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Biovale biodiesel business as an agent of social inclusion

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  • 1. BIOVALE PROJECT: A BIODIESEL BUSINESSAS AN AGENT OF SOCIAL INCLUSION IN BRAZIL www.biovale.teiaslive.net biovaleenergia@gmail.com
  • 2. goals To set up a pool of highly professional entities toorganize the bio-diesel production chain based on Jatrophacurcas feedstock, elaborating turn-key projects from soil tooil. promoting sustained development and povertyalleviation, creating opportunities and a new model forthe intensive and extensive use of the energy biomasspotential of Brazil. Main focus: most vulnerable region of Brazil: Semi-arid,particularly, Jequitinhonha and Mucuri Valleys, in theStaste of Minas Gerais.Final target: to set up socially responsible and state-of-art biodieselindustries in one of the most vulnerable regions in Brazil.
  • 3. vision“Take joint actions and improve efforts to work together atall levels to improve access to reliable and affordable energyservices for sustainable development sufficient to facilitatethe achievement of the MDGs, including the Goal of halvingthe proportion of people in poverty by 2015, and as a meansto generate other important services that mitigate poverty,bearing in mind thataccess to energy facilitates the eradication of poverty” ( Summit on Sustainable Development in the Johannesburg Plan of Implementation ) “ We folks have to get out of the dry hinterland! But one only gets out of the dry hinterland is taking it over from inside...” (Guimarães Rosa)
  • 4. empowering the poor groupsIf the conditions could be created for these smallproducers to become more effective in production andtrade, poor groups could contribute significantly toachieving a higher and more sustainable pace ofdevelopment, promoting not only economic growth butsocial cohesion.But such conditions will not come about easily or quickly.The legacy of history and the long marginalization of poorgroups in terms of the distribution of land and otherassets, in terms of institutions and of centuries ofinequity in access to education, nutrition and health,create too great an obstacle.These obstacles must be addressed and overcome if thechallenging targets on poverty reduction are to beachieved. Acting directly on poverty means addressingtheir constraints.
  • 5. empowering the poor groupsSustained growth can be achieved only by creating conditions in whichpoor groups can increase their productivity and output. Empowering these poor groups is not a diversion from promotinggrowth. On the contrary, it is an effective, and perhaps the only, wayof achieving sustainable growth.But empowerment will serve little purpose if the material means forincreasing production and incomes are not available to the poor.Enhancing their skills and building the human capital of the poor willhave a major impact on both their economic productivity and theirhuman dignity.By improving the productivity and sustainable management of landand water, technological advances offer the potential to address manyof the obstacles that the lack of assets imposes on the poor.Access to extension services, market and technology must be relevantto the conditions of the poor and they must have access to it.
  • 6. Corporate social responsibilityThe Sell Side of important financial markets is recognizing themateriality of corporate social responsibility.Social and environmental issues can materially affect stock prices,particularly over the long-term and sometimes even in the short-term.“Business is part of society, not outside it. When we talk aboutcorporate social responsibility, we don’t see it as somethingbusiness does to society, but as something fundamental toeverything we do…not just philanthropy or community investment,but the impact of our operations and products as well as theinteraction we have with the societies we serve. CSR is not a softissue or a nice to do activity on the fringe of business. It is centralto doing business. It is challenging to manage and it is a hardedged business issue.” (expressed by the giant Unilever at theLondon business School) We encourage organizations and investors to scrutinize our project/corporation as an attractive option to their socially responsible investments.
  • 7. our challange In modern economies, large scale poverty imposes an enormous economic loss, wasting the talents and energies of hundreds of millions of people , diverted from socially productive activities that could create wealth for society to the struggle for mere survival.The partnershipsshould be at theglobal level, at thecountry level withnationalstakeholders andexternal partnersacting together,the private sectorand civil-society But the fundamental partnership, andinstitutions ultimately the only one that counts, is with thecollaborating tocreate conditions poor themselves. They have the talents, thethat emancipate skills and the knowledge of their ownpoor groups. environment.
  • 8. Biofuels: A New Future for Rural CommunitiesOne of the main benefits of biofuels is their potential to increasefarm incomes and strengthen rural economies. The World Bankreports that biofuel industries require about 100 times more workersper unit of energy produced than the fossil fuel industry.In 2004, the Brazilian sugarcane sector was responsible for 1 millionjobs (direct)/4 million (indirect) corresponding to the production of350 million tonnes of cane (UNICA, 2003 and Goldemberg, 2003).The dispersed nature of agriculture makes it unlikely that biofuelproduction will become as centralized as the oil industry.In the focused region of the project (Jequitinhonha & Mucuri Valleys)the access to modern forms of energy is limited or absent. Anorchastrated pool of competences involved in the biodieselproduction chain can help provide income and clean, accessibleenergy that is vital for rural development and poverty alleviation.
