Nestle's Creating Shared Value prize awarded to Cambodian rural development organization

Saturday, May 29, 2010
The China Post news staff

TAIPEI -- Nestle's Creating Shared Value Advisory Board has awarded the first Nestle Prize in Creating Shared Value to the Cambodian branch of International Development Enterprises (IDE), an international not-for-profit organization, which uses market-based approaches to increase the income of the rural poor by improving market access, boosting agricultural production, and creating sustainable local businesses.

Starting in 2005, IDE (www.ideorg.org) Cambodia developed a network of 60 independent small entrepreneurs in rural regions of Cambodia called Farm Business Advisors.

These advisors give technical advice to more than 4,500 small-scale farmers to help them expand their productivity, while selling them products such as high-quality seeds, fertilizer, plastic fencing and irrigation equipment and services.

On average, farmers assisted by these advisors increase their net income by 27 percent US$382 to US$480 per year. At the same time, the advisors earn an income from selling their products and services.

IDE Cambodia will use the prize's 500,000 Swiss francs to recruit and train an additional 36 advisors with aim to generate approximately US$1.9 million in new income and benefit around 20,000 people in more than 4,000 rural households across Cambodia.

"It is an honor to receive this recognition from Nestle. The prize will help us further IDE's mission to create income opportunities for poor rural households. We hope to leverage the prize money to reach more than 75,000 rural Cambodian households in the next few years. On a global scale, this is still very small but we think there are big implications in what we are learning," said IDE Cambodia Country Director Michael Roberts.

Nestle Chairman Peter Brabeck-Letmathe said, "We congratulate IDE Cambodia on being the first to be awarded the prize. The work they do is truly inspirational. IDE continue to grow their network of Farm Business Advisors in Cambodia while at the same time creating value for rural communities there. This is exactly what we mean by Creating Shared Value."

Nestle CEO Paul Bulcke added, "We had a vast range of inspirational entries from across the globe. IDE Cambodia is a leading project and the Nestle prize money will help them to ensure that this project continues to thrive and expand."

The Prize in Creating Shared Value Prize was created by Nestle in 2009 to provide financial support of up to 500,000 Swiss francs to individuals, non-governmental organizations (NGOs), or small enterprises offering innovative solutions to improve access to, and management of, water, improve the lives of farmers and rural communities, or provide better nutrition to communities suffering from nutritional deficiencies.

The first edition, which received more than 500 applications from 79 countries, was awarded during Nestle's second Creating Shared Value Forum, a gathering of leading international experts in water, nutrition, rural development and the role of business in society, which took place in London on May 27.

The winner was selected by the Nestle Creating Shared Value Advisory Board, an independent panel of internationally recognized experts in corporate strategy, nutrition, water and rural development.

Members on the panel include John Elkington, co-founder of SustainAbility; Michael E. Porter, Bishop William Lawrence University Professor at the Harvard Business School; Jeffrey Sachs, director of The Earth Institute at Columbia University; and Nancy Birdsall, founding president of the Center for Global Development.

Creating Shared Value is a fundamental part of the way Nestle does business. In order to create long-term value for shareholders, the multinational conglomerates aims at the same time to create value for society at large.

Nestle committed an investment of 500,000 Swiss francs to IDE Cambodia. The money will be disbursed over a three-year period and will assist in the scaling-up of the project. The fund will be used by IDE Cambodia to mainly recruit and train a further 36 Farm Business Advisors, provide them with access to agricultural inputs, market information and microfinance, as well as the development and strengthening of the franchise system.

Details about the award as well as testimonials of farmers and Farm Business Advisors benefiting from the IDE project are available on Web site www.nestle.com.

Australian agro-deal in Cambodia carries risks, rewards

Mon, 01 Feb 2010
DPA

Phnom Penh - As a former finance minister of Australia, Peter Costello is comfortable with large numbers. The latest is his proposal on behalf of an Australian fund to invest 600 million US dollars into at least 100,000 hectares of land concessions in Cambodia. The concessions would see private equity investors pumping money into plantations of teak, palm oil, sugar, rice and bananas. In return, Cambodia would get 150,000 jobs, the government said after Costello met with Deputy Prime Minister Sok An.

Significant investment, plenty of jobs plus the promise of improved agricultural methods? Such a deal should be good for Cambodia on all three counts.

But human rights workers said they worry the country's ongoing problems with corruption and poor governance combined with often-violent land evictions mean it is less certain that ordinary people would benefit.

