Comment Matrix: SECU0002, A Compliance Report … Comment Matrix: SECU0002, A Compliance Report...

CommentMatrix:SECU0002,AComplianceReportrelatedtotheBusinessCalltoActionProjectSocialandEnvironmentalComplianceUnit,OAI,UNDP

Row Paragraph

#/Section/GeneralofReport

Comment Submittedby SECUResponse

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.

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

8,500acresonly25hectaresisindispute.

Uganda,PharisKimaru

theamountoflandindispute(numbersprovidedtoSECUvariedwidely,anditwasoutsidethescopeofSECU’sinvestigationtodeterminethecorrectnumberindispute).

General

ThatthelandindisputehasnotbeenusedortouchedfortheOilPalmProject.(Evidenceofthiswasprovidedtotheinvestigators.)Thatthereforetheclaimsoflandgrabbingandgrossviolationofhumanrightsarenotapplicabletothissetoffactswhichthereportdoesnotdisputeorcontradict.

Asnotedinthereport,duediligencerelatingtoapotentialpartnertoBCtAincludesconsiderationnotonlyofactivitiesproposedunderthepartnership,butalsootheractivitiesthatraisehumanrights-relatedconcerns.

General

ThatthereisnobodyknownastheBugalaFarmersAssociationinBugalaandtherestillexistsnonetodate.

ThecomplainantsrefertothemselvesastheBugalaFarmersAssociation.ItisbeyondthescopeofSECU’sinvestigationtodetermineifthisisaformal,registered,orlegallyrecognizedentity.SECU’sreferencetothisgroupisnotanendorsementofitslegalstatus.

General

ThattheOilPalmProjecthastransformedKalangaladistrictsociallyandeconomicallyincludingmillionsofdollarsininfrastructureprojects-ferries,roadsandanultra-modernpowerplant.

TheinvestigationreportnotespreviousevaluationsthatindicatedbenefitsoftheOilPalmProject.Itwasbeyondthescopeoftheinvestigation,however,todeterminetherelativebenefits,costs,andrisksofthatproject.

General

That1,800farmersarebenefittingfromtheprojectandearningBillionsofUgandanShillingseverymonth.AlltheabovearethefundamentalfactsofthesituationinUgandabutlackingfromtheDraftComplianceReport

Seeresponseabove.

8. General

BidcoAfricaandBidcoUganda,

PharisKimaru

General

Indeedthereportonmostoccasionsseemstoarguewiththefacts:ForInstance:ThatBidcoAfricaistherelevantmemberoftheBusinessCalltoActionandnotBidcoUganda;

ReportrevisedtoincludeadditionalinformationoutliningthetiesbetweenBidcoAfricaandBidcoUganda.Asexplainedintheinvestigationreport,forpurposesofBCtA/UNDPconductingitsduediligenceandriskassessment,thetiesconnectingBidcoAfricawithBidcoUgandaaresufficientsuchthatUNDPshouldhaveconsideredbothentities’activitiesandriskswhendecidingwhethertoacceptBidcointotheBCtAalliance.Itwasbeyondthescopeoftheinvestigationtodeterminetheexactlegalandfinancialrelationshipbetweenthetwocompanies.

General

ThatBidcoUgandaisnotasubsidiaryofBidcoAfricabutaseparateentityonitsown;

Seeresponseabove,andadescriptionintheinvestigationreportofrelevantconnectionsbetweentheentities.TheinvestigationreportcitestolanguageintheBidcoAfricawebsitedescribingOilPalmUgandaLimitedasoneofBidcoAfrica’soperations.InarecentdecisioninalawsuitrelatingtolandacquiredfortheOPULpalmoilproject,theHighCourt’sjudgmentnotedthatnotonlyBidcoUgandaandOPUL,butalsoBidcoOilRefineriesLtd(BidcoAfrica’spriorname)werevaliddefendantsinthesuit–givenBidcoAfrica’sparticipationintheagreementwiththeUgandangovernment.

General

ThatBidcoAfricahasnooperationalcontrolofBidcoUganda.

SeeresponseabovenotingthecleartiesbetweenBidcoAfricaandBidcoUganda.

General

WEREITERATEANDCLARIFYTHAT:BidcoUgandalimitedwasneverassociateddirectlyorindirectlyinacquisitionoflandforproject.TheresponsibilityofGovernmentof

TheinvestigationreportnotesthatBidcoUgandawasnotdirectlyinvolvedintheacquisitionoflandfortheproject,butratherrelyingontheacquisitionofthisland-includingacquisitionofthe‘nucleusestate’apparentlysupportedbyandbenefitingBidcoUganda.Thereportdescribeswhythisis

UgandawastoacquirelandfreeoffanyencumbrancesandprovidefortheprojectonleaseholdbasisforthedevelopmentofOilPalmandweareawareofprocessoflandacquisitionprocessfollowedbythegovernmentasdetailedbelow.Alandacquisitiontaskforce,composedofrepresentativesof1.KalangalaDistrictLocalGovernment2.MinistryofAgriculture,AnimalIndustryandFisheries3.MinistryofLands,HousingandUrbanDevelopment(representedbyCommissionerLandRegistration)4.NationalEnvironmentManagementAuthority5.MinistryofFinance,PlanningandEconomicDevelopment6.MinistryofJusticeandConstitutionalAffairs7.UgandaInvestmentAuthority8.ChiefGovernmentValuer,representingallstakeholdersimpactedbythelandacquisition.

relevanttotheduediligenceanalysis.

