Download - Comment Matrix: SECU0002, A Compliance Report … Comment Matrix: SECU0002, A Compliance Report related to the Business Call to Action Project Social and Environmental Compliance Unit,

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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

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8,500acresonly25hectaresisindispute.

Uganda,PharisKimaru

theamountoflandindispute(numbersprovidedtoSECUvariedwidely,anditwasoutsidethescopeofSECU’sinvestigationtodeterminethecorrectnumberindispute).

4.

General

ThatthelandindisputehasnotbeenusedortouchedfortheOilPalmProject.(Evidenceofthiswasprovidedtotheinvestigators.)Thatthereforetheclaimsoflandgrabbingandgrossviolationofhumanrightsarenotapplicabletothissetoffactswhichthereportdoesnotdisputeorcontradict.


Asnotedinthereport,duediligencerelatingtoapotentialpartnertoBCtAincludesconsiderationnotonlyofactivitiesproposedunderthepartnership,butalsootheractivitiesthatraisehumanrights-relatedconcerns.

5.

General

ThatthereisnobodyknownastheBugalaFarmersAssociationinBugalaandtherestillexistsnonetodate.


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

6.

General

ThattheOilPalmProjecthastransformedKalangaladistrictsociallyandeconomicallyincludingmillionsofdollarsininfrastructureprojects-ferries,roadsandanultra-modernpowerplant.


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

7.

General

That1,800farmersarebenefittingfromtheprojectandearningBillionsofUgandanShillingseverymonth.AlltheabovearethefundamentalfactsofthesituationinUgandabutlackingfromtheDraftComplianceReport


Seeresponseabove.

8. General

BidcoAfricaandBidcoUganda,

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PharisKimaru

9.

General

Indeedthereportonmostoccasionsseemstoarguewiththefacts:ForInstance:ThatBidcoAfricaistherelevantmemberoftheBusinessCalltoActionandnotBidcoUganda;


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

10.

General

ThatBidcoUgandaisnotasubsidiaryofBidcoAfricabutaseparateentityonitsown;


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

11.

General

ThatBidcoAfricahasnooperationalcontrolofBidcoUganda.


SeeresponseabovenotingthecleartiesbetweenBidcoAfricaandBidcoUganda.

12.

General

WEREITERATEANDCLARIFYTHAT:BidcoUgandalimitedwasneverassociateddirectlyorindirectlyinacquisitionoflandforproject.TheresponsibilityofGovernmentof


TheinvestigationreportnotesthatBidcoUgandawasnotdirectlyinvolvedintheacquisitionoflandfortheproject,butratherrelyingontheacquisitionofthisland-includingacquisitionofthe‘nucleusestate’apparentlysupportedbyandbenefitingBidcoUganda.Thereportdescribeswhythisis

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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?


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

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14.

General

Anyonecanmakeaclaim.Theroleofaninvestigationistoascertaintheveracityoftheclaimsnottousethemtomakefreshassertions.


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

15.

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.

17.

General

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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.

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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.

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o FacilitatesImpactMeasurementandKnowledgeCaptureo OffersLinkagestoServices,Finance,andPeertoPeerLearning

22. 3

23.

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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.

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AnimalIndustryandFisheriesasthemaingovernmentpartnerofOPULandtheVegetableDevelopmentOilProjectthroughthePPP.

25.

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

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

TheinvestigationreportnotesexplicitlythatSECUisnotdrawinganyconclusionsrelatedtothisissue.Thereportdescribestheland-rights-relatedissuesonlytoindicatethatthesewereoutstandingissuesthatdidnotappeartobeconsideredfullybyUNDPduringitsduediligenceprocess.

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27. 7

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29.

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PleasenotethattheProDocwasreviewedbythePACJuly2014;endorsedbyDSCSeptember2014;andduetotherestructuringandrelocationofBCtAtoIstanbul,theProDocbudgetandlogframewereupdatedinMarch2015.TheenddateoftheProDocisJune2017.

UNDPBPPS/DIG/IICPSD

SECUhasincludedinthereportallinformationavailabletoitregardingthetimelineofthePACandProdocapprovalprocess.

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30. 10

31. 11

32. 12

33. 13

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35.

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

UNDPBPPS/DIG/IICPSD

SeeresponseinRow21.

36.

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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.

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

UNDPBPPS/DIG/IICPSD


39. Changethewordingfrom“excerptedfromtheUNDP/PSDform”to

UNDPBPPS/DIG/IICPSD

ThefullrequiredUNDPRiskAssessmentToolwasnotapplied-ashortcomingdescribedintheinvestigationreport.The

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“excerptedfromtheUNDPRiskAssessmentTool”.

informationwasexcerptedfromtheUNDP/PSDformusedbyBCtA.

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

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41.

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

UNDPBPPS/DIG/IICPSD


42.

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PleasenotethatapplicationtoBCtAhas2separatesteps.Thefirstistheduediligenceprocess.Thesecondstepisinrelationtothecriteriamentionedinparagraph20,whichassessestheeligibilityoftheInclusiveBusinessCommitmentofthecompany

UNDPBPPS/DIG/IICPSD

Noted.Reportrevisedtoensurethatpointisclear.

43.

21

PleasenotethatthespecificinclusivebusinesscommitmentfromBidcotoBCtAinKenya(anddifferentfromtheUgandaPalmOilmodel)is:

UNDPBPPS/DIG/IICPSD

Noted.

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

44.

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

UNDPBPPS/DIG/IICPSD


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46.

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

UNDPBPPS/DIG/IICPSD

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

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

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

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48. 26

49.

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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.

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

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timeofthecompany'sapplicationtojointheinitiative.

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

51.

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PleasenotethattheabbreviationofOilPalmUgandaLimited(OPUL)isincorrect(UPOL)inthisparagraphaswellasinparagraphs91and93.

UNDPBPPS/DIG/IICPSD


52. 30

53. 31

54.

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

UNDPBPPS/DIG/IICPSD

Paras.51to63oftheinvestigationreportindicatehowtheUNDPPolicyandhumanrightsandgenderconsiderationswererelevanttotheproject.ReportrevisedtoreflectacknowledgementthattheUNDPPolicyonDueDiligenceandPartnershipswiththePrivateSectorandthegenderand

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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.

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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.

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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.

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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


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.


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


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?



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


SeeresponseinRow2.

35

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.

36

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

130.

100

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


Reportrevisedtoclarify.SeeresponseinRow129.

131.

101

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


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.


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.