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Nico strydom s3 responsible investment in agriculture

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Success and struggles to obtain FSC TM , with particular attention on issues affecting land acquisition process, negotiations and benefits for smallholders ponsible Investment in Agriculture/Plantatio Regional Land Forum
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Regional Land Forum

Success and struggles to obtain FSC TM, with particular attention on issues affecting land acquisition process, negotiations and benefits for smallholdersResponsible Investment in Agriculture/PlantationsRegional Land Forum

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MissionThe creation, development and management of timber plantation assets in Cambodia which are appealing to international institutional investors

Goals to realize the Missiono Creation of long term value for our shareholders o Establish industry leadership within the regional emerging markets in the following areas: Profitability / Return on Investment Tropical Hardwoods Plantation Technical Expertise Operating Procedures and Efficiencies Environmental Sustainability Social Responsibility

Grandis Timber Mission and Goals

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Grandis Timber Limited is a commercial reforestation company, focused on establishment of timber plantations on previously deforested land.

Main activities include:

1- Establishment of a long-term plantation consisting mainly of Teak trees.Environmental and Social Impact Assessment completed Dec 2010;

To date, we have established 4,441ha.

2- Legally responsible for a 2,256ha Conservation Area (apart from the ELC)

Baseline Wildlife Assessment done by Conservation International during March 2013.

Close working relationship with both Conservation International, Wildlife Alliance and the Forest Administration.

Grandis Timber Background

Location

The Forest Stewardship Council TM (FSC TM) is an independent, not for profit, non-government organisation based in Bonn, Germany.

The mission of the Forest Stewardship Council is to support environmentally appropriate, socially beneficial, and economically viable management of the world's forests.

FSC develops, supports and promotes international, national and provincial standards in line with its mission; evaluates, accredits and monitors certification bodies which verify the use of FSC standards; provides training and information; and promotes the use of products that carry the FSC logo.What is FSC

Ensuring Responsible Investment Grandis Timbers primary tool to carry out its CSR strategy is through FSC certification. FSC was chosen because:

A requirement from the investors.

Worldwide recognized certification systemAs of 12 Jun 2016, 190,644,816 ha certified

Gives investors and directors peace of mind that the company is operating on sound responsible principles and practices;

Company and Operational practices and procedures are verified on an annual basis by external auditors (GFA).

PRINCIPLE #2: TENURE AND USE RIGHTS AND RESPONSIBILITIES Long-term tenure and use rights to the land and forest resources shall be clearly defined, documented and legally established.

Criterion 2.2 Local communities with legal or customary tenure or use rights shall maintain control, to the extent necessary to protect their rights or resources, over forest operations unless they delegate control with free and informed consent to other agencies.

Indicators: 2.2.1 Local communities with legal or customary tenure or use rights are identified, documented and mapped. 2.2.2 The FMU planning process includes participation of local communities or parties with legal or customary tenure or use rights. 2.2.3 Forest managers provide local communities control over forest operations to the extent necessary to protect their rights and resources. 2.2.4 Where communities have delegated control of their legal or customary tenure or use rights or parts thereof, this can be confirmed by documented agreements and/or interviews with representatives of the local communities. Criteria and Indicators

Example of Principle 2 at work

Pre-Audit Dec 2012

Initial Certification Audit Apr 2013

1st Surveillance Audit May 2014

2nd Surveillance Audit Aug 2015

3rd Surveillance Audit Jun 2016

FSC logo has been approved to be attached in email signatures and letter heads in 2014 after 1st Surveillance audit.

Certification History

Social Benefits Increased social benefits, community health and well-being through local employment;

Promotion and Protection of livelihoods

Protection of native plants and animals through conservation management, riparian buffer zone protection and soil erosion mitigation;

Full title to privately owned land.

