Agriculture, Forestry and Fisheries

FIs should develop specific policies and procedures to address the most salient human rights risks in relation to Agriculture, forestry and fisheries (AFF). AFF policies and procedures should include a recognition of the corporate responsibility to respect human rights as set out in the UNGPs, including implementing human rights due diligence which reflects sector-specific risks. It should also include a commitment to human rights standards based on the International Bill of Human Rights and the ILO Fundamental Conventions. Policies and procedures can also include a commitment to key sector-specific standards, such as sector-relevant ILO Conventions (including C184 on Safety and Health in Agriculture, C188 on Work in Fishing, and the Maritime Labour Convention, as well as ILO Sectoral Codes of Practice and Guidelines), as well as to standards which address the most salient human rights issues in the sector. For the Agriculture, forestry and fisheries sector, this will include ILO Convention 169 on Indigenous and Tribal Peoples, the UN Resolution on the right to a clean, healthy, and sustainable environment, the Paris Agreement, the Convention on Biological Diversity, Aarhus Convention, Escazú Treaty and the UN Declaration on the Rights of Indigenous Peoples (UNDRIP). Any commitments by FIs to these standards, or any concrete expectations for clients/investee based on these standards, should be accompanied by an explanation of how the human rights-related expectations embedded in these standards will be implemented by clients/investees and throughout the AFF value chain. This can include minimum human rights criteria for the provision of financial services, such as:

• Integration of human rights considerations into all relevant environmental and social documents, including the Environmental Impact Assessment (EIA), Resettlement Action Plan (RAP) or equivalent.
• Requesting specific documents to address specific human rights risks on issues such as: conservation and sustainable use of resources such as water, flora and fauna, energy, or land, which take into account the needs of local community for these resources now and in the future.
• Ensuring free, prior and informed consultation and consent of Indigenous People (where applicable).
• Ensuring that vulnerable groups are part of the consultation process, including the establishment of a complaints mechanism for local communities and other relevant stakeholders.

For further information, see ‘‘Taking Action – Strengthen human rights in FI policies.’ See also ‘Policy commitments and human rights’ for practical guidance on how to develop policy commitments which are consistent with the UNGPs, and how to integrate relevant human rights commitments in other policies and procedures.

Human rights screening and risk assessment should include key entities in the value chain, for example clients’ contractors and sub-contractors, suppliers and sub-suppliers. FIs should screen their agriculture, forestry and fisheries (AFF) portfolio to map and identity salient human rights risks, whether their clients’ activities in the AFF sector are likely to impact on vulnerable groups (workers and communities), and to evaluate the systems that their clients have in place to mitigate and prevent both risks and impacts. FIs can seek to ensure that screening and risk assessments reflect key contextual risk factors in AFF sectors:

• Operational and geographical context: national laws governing AFF sectors may not include appropriate protections to workers, land-users and rural communities, and nature and biodiversity; inadequate enforcement and high prevalence of informality and poverty can exacerbate the vulnerability of workers, resulting in severe risks of forced labour and child labour; areas of extensive deforestation and/or high levels of conflict related to land grabbing.
• Type of business relationship: this involves taking account a business’s value chain structure and complexity, and specific forms of business relationships in AFF sector. For instance, vertically-integrated companies who have both down/midstream functions but also production and processing facilities are in a position to be causing or contributing to human rights abuses in production and processing. Contract farming can create opportunities for capacity-building and leverage, but may also engender asymmetrical power dynamics – e.g. in terms of market access, access to finance and inputs. Outsourcing to informal workers at the end of the upstream value chain is common and usually falls outside of value chain mapping, complicating control and traceability.
• Client / investee-specific risk factors: referring to sector-specific benchmarking, such as the WBA Corporate Human Rights Benchmark for food and agriculture sector companies and Platform for Living Wage Financials (Agri-Food); also check reported instances of rights abuses associated with the (potential) client / investee.
• Presence of vulnerable groups: smallholder farmers and seasonal and temporary AFF workers, including day labour, represent the most vulnerable parts of the workforce in AFF upstream value chains. The presence of migrant workers, informal labour (including family labour), children, and women may amplify both the scale and scope of an impact and increase its probability.

See ‘Taking Action – Strengthen FI risk management systems and processes’. See also ‘Human Rights Screening and Risk Assessment’ for practical guidance on developing risk screening and assessment systems and processes.

