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As part of its ongoing work on private law and agricultural development, a group of experts under the auspices of the International Institute for the Unification of Private Law (UNIDROIT) and in collaboration with the International Fund for Agricultural Development (IFAD) prepared the Legal Guide on Agricultural Land Investment Contracts (ALIC Legal Guide). The ALIC Legal Guide provides innovative guidance to improve such contracts by operationalising a number of international principles and standards for the promotion of responsible agricultural investment. The ALIC Legal Guide may be used by a broad range of legal actors when developing contracts, domestic policies, regulatory frameworks, and corporate social responsibility programmes. It may also be used to support capacity development and to raise awareness among legitimate tenure right holders and local communities regarding their rights.
Information regarding the background on this work, including Working Group meeting summaries and consultation reports is provided below.
The Governing Council, at its 91st session (Rome, 7-9 May 2012), authorised the Secretariat to pursue consultations and preliminary work with a view to the possible preparation of an international guidance document on agricultural land investment contracts, taking into account, in particular, the UNIDROIT Principles of International Commercial Contracts (UPICC).
Subsequently, in a memorandum for the Governing Council regarding the Work Programme for the 2014-2016 triennium, the Secretariat noted that several international initiatives then underway touched upon this area from various angles and varying degrees of depth, most notably the preparation, within the FAO Committee on World Food Security, of the Principles for Responsible Investment in Agriculture and Foods Systems (CFS-RAI Principles). The Secretariat suggested that the work on land investment contracts should await adoption of the CFS-RAI Principles and build upon the experience acquired in developing the UNIDROIT/FAO/IFAD Legal Guide on Contract Farming.
Following the adoption of the Legal Guide on Contract Farming at its 94th session (Rome, 6-8 May 2015), which is available via this link, the Governing Council discussed potential future work in the area of private law and agricultural development together with representatives of FAO and IFAD, who indicated a willingness to continue collaborating on future work in this regard. The Governing Council instructed the Secretariat to undertake a stocktaking exercise and feasibility study on land investment contracts, in order to decide whether UNIDROIT’s particular expertise would be of additional benefit in this field.
The Secretariat conducted the requested stocktaking exercise and feasibility study, which was submitted to the Governing Council at its 95th session (Rome, 18-20 May 2016) and is available at this link. The feasibility study indicated that, although other existing international instruments and policy documents contained important policy guidance on investments in agricultural land, UNIDROIT could use its private law expertise to build upon such instruments and documents and prepare, in collaboration with the Rome-based agricultural development agencies of the United Nations system and other institutions, valuable legal guidance for farmers, investors, governments, and other stakeholders. As agricultural land investment contracts are complex and deal with various areas of law, the added benefit and impact of detailed yet concise legal guidance on this subject matter could be significant. The feasibility study discussed this in detail and identified legal issues that could be considered for coverage in the possible guidance document.
The Governing Council took note of the feasibility study and decided to recommend that the General Assembly include the topic of an international guidance document on agricultural investment contracts in the UNIDROIT Work Programme for the 2017-2019 triennium and assign it a high level of priority. The General Assembly endorsed this recommendation at its 75th session, on 1 December 2016.
The Working Group on agricultural land investment contracts met four times. Summaries and documentation for each of the meetings are included below.
The Working Group’s first meeting took place at UNIDROIT’s seat in Rome on 3-5 May 2017, with the objective of receiving expert input to better define the contours of the work, in particular with respect to the possible scope of the instrument, thereby allowing both for the organisation of future work and for consultations with a broader group of experts and stakeholders. In particular, the Working Group discussed, inter alia, the following:
• UNIDROIT and its work thus far on private law and agricultural development;
• general considerations in relation to the work on agricultural land investment contracts, in particular the notion of such contracts; the alignment of the work with existing initiatives, including the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the context of National Food Security (VGGT) and the CFS-RAI Principles; co-operation with the UN agricultural development agencies, non-governmental organisations, civil society, the private sector and other stakeholders; and the objective and target audience of the future instrument;
• the structure of the future instrument and identification of issues to be covered, including the scope, content and form of the instrument; and
• the organisation of future work.
