According to a number of local and international NGO’s, journalists and researchers monitoring the situation on the ground, the large scale investment in Sierra Leone between Addax Onyx Group (AOG) and Swedfund, as well as a range of additional investors, is causing concern. The main concern is that the investment is contributing to poverty, decreased access to basic rights and may increase instability and anger amongst the local population. Swedfund is dismissing the concerns, arguing that the monitoring of the situation is sufficient and emphasizes that the project is in its start-up phase and it is therefore too early to measure impact. However, those monitoring the situation are many and conclusions based on their monitoring are coherent and consistent and can therefore not be dismissed.
Swedfund is defined as a bilateral Development Finance
Institution, it is a development finance institution owned by the Swedish
State. In 2011 Swedfund signed an agreement to become equity partner with Addax
Onyx Group (AOG), committing EUR 10 million to an investment in Sierra Leone.
Sweden contributed to create the largest private sector agriculture investment
in Sierra Leone ever made. The purpose: to grow sugarcane and produce ethanol
for the European market. The Swedish Government and Swedfund claims to be
committed to comply with principles for businesses and human rights and to
ensure that investments and aid contributes to ensure respect for human rights.
It is more a rule than an exception that negative impacts on the lives of ordinary
people of large scale investments are ignored. In the majority of cases it is those
that have access to information and the financial capital that are taking
the lead in exploitation of natural resources while working for governments and
multi-national corporations.
It is not unusual that businesses invest in conflicts
and post-conflict affected areas where no or few accountability mechanisms
exist and where corruption is the norm. To meet the rising demand for
accountability of corporations, principles have been developed by international
organizations such as the United Nations and the World Bank. The idea to ensure
that the corporations be held responsible to some kind of reasonable standards
in their pursuit of financial capital is good.
Because of the complicated nature of domestic and
international law and the way it relate to multi-national corporations, an
alternative to strict legal accountability has taken shape in non-binding
international standards. These principles are non-enforceable and may in some
cases rather hamper accountability and access to justice in countries without
proper accountability mechanisms than helping to support them. Investment
agreements may pave the way for abuse and violations of human rights provide
huge financial gains for international investors and a select few of national
political and economic elite.
It is the State that has the responsibility to protect
its population against human rights abuses by third parties, such as
corporations. It is important to distinguish the responsibility of States and
corporations. States ratify legally binding conventions, meaning that they have
a legal responsibility to respect and protect human rights. Corporations are
merely legally bound by the agreement they have entered, be it with a state,
another corporation or an individual. Corporations are bound by the domestic
laws governing the state where they establish their business. Even if
corporations are bound to “respect” human rights, as established in non-binding
UN Human Rights Council and General Assembly resolutions, this is not, to date,
a legal responsibility under international law, rather a moral and ethical
responsibility.
A State does not violate its human rights obligations
if proper accountability mechanisms, such as laws, policies and procedures for
investigations, prosecution in a court of law and effective legal remedies, are
implemented and enforced. In cases of human rights abuses committed by
corporations, it is the responsibility of the State to prevent, punish and
compensate when abuses occur, corporations are not attributed such authority.
It is not unusual that long term agreements are
entered into between States and multi-national corporations. A corporation may
declare in an agreement and in its general corporate social responsibility
strategy that it intend to apply international non-binding standards such as the
UN Guiding Principles on Business and Human Rights. A corporation may apply the
processes established in these international principles and follow the
standards in detail. Yet, the agreement between a State and a corporation may
have severe impact on the human rights and lives of large numbers of people
unless domestic standards and mechanisms exists to hold corporations
responsible for abuse..
When corporations lease large areas of land, people
that remain on the land can in the best-case scenario agree to limited or no
possibility to continue using their land for income and food generating
purposes. They might stay on the land without being able to use it or they
might leave. They might also be offered to start working for a corporation if
such possibilities arise. This often happens under unpredictable and dire
working conditions and lack of alternatives to income makes it hard to opt out.
Take the example of the above mentioned private
investment in Sierra Leone between Addax Bioenergy and the Government of Sierra
Leone. Addax have leased 44 000 hectares of land, equivalent to 26 000 soccer
fields from the Government of Sierra Leone. The land lease agreement is valid
for a period of 50 years. 92 villages exist on the leased area, which is
inhabited by approximately 14 000 people. Around 2000 work opportunities is
estimated to have been created the past four years for these 14 000, 4000 were
promised so far. The people living on the land are paid an average of 8
dollars per 1 hectare and family a year.