General

Theinvestigatorsfailedtoproperlyinvestigateclaimsmadeininterviewstakinginformationatfacevalue:Meetingswithagroupofindividualsincludedassertionsthat29familieswerewronglydisplaced.QuestionsFromwhatlandspecifically?Howweretheydisplaced?Bywhom?Whatisthepresentstateoftheland?Havetheysoughtanylegalredress?

SECUdidnotinitsreportacceptas‘true’theassertionsthatillegallandacquisitionsandhumanrightsviolationstookplace.SuchafindingisoutsidethescopeoftheinvestigationandoutsidethescopeofSECU’sinvestigatorymandate.Thereportdidnotethatweheardtheseviews,aswellaschallengestotheseviews.ThepresenceoftheseconflictingviewsisrelevanttoBCtA’sduediligenceanalysisindecidingwhetherapartnershipwouldbeappropriate.

General

Anyonecanmakeaclaim.Theroleofaninvestigationistoascertaintheveracityoftheclaimsnottousethemtomakefreshassertions.

ThepurposeofthisinvestigationwastoreviewUNDP’scompliancewithitspolicies,particularly,inthiscontext,policiesrelatedtoduediligence.SeeresponseinRow2.

General

TheUgandanHighCourthassinceclearedtheOilPalmProjectandBidcoUgandaofenvironmentaldegradationcharges.(LCDSCaseno215of2007)Judgmentattached.

NotedthatBidcoUganda,OPUL,andBidcoOilRefineries(akaBidcoAfrica)wereclearedofenvironmentaldegradationchargesinthatcase.

16. General

TheDraftComplianceReportgoesoutofitswaytolegitimizeandnormalizetheexaggeratedclaimsinthecomplaint:‘Buttherehavealsobeensomelesspositiveoutcomes.Manyofthenewjobopportunitieshavebeenfilledbymigrants,puttingpressureonlocalhealthandeducationservices.Therisingpriceoflandasaresultofthedevelopmenthasincreasedtensionsandledtorisingconflicts,particularlyassomeabsenteelandownershavebeguntoreturn.Thereareconcernsaboutlonger-termimpactsonhouseholdfoodsecuritywhentheoilpalmtreesbecometoolargetoallowintercropping.Andtheenvironmentalimpactshaveledtoagreatdealofpublicscrutiny,particularlygiventhesizeoftheinvestment.Finally,athouseholdlevel,therehasbeenareportedincreaseindomesticconflict,althoughmorepositiveimpactsareevidentintermsof

ThequotationreferencedisexcerptedfromareportissuedbyIFADandIDS.TheinvestigationreportincludesbothpositiveandnegativeobservationsbyIFADandIDS.Seeparas.111to116.

General

women’sempowermentandbuildingcapacityoffarmers’organizations.”NoneoftheseoutcomesareBidcoUgandaspecificandtheyarenothingclosetotheexaggeratedclaimsof‘grossviolationofhumanrightsandlandgrabbing”attributedtoBidcoUgandainthecomplaint.

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.

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.

o FacilitatesImpactMeasurementandKnowledgeCaptureo OffersLinkagestoServices,Finance,andPeertoPeerLearning

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.

AnimalIndustryandFisheriesasthemaingovernmentpartnerofOPULandtheVegetableDevelopmentOilProjectthroughthePPP.

Underparagraph5,itisstatedthat“Theinvestigations,includingfieldwork,wasfocusedontheadequacyofUNDP’sduediligenceandrelatedtransparencyinthecontextoftheBCtAproject–noonwhetherBidcohasorhasnotviolatedhumanrightsoriscomplicitinhumanrightsviolations.Thelatterdeterminationsisbeyondthescopeofthereport”,thereportseemstosuggestthatBidcointentionallyorknowinglyincolveditselfindeprivingthepublicoftheirlandandlivelihood,whichwefindtobeuntrue.

MinistryofAgriculture,AnimalIndustryandFisheries;VegetableandOilDepartmentProject(VODP),C.M.Masaba

TheinvestigationreportnotesexplicitlythatSECUisnotdrawinganyconclusionsrelatedtothisissue.Thereportdescribestheland-rights-relatedissuesonlytoindicatethatthesewereoutstandingissuesthatdidnotappeartobeconsideredfullybyUNDPduringitsduediligenceprocess.

PleasenotethattheProDocwasreviewedbythePACJuly2014;endorsedbyDSCSeptember2014;andduetotherestructuringandrelocationofBCtAtoIstanbul,theProDocbudgetandlogframewereupdatedinMarch2015.TheenddateoftheProDocisJune2017.

UNDPBPPS/DIG/IICPSD

SECUhasincludedinthereportallinformationavailabletoitregardingthetimelineofthePACandProdocapprovalprocess.

30. 10

31. 11

32. 12

33. 13

34. 14

Asperthecommentaboveregardingparagraph2,pleasecorrectthepremisethatBCtA’sroleisto“facilitateandsupportengagementsbetweenprivatesectorbusinessesandlow-incomepeople…””.

UNDPBPPS/DIG/IICPSD

SeeresponseinRow21.

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.