The documentation for the first meeting includes:
• Inf. 1 rev. Draft annotated agenda
• Doc. 1 rev. Preparation of an international instrument on agricultural land
investment contracts: A preliminary outline of issues
• Doc. 2 Report on the first meeting
The Working Group’s second meeting took place at UNIDROIT’s seat in Rome on 13-15 September 2017. The Working Group discussed recent developments and general considerations in relation to the work, in particular with respect to the future instrument’s scope and target audience and its alignment to existing initiatives (e.g. the VGGT and CFS-RAI Principles); examined in detail the draft outline of the future instrument, proposed revisions to that outline and initial drafting contributions for certain chapters; and discussed the organisation of future work, including possible events and other means for raising awareness about the work, consulting stakeholders and seeking their input.
The documentation for the second meeting includes:
• WG2 Inf. 1 rev. Draft annotated agenda
• Doc. 3 Report on the second meeting
The Working Group’s third meeting was held at UNIDROIT’s seat in Rome on 25-27 April 2018. The Working Group began by discussing recent developments, including the Secretariat’s presentation of the work at the World Bank’s Annual Land and Poverty Conference (Washington, 19-23 March 2018), as well as some general considerations in relation to the work (e.g. scope and key themes). The Working Group then reviewed in detail drafts for the chapters and issues identified in the draft in-progress outline of the future instrument on agricultural land investment contracts and considered, in connection with that review, various drafting issues to facilitate revisions (e.g. terminology to be used; the framing of guidance to be offered; the level of detail to be provided; and references to other instruments and sources). Lastly, the Working Group discussed next steps (e.g. remaining drafting and revising responsibilities; stakeholder engagement and consultations for input on the drafts; and the upcoming schedule for the work) and decided that the fourth meeting of the Working Group would be held at UNIDROIT’s seat in Rome on 9-11 October 2018.
The documentation for the third meeting includes:
• WG3 Inf. 1 rev. Draft annotated agenda
• Doc. 4 Report on the third meeting
The Working Group’s fourth meeting on Agricultural Land Investment Contracts took place at UNIDROIT’s seat in Rome on 9-11 October 2018. The Working Group began by discussing recent developments, including a presentation of the work at the panel on “Sustainable Investment in Agriculture” (Rome, 8 October 2018) during the IBA’s annual conference and the upcoming side event on “Improving Agricultural Investment Contracts and the Contracting Process” (Rome, 18 October 2018) that will take place during the CFS’ 45th plenary session. The Group then reviewed in detail drafts for all of the chapters of the future Legal Guide on Agricultural Land Investment Contracts, which are expected to be consolidated into a combined and substantially complete draft by the end of 2018. Lastly, the Group discussed next steps, including the plan for broad and extended consultations on the draft Guide, for incorporating the input received and for finalising the Guide.
The documentation for the fourth meeting includes:
• WG4 Inf. 1 rev. 2 Draft annotated agenda
• Doc. 5 Report on the fourth meeting
In addition, the UNIDROIT Secretariat has held, together with FAO and IFAD, two informal meetings and a CFS Side Event with experts and interested stakeholders – during the 43rd (Rome, 17-21 October 2016), 44th (Rome, 9-13 October 2017) and 45th plenary sessions (Rome, 15-19 October 2018) of the Committee on World Food Security (CFS) respectively – to raise awareness about the work and to solicit input on it.
The first informal meeting was held on 20 October 2016, at which participants discussed the scope, content and form of the future instrument on agricultural land investment contracts (see the draft agenda). The input received during the meeting was taken into consideration in the formation of the Working Group and was provided to that Group once constituted for its first meeting (Rome, 3-5 May 2017).
The second informal meeting was held on 11 October 2017, at which participants reviewed and commented on the draft in-progress outline (see the draft agenda). The input received during the meeting was provided to the Working Group for its consideration in preparing the chapter drafts that were reviewed at the Working Group’s third meeting (Rome, 25-27 April 2018).