Throughout the financial cycle, FIs should gather information on how clients / investees are managing specific human rights risks and impacts relevant to Agriculture, forestry and fisheries (AFF). This could include requiring clients / investees to provide information on:

• Human rights claims or complaints: company’s management of claims and protests from human rights and environmental defenders.
• Labour incidents and / or worker complaints: company’s dispute resolution approaches (including mitigation / prevention measures taken) and extend to contractors and sub-contractors’ workforces. 
• Land acquisition and use: how the company acquires land and ensures that land rights are respected, and how FPIC is implemented (where relevant); any land use agreements in place with local communities or indigenous groups – with particular attention to any terms related to land access and compensation. If relevant, this may also include identifying the type of land where project activities will be located, and measures in place in related to protected areas, indigenous reserves or other types of cultural heritage sites.
• List of suppliers: a complete list of suppliers including, where possible, their locations, types of products provided, and the volume of business conducted with them.
• Supplier assessments: company’s approach to assessing and monitoring suppliers’ compliance with human rights standards, including any measures implemented.
• Environmental management systems: the company’s environmental management systems and certifications.
• Water use and pollution: the company’s approach to water management and pollution prevention, particularly in relation to the use of water in water-stressed areas.
• Biodiversity and conservation: company’s approach to conserving biodiversity and protecting ecosystems.
• Consultation: company’s approach to consultation with potentially affected groups and other relevant stakeholders, including processes, participants, findings and outcomes.

FIs can also engage directly with AFF clients / investees and use or build leverage to require, facilitate, and incentivize respect for human rights throughout the financing cycle. Effective client / investee engagement helps to build a common understanding of risks, gaps, and required actions. This ensures that measures can be adequately appropriated and implemented. This might include a focus on the following areas:

• Promoting client / investee HRDD along the value chain: value chains in these sectors tend to be long with multiple layers of intermediaries, including traders. Equally, human rights challenges tend to be concentrated in the primary phases of the upstream value chain, at production level. FIs can engage with clients or investees to gather information on their human rights impacts and how these are integrated into HRDD and addressed.
• Engaging companies on developing approaches to integrating environmental, biodiversity, ecosystems and land concerns into HRDD: the revised OECD Guidelines call on businesses to carry out due diligence for adverse impacts related to the environment, including climate change, and to recognise that environmental due diligence will often involve taking into account multiple environmental, social and developmental priorities, including the imperatives of a just transition. They also highlight the importance of providing support to small-and medium-sized enterprises and smallholders.  
• Increasing client / investee’s visibility and transparency in relation to value chains: FIs encourage companies to create a comprehensive mapping of their value chains. This enables businesses to begin to understand the possible human rights-related risks to which they are exposed, based on the countries where different commodities are sourced from. Having visibility over the length and complexity of the value chain will also help clients / investees prioritise the actions needed to help identify, prevent and mitigate human rights risks. FIs can encourage clients/ investees to refer to the STREAMS Traceability Matrix to support these efforts.
• Promoting client / investee good practice, including through sector and commodity certification schemes: in some circumstances, FIs can encourage or require clients to participate in certification and standards schemes (including Fairtrade, Rainforest Alliance and many commodity-specific labels). It is important to note that certification schemes are not a replacement, or a proxy, for human rights due diligence. Standards systems can be useful for identifying (some) risks, making connections with stakeholders, raising awareness on harmful practices and improving outcomes for small farmers. See further guidance from Human Rights at Sea (in relation to fishers) and MSI Integrity (in relation to all sectors).

See also ‘Taking Action – Client / Investee Engagement’.

Contractual requirements are also a common tool to build leverage, and FIs should consider integrating human rights considerations into contractual clauses based on organisational human rights policies and commitments. Pending financing modality, FIs can seek to use contractual leverage with clients to encourage the ‘cascading’ of human rights-respecting business practice along the value chain. This may commence with the requirement that the client / investee develops and implements a supplier of code conduct aligned with the international standards which responds to all identified human rights risks for a defined scope of the value chain. Where appropriate, specific risk mitigants and process requirements – including monitoring, reporting and stakeholder engagement – can be elaborated in the action plan and covenanted in contractual agreements. See also ‘Taking Action – Contractual provisions’.

Where risk assessments have identified potential human rights impacts, action needs to be taken. The type of action will depend on the severity and likelihood of the impact/s, as well as on how the FI is involved with the human rights impact/s.  In some financing contexts, such as project finance, environmental and social action plans (ESAPs) are an important and common tool for developing specific mitigants and responses in view of risks. In other cases, particularly where greater risks are identified, specific additional plans might be required.