“Thisformcontainsasummary….applicationformfilledthatisfilledinbythecompany”(removerepetitive“filled”)

UNDPBPPS/DIG/IICPSD

39. Changethewordingfrom“excerptedfromtheUNDP/PSDform”to

UNDPBPPS/DIG/IICPSD

ThefullrequiredUNDPRiskAssessmentToolwasnotapplied-ashortcomingdescribedintheinvestigationreport.The

“excerptedfromtheUNDPRiskAssessmentTool”.

informationwasexcerptedfromtheUNDP/PSDformusedbyBCtA.

Muchoftheinvestigationreportdescribesdifferencesbetweentheformused–theUNDP/PSDform–andtherequiredform–theUNDPRAT–andtheimplicationsofnotusingtherequiredform.

40. 18

Aconsistentstyleandprotocolshouldbeadoptedthroughoutthereportinregardstomentioningthenamesofstakeholders.Inthedraftnostakeholder(internalorexternal)arementionedbynameexceptforMr.Sohbani.Ifnameswillnotbeusedforallstakeholders,Mr.Sobhanicanbereferredtoasthe“GlobalProgrammeAdvisorandactingBCtAProgrammeManageratthetime”.

UNDPBPPS/DIG/IICPSD

PleasenotethatapplicationtoBCtAhas2separatesteps.Thefirstistheduediligenceprocess.Thesecondstepisinrelationtothecriteriamentionedinparagraph20,whichassessestheeligibilityoftheInclusiveBusinessCommitmentofthecompany

UNDPBPPS/DIG/IICPSD

Noted.Reportrevisedtoensurethatpointisclear.

PleasenotethatthespecificinclusivebusinesscommitmentfromBidcotoBCtAinKenya(anddifferentfromtheUgandaPalmOilmodel)is:

UNDPBPPS/DIG/IICPSD

Noted.

“ThroughtheBidcoFullValueChainInitiative,thecompanyisexpandinglocalsourcingofrawmaterials(wheat,maize,sunflower,soya,rice,pulses,sugarcaneandtomatoes)fromsmallholderfarmers.Bidcooffersfarmersoff-takecontractsthatspecifyupfrontmarketpriceandsupplyconditions,aswellasoffertechnicaltrainingtoensureincreasedproductivity.”

It’simportanttomakethedistinctionthattheinitiativewasnotapilotbutratherascale-upofanalreadyexistinginclusivebusinesseffortsthathadalreadydemonstratedbenefitstothelocalcommunities.TheBCtAinitiativeaimedtofurtherthesebenefitstoalargernumberoffarmers.Thewaypoint22iscurrentlyphrasedleadsthereadertobelieveUNDPisapprovingastart-upinitiativewithtenuousbenefits.

UNDPBPPS/DIG/IICPSD

45. 23

Bidco’scommitment,alongwith4otherapplications,wassenttotheDSCforreviewonSeptember11th.Thereviewemail“askedtoprovidefeedbackandcommentsbacktotheBCtASecretariatbySeptember16th”andstatedthat“ifnoobjectionsariseduringthereview,theSecretariatwillextendmembershiptothe

UNDPBPPS/DIG/IICPSD

ReportrevisedtoreflectlanguageintheSeptember11email.ReportfurtherrevisedtoreflectthatlanguageinthisemailisnotconsistentwiththeprocessforDSCapprovalasdescribedinaletterdated11March2016fromMr.SobhanitoDr.Bissell(SECULeadComplianceOfficer),whichnotesthatpartnershavetwoweekstoreviewandraiseanyobjections.Thereportisfurtherrevisedtoindicatethatalthough‘no

applicants.”TheacceptanceemailtoMr.ShahwassentonSeptember18th,afterallquestionswereaddressedand“noobjections”responsewassecuredfromallDSCmembers.

objections’weremadeby16September(thecitedapprovaldate)theSIDArepresentativetotheDSCraisedaquestionon16SeptemberrelatedtoBidcoandpalmoil,andaresponsewasprovided17September–afterBCtAapprovedBidco’smembership.TheDSCrepresentativerespondedwithabriefthankyounoteon18September.

47. 25

48. 26

Thatthedisputeisincourtandthereareonly3officialplaintiffsinthecourtrecords.Theclaimof100farmersmadeinthecomplaintisthereforeanexaggerationaswell.Clause27oftheDraftcompliancereportbuys100%intothisexaggeration:Thecomplaintclaimsthat100suchfarmershaveaccusedaBidcoAfricaLtdventureinUganda,OilPalmUgandaLimited(OPUL)of'violatinghumanrights,destroyingtheenvironmentandgrabbinglandfromsmallholderfarmers'.Atthetime,thesefarmerswereattemptingtosecurearesponsetotheseconcernsinthecontextofthisUgandaproject,andwereawaitingacourtdecisionintheirlawsuitagainstOPUL.

Theinvestigationreportnotesthatitisonlya‘claim’thereare100suchfarmers.Itwasbeyondthescopeofthereporttodeterminetheprecisenumber.Weagree,however,thatitwouldbeclearernottousethephrase‘thesefarmers’asitcouldbereadassupportiveoftheclaim.Wehaverevisedthetextaccordingly.