The CFS Side Event was held with experts, interested stakeholders and participants on 18 October 2018. Entitled “Improving Agricultural Investment Contracts and the Contracting Process,” the event was moderated by Secretary-General Ignacio Tirado (UNIDROIT) and brought together an impressive panel of experts, including Ms Margret Vidar (FAO), Mr Charles Forrest (IFAD), Mr Lorenzo Cotula (IIED), Mr Brian Baldwin (CFS/Private Sector Mechanism) and Ms Ilaria Bottigliero (IDLO) (see the flyer for the event). The panel discussed UNIDROIT’s future Legal Guide on Agricultural Land Investment Contracts, examined some of the key issues and safeguards addressed in that Guide and sought input from participants for consideration by the Working Group.
Consultations on the ALIC Zero Draft: at its fourth meeting (Rome, 9-11 October 2018), the Working Group agreed that the revised draft Guide – the ALIC Zero Draft – should be submitted to broad and extended consultations to raise awareness about the Legal Guide and to seek further input from stakeholders, in order to ensure a high-quality product that responds to actual needs and complies with ascertained best practices. This course of action was endorsed by the Governing Council at its 98th session (Rome, 8-10 May 2019).
The consultation included various activities.
• Online Consultations. From 1 June until 31 October 2019 the ALIC Zero Draft was made available for comment and feedback as part of an online consultation on the UNIDROIT website, as well as on a number of other key online platforms, including the Global Forum on Food Security and Nutrition (FSN Forum) hosted by FAO, the LandPortal.org, and the Afronomics law website. Comments were also welcomed through UNIDROIT, FAO and IFAD’s social media networks (e.g. Facebook, LinkedIn, Twitter). For more information on the feedback received see the Online Consultations Report.
• Regional Consultations. Thanks to the generous provision of a “micro-grant” from IFAD, three regional consultation events were held around the world in collaboration with IFAD and FAO.
1. Beijing Workshop. The first event took place in Beijing (China) on 9 July 2019 at the University of International Business and Economics (UIBE). The event brought together governmental representatives, academics, legal experts, international organisations and private sector stakeholders to examine the key issues addressed by the future Legal Guide. For more information on the feedback received see the Beijing Consultation Report.
2. São Paulo Workshop. The second workshop was held in São Paulo (Brazil) on 9 August 2019 at the São Paulo University (USP) and gathered 40 participants coming from countries throughout the Latin America region including Brazil, Chile, Argentina, Bolivia, Guatemala, Mexico, Paraguay, and Uruguay, as well as private sector representatives such as the Brazilian Rural Society. For more information on the feedback received see the São Paulo Consultation Report.
3. Nairobi Workshop. The third event was held in Nairobi (Kenya) on 23 October 2019 at the Strathmore University Law School in Nairobi, gathering more than 40 experts from a number of African States, including Kenya, Ethiopia, Nigeria, Uganda, Tanzania, South Africa, and Sudan, as well as legal experts from international organisations such as UN Environment. For more information on the feedback received see the Nairobi Consultation Report.
The key recommendations gathered throughout the course of all the consultations have been summarized and classified according to the issues raised and allocated based on the Guide’s chapters most likely to be impacted. For more information see the Consolidated Report.
Drafting committee meeting: on the basis of the feedback and comments received throughout the ALIC Zero Draft consultation process, the UNIDROIT Secretariat organised, in coordination with FAO and IFAD, a drafting committee meeting in Rome on 2-3 March 2020 (see the annotated agenda). The Secretariat provided a brief overview of the outcome of the consultations and an update on the next steps for finalisation of the ALIC Guide. Members of the drafting committee, including experts from the ALIC Working Group, reviewed each comment and recommendation received on a chapter-by-chapter basis and decided how the various chapters of the ALIC Zero Draft should be accordingly adapted. With a view to the finalisation of the future Legal Guide, a number of issues were discussed, such as: (a) terminology; (b) the framing of guidance; (c) the appropriate level of detail; (d) references to other instruments and sources; and (e) revisions of an editorial nature as to clarity of expression and user-friendliness.
Approval of the ALIC Guide: In September 2020, the UNIDROIT Governing Council approved the Legal Guide on Agricultural Land Investment Contracts.