And as veteran opposition legislator Son Chhay made clear, transparency in investment deals is hardly the order of the day.

Son Chhay has plenty of experience in how the ruling Cambodian People's Party (CPP) operates when it comes to investments. He headed parliament's foreign affairs committee until 2008 but said his deputy, a member of the CPP, regularly prevented him from getting information on deals.

"It's still the case that we are not able to get our hands [on investment documents], and that's a cause for great concern," he said.

In the past two decades, much of rural Cambodia has been carved up into economic land concessions (ELCs). The UN's human rights office released a report three years ago that said 59 large concessions totalling almost 950,000 hectares had been granted to private companies to develop agricultural-industrial plantations.

The report made it clear that the true figure was certainly higher because data on smaller ELCs were not available. What was clear, it concluded, was that the concessions had "adversely affected the human rights and livelihoods of Cambodia's rural communities."

In the intervening three years, government figures showed it has approved 33 more agricultural-industrial projects worth 837 million dollars although they did not indicate how much land is involved. State-to-state deals, however, are not on that list, and Qatar, Kuwait and South Korea have so far expressed interest in, or signed deals for, ELCs.

Human rights workers said risks to the rural poor over such deals are significant because they are regularly evicted to make way for foreign investors. The government's often-brutal approach to evictions and its disregard for its own laws in doing so have raised concerns abroad.

Such government behaviour was one of the items discussed by the UN's special rapporteur on human rights during a recent two-week visit. Surya Subedi asked the government to suspend all land evictions until proper legal safeguards are in place.

The government denied the request, citing the need to develop the country. It told Subedi that national guidelines on evictions were being drafted but did not say when they would appear.

The UN envoy expressed cautious optimism in telling reporters that the UN Human Rights Council has adopted a resolution that requires guidelines be put in place to protect the vulnerable.

"So it is now becoming an international requirement," Subedi said.

One relevant regulation recently approved by Cambodia's parliament was a much-criticized expropriation law. Subedi criticized parts of the law for being far too vague.

"For example, what do we mean by public interest?" he asked. "If land can be acquired in the public interest, how do you define it? Who defines it?"

Acceptable compensation measures for those affected were absent, too, he said.

Those concerns are shared by many in Cambodia, including Son Chhay although he did welcome one of the benefits touted by Costello: new ways of farming to boost production.

The opposition lawmaker said new methods could help 80 per cent of the 14 million people who rely on outdated farming techniques. The country's rice yield of around 3 tons per hectare, for example, is far below that of some of its neighbours.

But the primary motive for Costello's investors is financial. Investors want a return on their money, and the food crisis of 2008 when prices rocketed showed that food can be profitable.

"I think agriculture is going to come back into its own as an investment in the decades that lie ahead, and of course, that's a great opportunity for Cambodia," Costello told the Phnom Penh Post.

For his part, Son Chhay would prefer investment from countries like Australia rather than from Cambodia's more traditional investors, such as China and Vietnam, whose companies, he said, are uninterested in improving local skills.

Yet he insisted that a transparent, corruption-free approach is vital to ensure the Cambodian people benefit from the deal.

"A lot of concessions have caused problems to our farmers and indigenous people who have no knowledge of what is in the contracts," he said.

But he called on Costello to make public the full details of any contract with the government.

"He should act upon his word [to do so]," Son Chhay said. "We would hope that this kind of investment from a society like Australia would be done in a proper manner."

Thailand exempts agro-industry duties from neighbours [- A boon for Thai rice importer from Cambodia?]

BANGKOK, June 20 (TNA) – The cabinet has approved a proposed exemption of import tariffs for certain categories of farm produce from neighbouring countries as part of the economic cooperation projects under Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) between Thailand and its neighbouring states.

Government spokesman Yongyuth Mayalarp said the lifting of the import tariffs was intended for agricultural goods produced on a contract farming basis in Cambodia, Laos, Myanmar and Vietnam and which are to be imported to Thailand.

The Ayeyawady-Chao Phraya-Mekong economic cooperation scheme was scheduled to be implemented from 2006 until 2008.

The tariff-free farm goods include maize, soybeans, eucalyptus and oil palm, which may be used as an alternative energy source in this country. A total of 108,000 tonnes of these categories of farm produce was projected for import throughout this year, followed by 428,000 tonnes in 2008.

Thailand's Agriculture and Agricultural Cooperatives Ministry and the Energy Ministry have been assigned to conduct feasibility studies for launching investment projects connected with the contract farming of such energy-alternative products in Thailand's neighbouring countries.