50. 28

InordertoclarifytheUNGlobalCompactroleandposition,wewouldrecommendtoincludeanadditional

UNGlobalCompact,TulsiByrne

Reportrevisedwiththeproposedlanguage.

paragraphonpg.28thatreadsasfollows:AsmentionedontheUNGlobalCompactwebsites"TheUNGlobalCompactisnotaperformanceorassessmenttool.Itdoesnotprovideasealofapproval,nordoesitmakejudgmentsonperformance".ItisalsoexplainedthatnewapplicationsforparticipationarecheckedagainstaglobaldatabasetoseeifthecompanyconcernedisthesubjectofasanctionorothermeasurebytheUNSecurityCouncilorotherinternationalinstitution,whichisreasonforexclusion,aswellasbeinginvolvedinthemanufacture,saleetc.ofanti-personnellandminesorclusterbombs.AnyotherinformationfromthedatabaseissharedwiththeLocalNetworkwherethecountryislocatedaskingifthereisanygoodreasontheyareawareofwhythecompanyoughtnottobepermittedtojointheinitiative.NoobjectionswereraisedonBidcoAfricaattimeofitsapplicationtojointheUNGlobalCompact,hencethecompanywasadmittedasaparticipantinOctober2009.However,itshouldbenotedthatthecomplaintthatistheobjectofthisreportwasnotraisedatthe

timeofthecompany'sapplicationtojointheinitiative.

TheUNGlobalCompactisavoluntaryinitiative,andthereforedoesnotpoliceorenforcebehaviororactionsofcompanies.RathertheinitiativeencouragescompaniestoreporttheirsustainabilityactionstotheirstakeholdersthroughtheUNGlobalCompactplatform-theCommunicationonProgress(COP),anannualreportthatdetailsthecompany'sworktoembedtheTenPrinciplesintostrategiesandoperations,aswellaseffortstosupportsocietalpriorities.BidcolastsubmittedaCommunicationonProgresson25October2016andisactivestanding(COPthatmeetstheminimumrequirements).Thenextoneisdue25October2017.

PleasenotethattheabbreviationofOilPalmUgandaLimited(OPUL)isincorrect(UPOL)inthisparagraphaswellasinparagraphs91and93.

UNDPBPPS/DIG/IICPSD

52. 30

53. 31

*Commentonpara32-36*Paragraph32notesthat“SocialandenvironmentalcommitmentsthatapplytoUNDPprojectsarereflectedinUNDP’sPOPPandineachProdoc.”

UNDPBPPS/DIG/IICPSD

Paras.51to63oftheinvestigationreportindicatehowtheUNDPPolicyandhumanrightsandgenderconsiderationswererelevanttotheproject.ReportrevisedtoreflectacknowledgementthattheUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectorandthegenderand

Basedonthisdefinition,thissectionshouldreferencetheUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSector(inthePOPP)andthegenderandhumanrightsconsiderations(Annex6ofProdoc),askeysocialandenvironmentalcommitmentsrelatedtotheproject.

humanrightsconsiderationsinAnnex6ofProdocwerekeycommitmentsoftheproject.

55. 33

56. 34

57. 35

58. 36

59. 37

60. 38

61. 39

TheinclusionofamandatoryduediligenceprocessandcommitmentsspecifictohumanrightsandgenderintheProdocconstitutethekeymanagementmeasuresaimedtoavoidandmitigatetherisksassociatedwiththeprivatesectorpartnersandtheirvoluntaryactions.

UNDPBPPS/DIG/IICPSD

TheProdocincludescommitmentstohumanrightsandgender,butdocumentationrelatedtoBidco’sadmissionintotheBCtAdoesnotindicatethatthesespecificcommitmentsweremetduringtheduediligenceprocess,i.e.,documentationrelatedtoBidco’sadmissionintotheBCtAdoesnotreflectexplicit,thoroughconsiderationofthehumanrightscriteriaand/orchecklistinAnnex6.Theinvestigationreportendeavorstodescribetheseshortcomings.Inotherwords,thepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.

63. 41

64. 42

65. 43

Pleasenotethatthehumanrightsandgendercommitments(Annex6whichispartoftheProDoc)states:“BCtAScreeningCriteriaandDueDiligenceProceduresforGenderandHumanRightsInclusion”TheBusinessCalltoActionSecretariatperformsaduediligencereviewofallcompaniespriortosubmittingtheirBCtAapplicationsformembershipconsideration.Thisduediligencereviewexaminesanymajorenvironmental,social,andgovernancecontroversiesassociatedwiththeapplicant,whichincludesanyhumanrightsviolations,and/orcontroversiesinvolvingvulnerableordiversegroupssuchaswomen,youth,andindigenouspeoples.Thisreviewresultsinadecisiontoeitherengageordisengagewiththecompany,withtheintentionoflimitinganyrisksofassociationwiththeBCtAanditssupportingPartners.

UNDPBPPS/DIG/IICPSD

Textinparas.71through91intheinvestigationreportreferencesthislanguageanddescribesshortcomingsrelatedtoUNDPattentiontothesecommitmentsandexistingUNDPPolicy.See,also,responseinRow62.ThepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.

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.

companyitselfhasnotcontributedtothoseimpacts.Theseincludeviolationofhumanrightsorcomplicityinhumanrightsviolations,useortolerationofforcedorcompulsorylabor,anduseortolerationofchildlabor,amongothers.Shouldanyevidencebefoundofongoingviolationsduringtheduediligencereview,BCtAwillfollowUNDP’spolicytodiscontinueengagementwiththecompany.

69. 45 70.

Paragraph46shouldalsoacknowledgethattheduediligenceprocessandhumanrightsandgenderconsiderationsthatareintegratedintotheprojectwereintendedtoaddressthesocialandenvironmentalrisksassociatedwithengagement.

UNDPBPPS/DIG/IICPSD

SeeresponseinRow62.ThepresenceofthislanguageintheProdocisnotevidencethatcommitmentsweremet.