FIs working with clients / investees in agriculture, forestry and fisheries (AFF) can focus efforts on the following areas:

• Ensuring that salient risks through the client’s / investee’s value chain have been identified and addressed: this may include at a minimum, freedom of association and collective bargaining, living wage, forced labour, child labour, gender & women’s rights, water and sanitation, land rights, and right to Free, Prior and Informed Consultation and Consent (FPIC).
• Developing responsible sourcing practices: FIs can aim to influence longer-term change around sourcing practices and upstream value chain management to enable stronger respect for human rights at production level. FIs can require clients to report on the steps they are taking to ensure their purchasing practices (e.g. order regularity, price pressure) do not contribute negatively to human rights. Where the client / investee is a trader, FIs can provide guidance and build capacity for commercial functions on responsible sourcing including guidance on carrying out risk assessments, ‘buy/do not buy’ criteria, avoidance of unduly low-price quotations and promoting longer-term sourcing to strengthen business relationships across the value chain and create a stronger enabling environment for buyer-supplier joint work to address risks.

For more general information, see ‘Taking Action – Action Plans and Specific Mitigations’.

In relation to agriculture, forestry, and fisheries (AFF), this could include for example: refraining from financing transactions which entail large-scale land acquisitions without adequate consultation and compensation of local communities (and FPIC where relevant); refraining from financing transactions which entail illegal logging practices or forced evictions; refraining from financing transactions which entail Illegal, Unreported, and Unregulated (IUU) Fishing, or destructive practices such as bottom trawling; avoiding imposing project timelines/cost conditions that could lead, facilitate and incentivise abuses of labour rights by the portfolio company. See ‘Taking Action – Avoid actions and omissions that facilitate or incentivise human rights abuses’.

FIs should work collaboratively with stakeholders to inform their policies, identify risks, improve monitoring systems and grievance mechanisms, as well as to address entrenched human rights challenges in Agriculture, forestry, and fisheries (AFF). This should involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the nature and context of the operation. The relevant stakeholders for FIs financing AFF sectors would include: other banks and investors with similar portfolios, industry associations, regulators (such as Ministries/Secretaries of Agriculture), NGOs working on human rights issues linked to the sector, trade unions, industry associations and rightsholders affected or potentially affected by client / investee activities, such as Indigenous Peoples and local communities, and their legitimate representatives.

In particular, FIs can engage with credible multi-stakeholder initiatives that promote human rights principles and standards in the AFF sectors – see ‘Sectoral initiatives and partnerships’ on this page.

FIs should ensure that clients / investees in AFF sectors engage with community stakeholders – including local communities, indigenous peoples and civil society organizations – at all stages of project development by establishing mechanisms for ongoing dialogue and consultation.

Affected communities should have a right to participate in decisions which affect them, as well as access relevant information, including in relation to any environmental and health risks. FIs should require clients / investees to provide information on community consultation processes, participants, findings and outcomes. FIs can also encourage clients in the sector to enter and/or contribute to partnerships at production level (with government, donors, trade unions, CSOs, technical advisors) working to strengthen the position of downstream actors and workers through formalising labour terms and conditions, empowering workers organisations, promoting gender equality and addressing other critical root cause issues affecting the ability of workers and producers to raise concerns or advocate for better conditions. Partnerships can also include international partnerships focused on improving human rights practices from a buying company perspective. See ‘Taking Action – Stakeholder engagement and collaboration’. See also ‘Stakeholder engagement’ for guidance on collaborating, engaging and pursuing collective action.

FIs can enhance transparency and disclosure practices by providing stakeholders with access to sufficient, relevant and frequent information about finance and investments, including potential human rights impacts, mitigation measures, and grievance mechanisms. FIs can also develop and publish reports against clear indicators reflecting a human rights perspective, including salient issues, measures, and results. FIs can enhance their own transparency by disclosing information about the projects they finance, as well as in the risks and impacts detected, and measures implemented. One issue to consider is the limits of confidentiality duty towards clients and when a measure could involve transparency clauses where clients give their consent for banks to provide that information. FIs should encourage clients / investees to report against internationally recognised frameworks: for instance, the GRI Sector Standard for Agriculture, Aquaculture, and Fishing (GRI 13: Agriculture, aquaculture and fishing sectors 2022) informs agriculture and fisheries companies on how to report their human rights impacts, and also provides information on other stages of HRDD, such as identification and assessment of impacts, as well as measurement and tracking. FIs should also require clients to collect data on all production sites (including fisheries and specific vessels). This will in turn incentivise clients to source more directly or to partner with suppliers with higher levels of management capability. Consider using technology platforms and tools which can support or enhance traceability and to increase visibility at farm, forest and fishing vessel level. See also ‘Taking Action – Transparency and disclosure’.

