2. Necessity of responsible land-related agricultural
investment (RLAI) activities
Situation of RLAI of agricultural enterprises in
Vietnam
Situation of RLAI of tea enterprises
Code of conduct of RLAI for tea sector in Vietnam
Contents
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4. 1 Responsible land-related agricultural investment
Necessity of RLAI activities
The World Bank forecasts that
the global population will
increase by 2 billion by 2050
Rapid development of the
industrialization and
urbanization process
Pressure on ensuring food
security
Consumer tastes and
concerns change, towards
green, clean, certified,
traceable products
Reducing the land area of
production, land becomes
scarce and high value
Climate change
is increasing
โข Many investment activities are not compliant with international standards and do not benefit the
landowners.
โข Some investors are irresponsible and exploit vulnerable farmers, especially in countries with weak
land management systems.
โข Land grab increases (since 2009)
โข Negative impacts on economic, social and environmental areas
6. 2
Situation of RLAI in Vietnam (1)
The government has made efforts to develop
more preferential policies to attract investment to
agriculture (notably the policy of accelerating land
accumulation).
However, there are many shortcomings in the
policy framework for development and sustainable
land use as well as the protection of smallholder
farmerโs land use rights
โข Some investors consider agribusiness as area of โpolicy profiteerโ (e.g. land grabbing,
tax exemption, subsidies, etc.)
โข Some enterprises do business due to relationships, occupying land with inadequate
compensation mechanism, causing disputes..
โข Some investment projects have benefited beyond their investment in technology,
management and financeโฆ. and farmers are excluded in sharing benefits
โข Many enterprises exploit, use and manage land in order to maximize immediate
economic benefits without taking measures to protect soil and environment.
Some concerns arise about land-related investments:
8. 2016:
โข Acreage: 134.000 ha
โข Number of enterprises and processors: 500
โข Production: 240,000 tons of dried tea per year,
ranked 7th in the world
โข Export: 130.9 thousand tons, ranking 5th in the
world
โข Create jobs for over 500,000 farmers
Red river
delta
4%
Northern
Midlands
and
Mountains
72%
North
Central and
Central
Coastโฆ
Highlands
17%
Area of Tea
Overview of the tea industry
Source :GSO, MARD, VITAS
Lam ฤang
21.900 ha
Ha Giang
20.600 ha
Yen Bai
11.500 ha
Thai Nguyen
20.800 ha
Tuyen Quang
8.500 ha
Phu Thแป
16.300 ha
Area of Tea
(thousand
ha)
3 Responsible land-related investment of tea enterprises
9. Forms Inclusive
economic
effectiveness
Ensuring
social/cultural
values
Ensuring land tenure
of farmers
Ability of replication
Enterprises land is allocated
by the State and then, lease
to farmers (annual contract)
High Average Average Low (Limited state owner
land fund)
Enterprises sign contract and
include landowners in value
chain
High High High High (however, high cost to
link with many small HHs and
risk of contract break)
Enterprises have land lease
directly from households
High High High Average (cost to make
contracts with many small
HHs, short duration)
Enterprises have land lease
with households through local
government
High Low (easy to be
abused, difficult to
create social
consensus)
Average Low (Lack of clear law and
procedures)
Enterprises have agricultural
land use right transfer by
households
Average (lack of of
LUR market and
unclear valuation
process)
Low (famers may
loose land/forest for
traditional activities)
Low Low (lack of LUR market and
safety-net for farmers to
transfer LUR)
Enterprises use agricultural
land of households as their
contribution in business
Average (lack of
fair benefit sharing
mechanism)
Average Low Average (lack of legal
framework)
3
Forms of large scale land-based agricultural
investment by land accumulation and concentration
10. Limitations of RLAI of tea enterprises
3 Responsible land-related investment of tea enterprises
โข Area of cultivated land is fragmented -> Difficult to manage land use and the
application of sustainable producing process.
โข Large tea output but lack of companyโs brand, and mainly export to
low/average value markets -> lack of motivation for enterprises to apply
international certification.
โข Awareness of farmers is still limited, and some farmers do not follow the
technical process on pesticide use and land protection.
โข Regarding to contract farming, some farmers has broken the contract and
just focused on benefits in short term.
