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Forum global sur la sécurité alimentaire et la nutrition • Forum FSN

Re: The Future UNIDROIT-FAO-IFAD Legal Guide on Agricultural Land Investment Contracts (ALIC)

Yixin Xu
Yixin XuSouthwest University of Political Science and LawChina

The ALIC zero draft has mentioned many times that environmental issues are one of the important components of the bargain.[1] The draft provides four pathways to ensure positive environmental results, whereas some of them are slightly hidden in the texts. After explaining that there are national and international laws on relevant environmental issues, the draft mainly addresses these issues by suggesting a feasibility study for the investors to be aware of the environmental risks and environmental impact assessments (EIA) as required by the law.[2] The draft also suggests that ‘in response to these potential impacts, investors ought to prepare management programs that create operational procedures, practices, plans, and legal agreements ... These ought to include environmental and social action plans with measurable targets as well as for monitoring and review as well as for stakeholder...’[3] Lastly, the investor may be obliged to pay compensation for the misuse of the land as discussed in Chapter 5.[4]

 

These pathways are thoroughly listed in the text, whereas the draft should also make it more evident in the table of contents and make it more visible with subtitles. Then it would be easier for practitioners to locate where to look when the non-performance, transfer, and dispute are about environmental issues in Chapters 4, 5, and 6.

 

Also, it is doubtful whether international and national legal systems can provide a credible EIA to mitigate environmental risks, hence they may not be able to provide ‘assurances that environmental standards will be maintained’.[5] The EIA is sometimes not binding under international law. For instance, in the case of CDM agriculture activities, whether to conduct an EIA is subject to the decision of the designated national authority, and relevant international agencies do not conduct a substantial review.[6] The national/local authorities may have deficient standards or lack of the institutional and financial capacity to hold a credible EIA.[7]

 

It is a smart idea to ask investors to make environmental plans to prevent future risks. It has happened in international cases, that a project was terminated because the NGOs discovered significant adverse environmental impacts during the implementation. In the case concerning Gabcίkbvo-Nagymaros project, the International Court of Justice (ICJ) ruled the Hungarian government to continue the project, and both parties should apply newly developed norms of environmental law.[8] However, would the private investors be willing to bear such a responsibility (as suggested below, state maybe investors as well. But the discussion here focuses on the private investors)? For those who invest in sustainable agricultural production, are they institutionally and financially capacity to design and implement a mechanism that even international and national authorities could hardly achieve, and then what kind of mechanism it would be? If it is possible, the revision of the draft would be very beneficial for the investors to give more details on the design of such a mechanism (combining operational procedures, practices, plans, legal agreements, and action plans) to mitigate environmental risks.

 

[1] E.g. ALIC Zero Draft, UNIDROIT/FAO/IFAD (2019), p. 17, 23

[2] Ibid., p. 24

[3] Ibid., p. 47

[4] Ibid., p. 116

[5] Ibid., p. 24

[6] Para. 132, Annex 1, Clean Development Mechanism Validation and Verification Manual, CDM EB 55 Report, p. 26.

[7] Ibid., p. 112; L. Schneider, Is the CDM Fulfilling its Environmental and Sustainable Development Objectives? An Evaluation of the CDM and Options for Improvement. Öko-Institut for Applied Ecology, 2007 (248), p. 1685.

[8] ICJ, Summaries of Judgments and Orders, Case Concerning Gabcίkbvo-Nagymaros Project (Hungary/Silovakia), Judgment of 25 September 1997.