevisedto‘assessmentoftheproject.’
44
“assessment”oftheBCtAProdoc.AnenvironmentalandsocialimpactassessmentoftheProdocwouldnotberequired.
163.
130
45
164.
131
PleasenoteadescriptionofeachinclusivebusinesscommitmentincludingobjectivesandmeasurabletargetshavealwaysbeenpubliclyavailableontheBCtAwebsite.
UNDPBPPS/DIG/IICPSD
ReportrevisedtoavoidperceptionthatnoinformationiscurrentlyavailableonBCtA’swebsiterelatedtomembercompanies’commitments.
165. 132
166.
133
AsmentionedduringtheinterviewwiththeSECUteam,sinceOctober2015BCtAhasbeenusingtheRAT.Werequestthatthisbestatedinthereport.
UNDPBPPS/DIG/IICPSD
ReportrevisedtoindicatethataccordingtotheBCtAtheRATformhasbeenusedsinceOctober2015.
167. 134
168.
135
PleasenotethatsinceBCtAdoesnothave/developcommunity-levelinitiativesitself,thisrecommendationdoesnotseemtoapplyorbeviable.However,wedoagreeandplantohaveinplaceapubliclyavailablerecoursemechanismtoreceiveconcernsfromcommunitiesrelatedtoBCtAmembercompanycommitments.
UNDPBPPS/DIG/IICPSD
Iflocalcommunitiesare‘keystakeholders’oftheBCtAproject,theirviewsmustsomehowbeconsidered.
169. 136
170. 137
171. 138
172.
139
SinceFebruary2016,tocreatesuchseparation,BCtAsharestheduediligenceRATformswiththeDIGteamfortheircommentsandreview.Thisistoaddress
UNDPBPPS/DIG/IICPSD
Noted.
46
thecurrentlackofclarityintheprivatesectorduediligencepolicyrelatedtomulti-partnerinitiatives.AspartofthepolicyreviewandupdatethatUNDPisplanningtoinitiatein2017,furtherclarityonthiswillbeconsideredintherevisedPolicyonDueDiligenceandPartnershipswiththePrivateSector.
173. 140
174.
141
WeacknowledgeandappreciatetheeffortsbyUNDPtoprotecttherightsofpopulationbutrequestthatthereportreflectsthefactsongroundandcorroboratedinformationgatheredfromcommunities,toreviseandfinalizethereport.
MinistryofAgriculture,AnimalIndustryandFisheries;
Noted.