Protection of community and worker rights

Environmental Benefits Protection of local water supplies through reforestation, riparian buffer zone protection, soil erosion mitigation works and chemical and fuel management;

Limitation of hazardous chemicals

Prevent loss of natural forest cover

Protect rare and endangered forests and wildlife

Company Benefits International recognition of the good work that is being carried out on the project;

Recognized as a responsible company, adding value to our products and increased access to niche markets;

Implementation of a Health, Safety and Environmental Management system to ensure risks (environmental, social, cultural, health and safety) are identified and risk mitigation measures are put in place;

Secure Land Title

Grandis Timber firmly believes that to ensure a profitable business, both the environmental and social contexts in which it operates must also be responsibly managed, and has thus developed a Strategic CSR programme.

Objective: To create a framework that ensures Grandis Timber Ltd (Grandis) creates positive, sustainable impact, reduces company risk, and adds value to the business through action and evaluation.

Strategic CSRStrategic CSR Principles:Uphold Community RelationsMaintain conservationStrengthen tenure

Some challenges are external and can not be overcome by responsible management.

Tenure security remains an ongoing challenge for Grandis Timber on a number of fronts, namely:

Granting of formal title

Boundary adjustments

Pressure on Riparian zones

Spotlight on CSR Principle 3: Strengthen Tenure

Social and Environmental ResponsibilitiesFirst and only company in Cambodia to obtain FSC certificationApart from the Conservation Area, all riparian and other sensitive areas within the concession land is protectedOver 42km of roads through the concession used by Grandis and community, with 2.5km of road outside the concession maintained by GrandisCattle grazing on the concessionContributions for local infrastructure and various social donationsSite infirmary and two day-care centresPromote the use of local products, purchased by GT for nursery purposes Conservation management plan and conservation guards

Social contributions

Cambodia Sub-Decree #146 on Economic Land ConcessionsArticle 4An economic land concession may be granted only on land that meets all of the following five criteria:

The land has been registered and classified as state private land

Approved Land use plan from the Provincial-Municipal State Land Management Committee

Environmental and social impact assessments completed

Resettlement issues are addressed lawfully

Stakeholder consultations

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Article 5

Evaluating Economic Land Concession proposals shall be based on the following criteria:

Increase in agricultural and industrial-agricultural production by using modern technology; Creating or increasing employment;

Promotion of living standards of the people;

Perpetual environmental protection and natural resources management;

Avoidance or minimizing of adverse social impacts;

Any linkages and mutual support between social land concessions and economic land concessions;

Processing of raw agricultural materials, to be specified in the concession contract.

Cambodia Sub-Decree #146 on Economic Land Concessions (contd)

Land Acquisition Process

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Land Acquisition Process (contd)

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Land Negotiation (Directive 001)On the basis of the 01BB order (7/5/2012):Provisionally suspend the granting of ELCs;Under the motto old policies - new action, in June 2012 the Cambodian Prime Minister initiated a massive land registration campaign on untitled former forest land. Private people now receive full property title;Ministries, institutions and responsible authorities to implement the policy (and in particular the policy of the leopard skin formula); RGC shall seize ELC where companies have not complied with the existing legal procedures or with the contract; In case an ELC has received agreement in principle from the RGC before the date of this order, the additional legal principles and existing procedures can be continued;

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Map (before and after)Title Map Before and AfterGrandis Timber lost 1,121.70 hectares (01BB) to three villages. The concession also lost 649.38ha due to an overlapping boundary with a neighboring social concession;During 2015, Grandis lost an additional 152.81ha. 7,896.11 hectares had been registered with 17 tittles.

Map (before and after)Difficulties during processLand grabbing during demarcation process

Pressure on un-used land (i.e. Riparian zones)

Land brokers selling land to un-suspecting buyers

Illegal encroachment on the conservation area (35 illegal charcoal kilns destroyed to date)

Forest Fires

Training on SOPs

Map (before and after)Summary and way forwardGrandis Timber believes a valuable investment requires the responsible management of economic, social and environmental issues.FSC is a positive management tool to ensure that all of these issues are adequately addressed and improved upon.Despite good tools and management, some challenges remain external to management, yet remain a threat to the investment.

Call for Advocacy and ActionIt is the responsibility of those involved in land-based investments (responsible investors, NGOs, policy makers) to bring attention to and resolve tenure uncertainty issues. This is the only way that development, society and environment can all thrive together.

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Thank you for your attention


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