FIs can provide training and capacity building for FI staff, particularly those involved in risk assessments and financial decision-makers, on key human rights issues and the specific risks associated with agriculture, forestry, and fisheries (AFF). FIs can also offer guidance and resources to clients to help them improve their human rights practices, and offer technical assistance and support to a client/investee in building the capacity of farmer groups, smallholder, out-growers or other lower-capacity groups in the value chain. This can include supporting clients / investees to provide smallholder groups with technical assistance with managing member finances, operating grievance channels and monitoring and preventing child labour and labour exploitation. Building the capacity of farmer groups to conduct enhanced monitoring in high-risk production areas or sectors can also support smallholder producer groups to become effective partners in conducting human rights due diligence.

FIs should also ensure that clients / investees have sufficient technical, financial and logistical resources available, including an interdisciplinary team that includes human rights expertise and knowledge on the local context. This might include fostering clients to provide human rights trainings for relevant employees at corporate and/or operational level, potentially including technical / extension staff who are the direct point of contact with producers.

FIs can work with clients / investees to establish robust monitoring and evaluation mechanisms to track the effectiveness of measures taken to prevent and mitigate human rights abuses at the portfolio level. This should focus on mechanisms which allow for continuous feedback and improvement, ensuring that the FI’s human rights practices evolve based on sector- and region-specific lessons learned and emerging best practices. The complaints received through the grievance mechanism should also be used as input to evaluate the effectiveness of the measures implemented.

At the operational level, FIs can support clients / investees to adopt monitoring mechanisms that are appropriate to the level of risk, and led by teams with relevant skills and expertise. In relation to agriculture, forestry and fisheries (AFF) transactions, FIs can focus on technologies and practices that enhance the human rights monitoring in AFF clients / investees, such as satellite monitoring for deforestation. FIs should also ensure that clients / investees have appropriate procedures in place to cascade monitoring through the value chain. In relation to AFF transactions, FIs can focus on:

• Improving clients / investees operations and upstream value chain audit processes: audits are the most common tool downstream companies use to conduct human rights monitoring in upstream AFF value chains. However, both the compliance-focused audit format and the specific scope of auditing schemes have been criticised for failing to effectively identify or address human rights concerns. FIs should encourage clients to develop monitoring plans that are as tailored to context as possible, constructively include suppliers in the process and avoid many of the pitfalls that audits encounter. Complementary and mutually-reinforcing verification processes based on common standards, undertaken at appropriate points in the value chain, can help avoid assessment fatigue and increase efficiency. For instance, auditors may recognise the conclusions of audits carried out by other independent third parties. Downstream companies may wish to focus on ‘choke points’, as opposed to every enterprise in the value chain being assessed.
• Technologies and practices that enhance the human rights monitoring in value chains, such as using blockchain for enhanced upstream chain transparency.

See ‘Taking Action – Monitoring and evaluation’ for practical guidance on monitoring and evaluation processes to track human rights risks and impacts associated with business activities

FIs should ensure that accessible and effective grievance mechanisms are in place to enable affected stakeholders to raise concerns and seek redress for any alleged human rights abuses related to their investment or lending activities in agriculture, forestry and fisheries (AFF) transactions and investments. This includes requiring clients / investees to have in place or to participate in a grievance mechanisms aligned with Principle 31 of the UNGPs. FIs can set up their own grievance mechanisms, participate in one or more grievance mechanisms established together with other FIs, or participate systematically in clients’ / investees’ grievance mechanisms.

In relation to workers, note that grievance mechanisms established by existing industrial relations systems and collective bargaining agreements can constitute effective and credible mechanisms to respect labour rights.

In value chains associated with AFF, human rights grievances are typically related to adverse impacts on workers, Indigenous Peoples and local communities, smallholders, and human rights defenders. Particular attention should be given to gender-sensitive mechanisms and procedural rules, with a particular focus on addressing the challenges faced by women experiencing harassment and violence either in the workplace or in the community.

Downstream companies are well-placed to support suppliers’ in establishing robust grievance management systems, thereby enhancing the detection, resolution, and prevention of adverse human rights impacts. FIs can work with downstream investees / clients to develop a policy on how they expects suppliers to handle human rights grievances in primary production and processing, and the actions that investee / client will take if the supplier fails to take appropriate action.

Assessment of suppliers’ grievance management mechanisms can be integrated into initial human rights due diligence, enabling buyer companies to gauge their suppliers’ human rights management frameworks, and hence to prioritise supplier engagement and support for suppliers’ capabilities in grievance handling. See ‘Taking Action – Improve and support the effectiveness of grievance mechanisms to ensure and enable remedy’.