โข Lack of participation of local governments in land/benefit dispute resolution
12. 4 Tea RLAI COC
Basic criteria that help tea enterprises
conduct investment activities in responsible
manner in economic-social-environmental
aspects.
Create a framework of monitoring and
evaluation on RLAI of local government and
authorized agencies.
To ensure sustainable
development of tea
enterprises
To protect benefits of
vulnerable groups
To promote responsibility
of enterprises in land-
related investments
Specific objectiveOverall objective
Instrument to support enterprise to comply
better with legal systems; use and manage
land more effectively as well as business
activities towards sustainable development
and strengthening competitive advantage of
enterprises.
PRINCIPLE OF APLICATION:
Voluntary, do not replace laws. Tea RLAI COC should be applied under legal systems of Vietnam
Enterprises will ensure that stakeholders in land-related investment (farmers, partners, local
governments) acknowledge their commitments on the Tea RLAI COC and willing to deal with raising
issues during the implementation.
13. Project activities implemented
Feb-
Apr
2017
โข Review
โข Develop draft RLAI principles
May
2017
โข RLAI consultation meeting with MARD, MONRE, VCCI, VITAS, NGOs, Enterprises
(55% women partcipants)
June
2017
โข Principles of RLAI for enterprises in agriculture sector in Vietnam had been acknowledged
by the VCCIโs representative
July
2017
โข Screening and select Tea as pilot sector to develop RLAI COC
โข Drafting RLAI COC for tea sector
Aug-
Oct
2017
โข Survey 6 companies in 3 provinces to consult the draft RLAI COC
โข International conference of International Tea Association: introduce and consultation
โข Finalize the RLAI COC for tea
Oct-
Dec
2017
โข Develop a guideline of RLAI Code of Conduct for tea, printed and disseminated to tea
enterprises via network of VCCI and VITAS
โข Disseminate and capacity building for researchers, enterprises, local authorities
โข Media activities
14. 4 Tea RLAI COC
The tea RLAI COC is based on the legal framework of international
conventions and standards, in accordance with Vietnamโs tea sector:
1. The framework of principles for responsible land-related
investment in agriculture in Vietnam (RLAI), Agroinfo (2017)
2. UTZ Tea Module, UTZ (2015)
3. Sustainable Agriculture Standard, SAN (2010)
4. Unilever Sustainable Agriculture Code, Unilever (2010)
5. Trust Tea Code, Tea Board India (2010)
6. Ethical Tea Partnership Standard, ETP (2016)
7. SAFA guidelines, FAO (2013)
How the COC developed?
15. TEA
RLAI
COC
Structure of principles
Ensuring
inclusive
economic
development
based on
benefit sharing
(10 principles)
Respect land
tenure of
related parties
(6 principles)
Respect social
โcultural
aspects and
traditional
knowledge (3
principles)
4 Tea RLAI COC
Sustainable
cultivation
process and
environmental
protection (8
principles)
16. Tea enterprises
๏ถ Get support from authorities/communities in land โ related
investment
๏ถ Build brand, create price advantage, enhance competitive position
๏ถ Participate in program on CSR
๏ถ Expand markets and production scale
๏ถ Have more conditions to improve workersโ living standard
Farmer
๏ถ Ensure their tenure and benefits of land
๏ถ Ensure labourโs health
๏ถ Raise income and sustainable livelihood
๏ถ Have chances to become partners of enterprises in tea production
Authorities
๏ถ Monitor and evaluate investment activities of enterprises based on
the COC
๏ถ Increase social capital for public constructions and activities
๏ถ Decrease land conflicts btw enterprises and farmers
๏ถ Protect cultivated land and environment for sustainable
development
Benefits
of
the COC
Customer
๏ถ Use certificated and qualitied products
4 Tea RLAI COC
17. Sustain and develop the project results
โข Develop a strategic plan to encourage the adoption of the Tea RLAI
CoC by the stakeholders in the Tea Industry (include of incentive
mechanism, monitoring and evaluation system)
โข Explore options for application/roll-out of the CoC to other
agricultural commodities (export-oriented, enterprises lead the value
chain, land intensive, smallholder farmers/ethnic/women involved)