  • 9. energy & prosperityMost poor households in developingcountries lack access to modernfuels. They instead rely on traditionalbiomass fuels like cropwaste,dung, and wood to meet theirbasic energy needs.When used with inefficient devices theselow-quality fuels often result in harmfulhealth and environmental impacts.The order of fuels on the energy laddercorresponds to their efficiency and‘cleanliness’ at end use. Climbing the energy ladder towards moreAlthough modern fuels tend to be more modern fuels, therefore, is a challengecostly, they do provide people with far most poor people in developing countriesgreater opportunities for income must face in order to improve theirgeneration. overall standard of living. Source: REN 21/2006
  • 10. energy link to overall human developmentThere is an empiricalbasis to the relationshipbetween access tomodern energy andhuman development.Energy is strongly linkedto human development.No country in moderntimes has substantiallyreduced poverty withouta massive increase in itsuse of energy and/or ashift to efficient energysources. Source: REN 21/2006
  • 11. Our local partnersThe poor have to be recognized as individuals with rights and as potentialagents of change who can themselves play an increasing role.In determining social and economic outcomes poor groups should not beseen merely as a burden on society. Rather, the poor, especially women, arehard working and often effective microentrepreneurs. Our local partners And environment
  • 12. Development modelThe development model is based on the workingrelationship among the various stakeholdersinvolved in the productive chain with clearattributions in all levels: local community, localtechnical NGO, enterprising development agency ,servicing companies, Government agents and acorporation.Each entity has its respective and important rolesthat complement, harmonize and support oneanother leading to the ultimate success andsustainability of the project. “The private sector can play an important role towards furthering development, for development cannot occur without conditions that are amenable to the conduct of business.” (United Nations)
  • 13. General intervention strategies Competitiveness and productivity:MARKET SIGHT adoption of compatible mechanisms InclusionSOCIAL SIGHT Participation Equity Regional clusters formation GEO SIGHT Adequate logistics Attractiveness to private sectorBUSINESS SIGHT Favorable climate Compatible working tools
  • 14. Development model: local NGOLocal NGO´s will support following types of interventions:establishing effective monitoring and evaluation systems, workingclosely with cooperating institutions to improve impact assessmentand supervision, and strengthening partnerships with a range ofdifferent players.promoting a global policy environment that increases market accessfor the rural poor.directly responsibility to the community - directly involved in theenergy crop cultivation and oil extraction than the developmentagency, assessing the communities’ organizational capacity and theirpotential to complete and manage an energy project. providing technical, organizational advice, support and training tothe community
  • 15. Development model: Foreign Development AgencyDirect main responsibilities of the development agency :To provide seed money and matching grants that can initiateand support the efforts of the NGO to raise the money neededfor a project and/or provide capacity grants which help tobuild their organizational capacity.To popularize the NGO achievements in developing sustainableenergy systems and related environmental protection plansthrough the media, internet, and other written and visualsources (SLUIJS & BODE, 2001).To facilitate trainings for NGOs such as; community surveys ofpower demand and potential usage, site selection, the budgetprocess, choice of appropriate technology, environmentalassessments, feasibility studies, civil design, operational &fiscal management, micro-enterprise development, long termplanning, and grant writing (SLUIJS & BODE, 2001).
  • 16. Development model: Investment agencyMINASINVEST, a not-for profit investment agency, will be primarily incharge of the social-economic factors coordinating the efforts amongthe various stakeholders, which includes:Building market information systems.Identifying and coordinating the best partners;Developing policies and strategies to improve competitiveness;Strengthening the producers´ negotiating position ;Providing well-researched analyses;Government and institutional relationships involved in the project.
  • 17. Development model:The CommunityThe local community possesses direct responsibility towards the day-today running of the biofuel project . Particular emphasis is given onthe socio-economic empowerment of women, thus women groups willbe specially utilized to manage the project.The role of the community should therefore be:● Provision of land for Jatropha plantation and site for theestablishment of the oil extraction unit.● Responsibility for the day-to-day management of plantation,including: cultivation and harvesting.● Commitment of human resources for project development such asunskilled labor (to handle farmlands), access to skilled labor.In order to help the community in their quest towards sustainabledevelopment, it is very important that they should be the mainrecipient of all benefits accrued from the project.
  • 18. End goal & managementThe BIO-VALE project can bring about major economicempowerment by providing income and employmentopportunities to both the rural communities and entreupreneus.The project can be utilized to stimulate a circular systemcombining ecologic, economic, and income-generating effects(HEN. 1994), particularly to the drought prone ruralcommunities of the Brazilian semi-arid regions.The project promotes the main aspects of development, whichcombine to help achieve a sustainable way of life for villagefarmers in terms of provision of renewable energy, erosioncontrol, economic empowerment through job creation andpoverty reduction and economic development.The favorable context in Brazil, the onset of widespreaddistribution, the differential tax regime recognizing theimportance of oilseed production by family agriculture units– andthe introduction of the “Social Fuel” label are regulatoryinstruments designed to promote social inclusion throughout thenew fuel’s production and value chain.