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.

resultswillbeCategory1projects)”.However,whethertheprojectwasCategory1or2,thiswouldnotchangetheneedtoensurestrongduediligenceprocessesareinplacepriortotheacceptanceofnewmembersintotheBCtA.

StressingtheapplicationofthemandatoryUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectoraswellasthefocusongenderandhumanrightsintotheBCtAPhaseIIProdocwerepartlyinresponsetofeedbackreceivedfromnon-projectstaffduringtheappraisalprocess.Paragraph48doesnotacknowledgethattheseelementswereincludedintheprojectasaresult.

UNDPBPPS/DIG/IICPSD

Para.48isrevisedtonotethattheProdocwasrevisedtoincludetheseUNDPcommitmentsinresponsetofeedbackduringtheappraisalprocess.Paras.53and54oftheinvestigationreportalreadyindicatethattheProdocincludestheseUNDPcommitments.Note,however,beginningwithpara.61,theinvestigationreportdescribesSECUfindingsthatthesewerenotfullyappliedinthiscontext.Para.64andsubsequentparagraphsdescribehowwhatwasactuallydonebyUNDPcomparedtowhatwasrequiredundertheUNDPPolicyandrelativetohumanrights.

73. 49

AsmentionedduringtheinterviewswiththeBCtAteam,BCtAbeganusingthelatestRATforminOctober2015.Thisincludes,assuggestedinParagraph50,theassessmentofcompanieswillingnessandcapacitytoaddresssocialandenvironmentalconcerns.BCtA’songoingimprovedpracticessinceOctober2015couldbeacknowledgedinthereport.

UNDPBPPS/DIG/IICPSD

RevisedtonoteUNDPstatementthatBCtAbeganusingthelatestUNDPRATforminOctober2015whenscreeningpotentialBCtAmembers.

Changethewordingto:“ComplementedbytheRiskAssessmentTool(SeeAnnex3)–designedtosupportimplementationofthePolicy-andtheGuidelinesforPrivateSectorPartnerRiskAssessmentTool(Guidelines)–designedtoguidethecompletionoftheRAT.”

UNDPBPPS/DIG/IICPSD

Reportrevisedtoincludemostoftheproposedlanguage.

ThedocumentshouldmentionthatpriortotheRATbecomingamandatoryrequirementforallprivatesectorpartnerships,UNDP’sstandardwasthePSDduediligenceform.

UNDPBPPS/DIG/IICPSD

TheUNDPExecutiveOfficeindicatedthattheywereunabletofindintheirrecordsanyapplicableversionoftheUNDP/PSDformthatmatchedtheoneusedbytheBCtAtoscreenBidco.Additionally,theExecutiveOfficenotedthattherewasnothingintheirrecordsindicatingconsiderationofanyofficialPSDformpriorto2013.

77. 53

78. 54

*Commentsonpara55-59*PleasenotethatwhencompaniesbecomemembersofBCtA,theyreceiveawelcomingletterfromBCtAonbehalfofallitspartners.NoMoUiseversignedwithUNDP.However,wedorecognizethatwithintheexistingpolicy,thereisnoclarificationonthistypeofmulti-partneralliance,withstand-alonebrandingandgovernance.Toaddressthis,apolicyreviewandupdatewillbeconductedin2017whichwillincludeconsiderationof

UNDPBPPS/DIG/IICPSD

Noted.

howtoamendthePolicyonDueDiligenceandPartnershipswiththePrivateSectortoclarifyapplicationinmulti-partneralliances,wherestakeholdersdon’thaveorareperceivedtohaveadirectrelationshipwithUNDP.

80. 56

81. 57

82. 58

83. 59

84. 60

Pleasenote,thatwhenBidcowasacceptedintotheBCtA,theUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectorwasapplied;however,bymistaketheRATformthatwasusedtorecordtheduediligencefindingswasanoutdatedversionoftheofficialUNDPduediligenceform(updatedtotheRATinNovember2014).

UNDPBPPS/DIG/IICPSD

Asdetailedintheinvestigationreport,projectdocumentationdoesnotsupporttheassertionthattheUNDPPolicywasfullyapplied.Tothecontrary,forthereasonsexplainedinthereport,itappearsitwasnot.

See,also,responseinRow76.

PleasenotethatwhiletheBCtASecretariataddedthissentenceonthewebsite,theintentwasnottobeexcludedfromthepolicybutratherto

UNDPBPPS/DIG/IICPSD

Noted.ReportrevisedtoreflecttheSecretariat’sacknowledgmentthatthefullPolicyandRATapply.

clarifytocompaniesandotherstakeholderstheirrelationshiptoBCtAasamulti-stakeholderpartnership.ThisisdemonstratedbythecontinuedapplicationofPolicyonDueDiligenceandPartnershipswiththePrivateSectorinthecontextofBCtA.

87. 63

ThissectionshouldclarifythatUNDP/PSDformwasnot“anotherriskassessmenttool”butaformthatwaspartofUNDP’sduediligenceprocesspriortothedevelopmentandwidedisseminationofthecurrentRATform(launchedinNovember2014).ThePSDformcomplementedtheRiskAssessmentToolandprovidedanoverviewofcorporatecontroversiesandother,relevantcorporatesocialresponsibilityinformation.BCtAhaddiligentlyfollowedtheguidanceprovidedintheRiskAssessmentToolalbeititcontinuedtousetheoldformafterthenewonehadbeenapprovedanddisseminated.