The overall lease agreement is entered into between
Addax and local Chiefdom Councils. The lease sets out how, amongst other
issues, the rent of the lease will be distributed between the central
government, the chiefdom council, the local district council and amongst ”those
adults treated as land owners”, (which means those people inhabiting the leased
land). These adults are not legal land owners of the land; since they according
to the laws governing Sierra Leone cannot own land. The Chiefdom Council
agrees, in the lease, to “use their best endeavors” to ensure that the lease is
signed.
The local land owners were also given a document
called an ”acknowledgement agreement” in which they by receipt of an annual
payment of 1.40 USD per acre of land, to be shared amongst family, acknowledged
the validity of the lease agreement between the local authorities and the
corporation.
In return the “landowner” agreed not to interfere with
the company’s rights under the lease and they acknowledge the company’s rights
to use their plot of land. The signing by the “landowner” on behalf of his
family consolidates the free, prior and informed consent process, according to
the corporation. The lease gives the corporation exclusive possession over villages,
rivers, forests etc. that forms a part of the leased land.
If any conflicts arise on the lease they shall be
resolved by arbitration in London, hence not by the national judicial system of
Sierra Leone. Knowing the costs involved in arbitration, the chances that any
local authorities, would contest any clause in the lease by arbitration in
London, are extremely slim. If, however, the parties resort to arbitration, the
right to appeal is waived by the lease agreement.
Keeping the above in mind, the process establishing
the above lease and “acknowledgement agreement” has beencarried out in
accordance with established principles by the United Nations on business and
human rights and IFC standards. A large number of information sessions were
held with the inhabitants of the land and the corporation. Several evaluations
and assessments were made by the corporation. The corporation feels proud to
inform that now, contrary to before, the land owners have a paper showing their
registered plot of land. Note however the land owners are not the “owners” they
are just called “owners”.
It must be stressed that the majority of the
inhabitants in the staked out area have very low, if any education, and often
they have not travelled further than to the district town Makeni. The majority
of the people in the area live beneath the poverty line. This means that they
barely have food for the day. When signing, or putting their thumbprint on the
acknowledgement agreement, they could not grasp the large scale implications. The
agreement was already established by their own local authorities. They received
less than two dollars a year per acre for land they had farmed and resided on
for generations.To them, giving up access to their cassava plantations and the
use of a plot of land in exchange for the promises of a large scale investment
most likely came with the idea of progress towards a better life. In their
world, when the notion of jobs, roads, income, food, education and health
arise, it is not difficult to sign such a document. However, they also knew
that they did not have a choice, on their behalf, the local authorities had
already leased the land and, as noted in the lease agreement ”used their best
endeavors to ensure that the lease would be signed” and that the corporation be
ensured to ”peacefully and quietly” enjoy the land without any interruption.
It is argued that benefits will come with the
investment, but despite these, what the land lease agreement between the
Government of Sierra Leone and Addax really implies is that 14 000 people no
longer have rights to use the land, freely access areas to hunt and in some
cases access clean water. They do however have access to rice. The corporation
has established rice plantations. There are growing concerns by local NGOs that
rice does not sufficiently ensure the nutrition needs of the inhabitants.
Hesitation to sign the acknowledgement agreement might
have arisen if the inhabitants of the land had equal access to information and
knowledge as the corporation and the Sierra Leonean Government. But for a
person living far away from international business know-how it is virtually
impossible to strategically understand the financial and long term implications
of the agreement.
Perhaps they would have thought twice, questioned or
demanded conditions had they had equal access to information. This is where the
Government of Sierra Leone should have stepped in, to ensure that the human
rights of the inhabitants of the land were protected. But the Government did not. The Government was the party that
signed the lease agreement. The basic livelihood of 14 000 citizens was with
a signature replaced with uncertain futures, as temporary laborers, at the
whims of a large-scale investor with limited socio-economic concerns for the
population. Surprisingly those working for the company and investors, such as
the Swedish Government appear to have a very hard time understanding why the
inhabitants now complain about the establishment of the corporation.