UNDPBPPS/DIG/IICPSD

Asdetailedintheinvestigationreport,projectdocumentationdoesnotsupporttheassertionthattheUNDPPolicywasfullyapplied.Tothecontrary,forthereasonsexplainedinthereport,itappearsitwasnot.See,also,responseinRow76.

89. 65

90. 66

ThestatementthatPSDduediligenceform“appearsexplicitlytailoredforuseonlyinprescreening”isinaccurateasthePSDwasaUNDPduediligenceformusedpriortothecurrentRATform.

UNDPBPPS/DIG/IICPSD

Reportrevisedtoremovereferencetotheform’stailoreduseinprescreening.SeeresponseinRow76.

92. 68

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.

marketingofbreastmilk.However,theimportantdistinctionneedstobemade–UNDP/PSDformisnotaformdevelopedbytheBCtA,itwasaUNDPAgency-wideformpriortoNovember2014.Therefore,theProDocdoesnotintroducea“separate”BCtAlistofexclusionarycriteria.

97. 73

Asperpointaboveonparagraph72,thisstatementisinaccurate.

UNDPBPPS/DIG/IICPSD

SeeresponseinRow96.

99. 75

100. 76

102. 78

103. 79

104. 80

105. 81

106. 82

107. 83

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

todowithOilPalm.BidcoAfrica’sInitiativefocusesonSunflowerandSoyaBeansinKenya.Theextracarefulapproachisnotrequired.

extracarefulapproachisrequired’(Policy,pg.5).SECUnotesthisaspotentiallyrelevant,andworthyofconsiderationbyUNDP.

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

Thestatementthat‘BidcoUgandaisajointventurebetweenWilmarGroup…andBidcowithfinancingfromIFAD’isnotaSECUstatement.ItwasastatementfromaUNDPmemberoftheBCtASecretariattoaDonorSteeringCommitteemember.Theinvestigationreportisrevisedtoreflectthisdisagreementwiththisstatement.

sectors,‘anextracarefulapproachisrequired’(Policy,pg.5)

Thestatementthat“notallexclusionarycriteriawereincludedandconsideredduringduediligence”isinaccurate.BCtAhadconductedtheduediligenceinlinewiththeRiskAssessmentToolguidancewhichlistsallrelevantexclusionarycriteria.Thus,allofthecriteriawereconsideredwhenassessingthecompany.

UNDPBPPS/DIG/IICPSD

Projectdocumentationdoesnotreflectfullandadequateconsiderationofallexclusionarycriteria.Tothecontrary,asdetailedintheinvestigationreport,documentationprovidedreflectsinadequateattentiontoUNDPPolicy.

*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.

*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.”

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.

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

researchatthetimeshowedthattherehadbeenonespecificdispute,whichhadbeenresolved.

workingconditionsforanumberofyears:2011workersstrikeparalyzedthefactory.ProtestsresurfacedinMarch2015.’Theinvestigationreportnotesthattheduediligenceformfailstodescribeiftheseissueswereignoredoraddressed.Iftheywereaddressed,thisshouldhavebeendescribedintheduediligenceform.

Pleasenotethatasmentionedoncommentabovetoparagraphs88-89and117-118thefindingsfromIFC’sESreviewandIFAD’sassessmentofOPULwerealsoconsidered.

UNDPBPPS/DIG/IICPSD

SeeresponseinRow113.

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.’

smallholderfarmers.− BidcoAfricainKenyasufferedfromissueswithpoorworkingconditionsforanumberofyears:2011workersstikeparalyzedthefactory.ProtestsresurfacedinMarch2015.− Taximproprietyallegationsin2012:BidcoAfricacontestedincourtahugetaxbillfromtheKenyanTaxAuthoritieswherethecompanylostthecaseandhadtopay.”

123. 97

124. 98

Paragraph99seemstoimplythatBidcowasactivelyinvolvedintheprocessoflandacquisition.TheroleofthelandacquisitionsolelyrestedontheGovernmentasperthecooperatingagreementbetweenGovernmentofUgandaandBidcothatwassignedinApril2003.IndeedGovernmentacquired8,500hectaresoflandforthenucleusestate,fromwhichBidcowasabletoestablish6,200hectaresoilpalmplantation.Outofthisland,onlyabout25hectaresoflandiscontestedandissubjectofthecaseinCourthererefereedto.Thisis0.29%ofallthelandacquired.Thisshouldsayalotonthematerialityofthelandindispute

SeeresponseinRow12.

inrelationtothewholeproject.Consideringhowmanysmallholderfarmerareinvolvedintheprojectcurrently(1,800)withanassuredaccesstomarketfortheproduceandamonthlyincomefromsaleoftheircrops,thisisoneofthefewsuccessfulcasesofinclusiveinvestment.Farmershavea10%shareholdinginOilPalmUgandaLimited(OPUL)andtwopositionsontheBoardofDirectors.Thereisapricingformulainplacethatensuresfairpricingforfarmers’oilpalmfreshfruitbunches,henceaddressingchallengesassociatedwithamonopoly,andBidcohassignedofftheagreementacceptingtofollowtheformula.Thecompanyensuresthatfarmersusethesamequalityofinputsusedbythecompanylikeseedingandfertilizersandinaddition,providestechnicalknowhowtothefarmers.Thecompanymeetswithfarmerleaderseverymonthtodiscussthepricethroughapplicationofthepricingformulaandanyotherissuespertainingtotheoilpalmbusiness.Thecompanyprovidestheinputsoncreditthatispaidbytheprojectoveraperiodofoneyear.Theseeffortsensureinclusivenessofthebusinessbyinvolvingsmallholderfarmersintheproductionchainandalso

protectingtheirinterest.

126. DespiterecordingandacknowledgingthatBidcoUgandawasnotdirectlyinvolvedinanylandtransactionsthedraftreportgoestoARGUEagainstthisfact:InformationgatheredduringtheinvestigationindicatedthatwhileBidcoUgandawasnotdirectlyinvolvedinacquiringlandforcropsforitsrefinery,itknewof,reliedon,andencouragedthispurchasebythegovernment.BidcoUgandaalso,apparently,wasengagedindecisionsanddiscussionsrelatedtothepurchase.Whatinformationisthisreferredinclause99?

127. Tothebestofourknowledge,therewasnocompulsoryacquisitionofland,andallthelandprovidedbythegovernmentwasacquiredonwillingbuyerwillingsellerbasisfollowingChiefGovernmentValuer’svaluationandinputsfromtheothermembersofthetaskforce.Therewerenoevictionsofpeopleonthelandacquiredfortheproject.TheProjecthasaclearmandatethatensuredtakingpossessionofsuchlandwhichisfreeoffanyencumbrances.Wereconfirmthatcompanyhavenottakenpossessionofanylandwhich

SeeresponseinRow2.

hasanyeconomicorcommercialcropValue.Thisisevidentfromthefactthatthoughthegovernmentacquired8500Haoflandfortheproject,only6200hasbeenusedforthedevelopmentofOilPalmundertheprojectleaving1,500Hatowardsenvironmentalzoneand800Hatocommunitiestocontinuewiththeireconomicactivities.Doestheinformationgatheredreferredtoinclause99contradictordisputethisnarrative?

128. Thefactthatthereiscross-shareholdingbetweenthetwocompaniesisnotenoughtodismisstheabovedemarcationsasreadinclause99:“However,BidcoAfricahasatleastfinanciallinkstoBidcoUgandaandtheKalangalaoilpalmprojectreferencedinthecomplaint.”

SeeresponsesinRow9.

129. Underparagraph100,itisstatedthat“ItisnotgoodforBidcoeventiftheyweren’tinvolvedinlandacquisition,itlooksbad.Theyhavetitle(lease)byUgandaLandCommission.EvenifBidcowinsthecase,ifalocalmanisnothappy,itdoesn’tlookgood”.Whilethisisacommentbyanindividualentitledtohisorherviews,itisnottenableforthecompanyorgovernmenttostopactivitiesbecause

Theinvestigationreportusedthisquoteasoneexampleoftheimportanceofrobustduediligencetoreputationalrisk.Nevertheless,thereporthasbeenrevisedtodeletethequote.

ofanyandeverycomplaintorclaimraisedwithoutconsideringthemeritoftheissue.Otherwise,itwillnotbepossibletoimplementtheprojectoranyotherdevelopmentinitiative.Eachcasehastobeconsidereddependingonhowmaterialitis.Inthiscase,onlyabout0.29%ofthelandisundercontention.

Clause100seekstoassignreputationalresponsibilitytoBidcoUgandabasedonnothingbuttheviewofoneindividual.“ItisnotgoodforBidco.Eveniftheyweren’tinvolvedinlandacquisition,itlooksbad.Theyhavetitle(lease)byUgandaLandCommission.EvenifBidcowinsthecase,ifalocalmanisnothappy,itdoesn’tlookgood.’’

Reportrevisedtoclarify.SeeresponseinRow129.

Paragraph101seemstoimplythatthereareotherareaswheretherearecomplaintsconcerningthelandacquiredfortheproject.Italsoquotes29familiesthatweredisplacedandwomenwithfamilieswhohavebeendeprivedoflivelihood.Thisistoclarifythattothebestofourknowledge,onlyonepieceoflandhasbeencontestedandisabout0.29%ofthetotallandacquired.Inaddition,factsofsurveyoftheareabeforeacquisitionshouldhavebeenreceivedbyyourteamfromKalangalaDistrictheadquarters

Reportrevisedtoindicatethisstrongdisagreementwiththeclaimsthat29familiesweredisplaced.

thatledthelandidentificationprocess.Factsofnohousesandcommercialcroppingfoundonthelandshouldhavecomeup.OneneedstoappreciatethatinthispartofUganda,atenanthasrightofuseontheareathatiscultivatedandnotareasthatareforestedbecausethelandbelongstotheregisteredowner.Fromourrecords,therewere11peoplethathadsubsistenceagriculturalactivitiesonabout45acresland,withouttheknowledgeofthelandowner.Duringtheprocessofnegotiationswiththelandowner,theseissuesoftenantsonlandwereraisedandthelandlordagreedtoputaside49acresoflandforcommunity,andlease330acresofthelandthatwasnotutilized,totheproject.Inaddition,hecompensated10tenantswhoacceptedpaymentsandonlyoneturneddowntheoffertobecompensated.Thecomplainantsstillliveonthelandbelongingtothislandowner.Thepracticeofatenantbeingrecognizedbytheregisteredlandownerisknowninthearea.Atokenpay‘kanzu’issupportedtobemadetothelandlord,forthetenanttoberecognizedbythelandlord.Itishopedthatduringtheresearch,thesefactswerecollectedandthereforeinformedthereport.The29families

supposedlydisplacedarethereforeasurprisetotheProject.Suchclaimsneedtobecheckedoutwiththeleadersofthecommunityintheareaandthedistrictandcorroboratedbeforetheycanbewrittendownasfacts.