Without doubt the people did not have access to
information about the overall consequences of the agreement. They did not know
the implications of the clauses stipulating that Addax Bioenergy do not need
pay corporation tax until 2022 and is exempted from paying duty on a number of
goods and the overall implication of this on Sierra Leone. What if they knew
that international firms shift profits to lower tax jurisdictions cost Africa
$38bn (£25bn) a year? According to the Africa progress report 2013, by the Africa
Progress Panel chaired by Kofi Annan, Africa lose through such tax loopholes,
twice as much as the total gains from all donor funds. Perhaps there would have
been hesitation in signing? Had it been that Sierra Leone was a country where abuse
of power was not common, had Sierra Leone not been governed by a system of
complex local and central power structures, in which high levels of corruption
exist, had they known that research indicates that prospects of a better life
increase only for those already having a good life when these kind of
investments are made, perhaps they would not have signed any agreement.
Perhaps the inhabitants would have questioned the
consequences for their country, for themselves and for the coming two
generations. Perhaps they would have demanded that any conflicts between Addax
and the Government of the lease agreement be settled in a local court where
they could access justice, instead of in a court of arbitration in London. What
will happen when the illusions of newfound prosperity fades and the 14 000
people start requesting for the indications of a better life they had when they
signed the agreement?
Anger against corrupt local leaders was part of
fuelling the conflict in Sierra Leone. Thus, feelings like those existing
before the war may again arise. Increased malnutrition, lack of water and food
may create cleavages between local communities and ethnic groups. Signs of
anger and protests against the corporation have already occurred. People are
starting to question the agreements they signed. . The corporation, the
investors, the Sierra Leone government are justifying the situation by
referring to compliance with international principles established for human
rights and business. Addax Bioenergy followed many existing principles of
corporate social responsibility. However, fairness and equality in access to
knowledge and information did not exist. If the Government of Sierra
Leone does not represent the people then investing countries like Sweden must
step in and take responsibility. It is not justifiable to
support investments in a country when accountability systems are not in place,
corruption is known to be rampant and human rights violations are not tackled
by the state.
The Africa Progress report 2013 released 10 May,
indicates that the establishment of corporations may improve the overall
financial situation of a country, but not the situation of the poor; instead
they rather tend to increase the gap between poor and rich.
According to the United Nations Special Rapporteur on
the right to food, countries with weak land governance increases the risk of
large-scale land deals turning in to actual “land grabs” where free, prior and
informed consent of affected communities is not sought and human rights
violations often occur.
Evidence shows that few jobs are created by
biofuel-related investments relative to other sectors and where small-scale
farming is replaced by large-scale and heavily-mechanized monocultures. Many of
the former land users’ end up jobless and landless according to the Special
Rapporteur.
The case of Sierra Leone, supported by the Swedish
Government’s aid scheme and implemented by Addax bioenergy is justified by
compliance with the processes stipulated in the principles for business and
human rights.. What is not noted by the Swedish Government, the Government of
Sierra Leone and Addax is that compliance with international standards for
businesses and enterprises, does not exclude responsibility for human rights. States
must comply with legally binding human rights law. There should be a scrutiny
of the ways corporations and donor countries use the principles of human
rights. States with natural resources must be held accountable for allowing
investments, prone to result in human rights abuses, establish when legal
conditions and accountability mechanisms does not exist. Corporations and
donors must take moral and ethical responsibility. Responsibility cannot be
avoided by hiding behind processes established in principles of business and
human rights.
Tilde Berggren is a human rights lawyer having worked
the past eight years with policy development at the United Nations headquarters
in New York, including with the High Commissioner for Human Rights and the
Special Advisor on Gender Issues, with human rights monitoring and reporting in
the UN Mission in Sierra Leone and with Civil Rights Defenders in Kosovo and
Macedonia.
According to a number of local and international NGO’s, journalists and researchers monitoring the situation on the ground, the large scale investment in Sierra Leone between Addax Onyx Group (AOG) and Swedfund, as well as a range of additional investors, is causing concern. The main concern is that the investment is contributing to poverty, decreased access to basic rights and may increase instability and anger amongst the local population. Swedfund is consistently dismissing the concerns, arguing that the monitoring of the situation is not sufficient and not carried out in detail, hence not trustworthy and does not illustrate the overall situation. Swedfund on their side emphasize that the project is in its start-up phase and therefore it is therefore too early to measure impact. However, those monitoring the situation are many and conclusions based on their monitoring are coherent and consistent and can therefore not be dismissed.
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