132. Thisparagraphisunclear,asitismixingpossibleimpactonindividualswithnumberofgeographicallocations.Publicrecordsindicateonlyonelocation–Kalangaladistrict,BugalaIsland.

UNDPBPPS/DIG/IICPSD

ReportrevisedtoindicatethatallconcernsrelatetoKalangaladistrict.

133. 102

134. 103

135. 104

136. 105

137. 106

PleasenotethatthecourtcaseisadisputebetweenMuyisa(thecomplainant)andthelandlord(asrespondent1)andOPUL(asrespondent2).

UNDPBPPS/DIG/IICPSD

Commentnoted.

139. 108

140. 109

Titleaboveparagraph110isunclearPleasenotethesourcesusedbyBCtAduringtheduediligenceincluded:o IFADreport,o IFCenvironmentandsocialassessmento GovernmentofUgandastatementsfromTheUgandanMinistryofAgriculture,AnimalIndustryandFisheries.o Comprehensiveinternetsearchandanalysisofpubliclyavailableinformation,including

UNDPBPPS/DIG/IICPSD

ReportrevisedtoincludethisinformationaswellasaSECUfindingthatthisinformationshouldhavebeenincludedinBCtA’sduediligencedocumentation.

throughtopic-relatedwebsites,resourcecentersanddatabases(separateESGandControversyreportforBidcowasnotavailableintheSustainalyticsdatabase).

142. 111

143. 112

TheDraftComplianceReportgoesoutofitswaytolegitimizeandnormalizetheexaggeratedclaimsinthecomplaint:InClause113itreads:However,asubsequentreportbyIFADandtheInstituteofDevelopmentStudies(IDS)highlightsnotonlymanyofthebenefitsdescribedintheearlierIFADreport,butalsoseveralnegativeunintendedconsequences–includingsomethatarereflectedinthecomplaint.

Thereportendeavorstoincludeallperspectives,includingthosereflectedinbothIFADreports.

145. 114

146. 115

147. 116

148. 117

149. 118

PleasenotethatmembershipstatustoUNGlobalCompactispublicly

UNDPBPPS/DIG/IICPSD

SeeresponseinRow50providedbytheUNGlobalCompact,re:relianceonUNGlobalCompactmembershipaspartofdue

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.

te1.nsf/651aeb16abd09c1f8525797d006976ba/49fa276de3012f8285257ccd004e82c8?opendocument

PleaseclarifywhichoutsidevendorhasassignedBidcoanaveragescore.

UNDPBPPS/DIG/IICPSD

ThereporthasbeenrevisedtoreflecttheUNGlobalCompact’sterminology.BidcolastsubmittedaCommunicationonProgresstotheUNGlobalCompacton25October2016andisin“Active”standing(COPthatmeetstheminimumrequirements).“Active”levelisthemiddleratingfortheUNGlobalCompact,above“Learner”andbelow“Advanced.”

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.

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.’

“assessment”oftheBCtAProdoc.AnenvironmentalandsocialimpactassessmentoftheProdocwouldnotberequired.

PleasenoteadescriptionofeachinclusivebusinesscommitmentincludingobjectivesandmeasurabletargetshavealwaysbeenpubliclyavailableontheBCtAwebsite.

UNDPBPPS/DIG/IICPSD

ReportrevisedtoavoidperceptionthatnoinformationiscurrentlyavailableonBCtA’swebsiterelatedtomembercompanies’commitments.

165. 132

AsmentionedduringtheinterviewwiththeSECUteam,sinceOctober2015BCtAhasbeenusingtheRAT.Werequestthatthisbestatedinthereport.

UNDPBPPS/DIG/IICPSD

ReportrevisedtoindicatethataccordingtotheBCtAtheRATformhasbeenusedsinceOctober2015.

167. 134

PleasenotethatsinceBCtAdoesnothave/developcommunity-levelinitiativesitself,thisrecommendationdoesnotseemtoapplyorbeviable.However,wedoagreeandplantohaveinplaceapubliclyavailablerecoursemechanismtoreceiveconcernsfromcommunitiesrelatedtoBCtAmembercompanycommitments.

UNDPBPPS/DIG/IICPSD

Iflocalcommunitiesare‘keystakeholders’oftheBCtAproject,theirviewsmustsomehowbeconsidered.

169. 136

170. 137

171. 138

SinceFebruary2016,tocreatesuchseparation,BCtAsharestheduediligenceRATformswiththeDIGteamfortheircommentsandreview.Thisistoaddress

UNDPBPPS/DIG/IICPSD

Noted.

thecurrentlackofclarityintheprivatesectorduediligencepolicyrelatedtomulti-partnerinitiatives.AspartofthepolicyreviewandupdatethatUNDPisplanningtoinitiatein2017,furtherclarityonthiswillbeconsideredintherevisedPolicyonDueDiligenceandPartnershipswiththePrivateSector.

173. 140

WeacknowledgeandappreciatetheeffortsbyUNDPtoprotecttherightsofpopulationbutrequestthatthereportreflectsthefactsongroundandcorroboratedinformationgatheredfromcommunities,toreviseandfinalizethereport.

MinistryofAgriculture,AnimalIndustryandFisheries;

Noted.

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