Uganda / Agri-Vie Fund-02/Mubende
The IFC-supported Agri-Vie Agribusiness Fund is a private equity fund with the purpose of making equity investments in agribusiness companies in Southern and Eastern Africa. In its current portfolio, Agri-Vie has invested in New Forests Company (NFC), a UK-based forestry company operating established and growing timber plantations in Eastern Africa. Operational in Uganda since 2005, NFC operates three pine and eucalyptus plantations - in the Mubende, Kiboga and Bugiri districts respectively.
In December 2011, four affected community representatives, Oxfam International, Oxfam Great Britain, and the Uganda Land Alliance (a national consortium of organizations advocating on land issues) submitted a complaint to the CAO on behalf of people living around the plantation in Mubende. The complaint raised concerns about evictions and displacement in the plantation area, alleging that the evictions negatively impacted the communities by displacing them from land, destroying their private property, and forcing them to forgo health, education, and livelihood opportunities. The complaint also voiced broader concerns about the IFC’s due diligence.
CAO found the complaint eligible for further assessment in January 2012. The CAO team travelled to the field in February and March to meet with the relevant stakeholders to explore options for a collaborative solution of the issues raised in the complaint. After CAO conducted its assessment, both the representatives of the Mubende affected community and NFC indicated their willingness to participate in a mediation process facilitated by CAO. This is captured in CAO's Assessment Report, which is available under "View Documents" below.
The mediation process aimed at finding an acceptable and workable solution between the Mubende Community representatives and NFC (“parties”). Over 2012 and early 2013, the CAO mediator conducted extensive caucus sessions with each of the parties, as well as their advisors (Oxfam, Uganda Land Alliance). The contents of these caucuses are by agreement confidential, and will not be reported on. The mediator also facilitated direct bilateral discussions and negotiation sessions between the parties, and assisted the parties in developing greater understanding of the issues at hand. The CAO mediation team also worked extensively with the parties, and more particularly the affected community representatives, to ensure they had the requisite capacity to participate in the mediation process.
All the parties who participated, including the representatives of the affected community, their legal advisors, Oxfam, and the NFC showed considerable commitment, patience, tolerance, determination, creativity and goodwill through the mediation process.
In March 2013, the parties signed a Framework Agreement which captured a range of agreed upon principles. In July 2013, after further engagement, these principles were formalised into a Final Agreement. The Agreement represents full and final settlement between the Mubende affected community and NFC on the set of issues set out in the complaint lodged by the community with the CAO.
In terms of the Agreement, the parties will launch a joint programme of sustainable development aimed at benefiting the affected community. The parties have agreed to the following aspects being made public:
• The NFC has undertaken to provide significant support to the MUBENDE BUKAKIKAMA CO-OPERATIVE SOCIETY LTD representing the affected community, expanding its social responsibility investment programme to meet some of the specific needs of this community. The NFC has also agreed to work closely with the co-operative and its members to build more solid and lasting mutually beneficial relations with the community.
• The affected community has agreed to respect NFC’s legal rights to operate within the Namwasa Central Forest Reserve, and both NFC and the community have agreed to act lawfully and to engage with each other to develop long term cooperation and good neighbourliness.
• The parties have agreed to work closely together on a range of programmes and projects aimed at the long term sustainable development of the community.
Oxfam, through its Uganda office, provided on-going support to the affected community throughout the CAO mediation process, and will continue to do so.
The Agreement between NFC and the Mubende community brings to an end the CAO dispute resolution process. CAO is now in a monitoring role to evaluate progress for the duration of the Agreement to ensure its smooth implementation, sustainability and success.
All documents related to this case are available at the below link, including progress reports outlining more details about the status of the case.
For information on the first Agri-Vie complaint, see CAO case "Uganda/Agri-Vie Fund-01/Kiboga".
Status as of August 12, 2014
- Project Name & Number
- Agri-Vie Fund 27674
- Global Financial Markets
- Agri-Vie Fund PCC
- Sub-Saharan Africa
- Environmental Category
- US$7m equity investment
- Eligible: Completed
- Assessment Period: Completed
- Facilitating Settlement: Completed
- Monitoring/Close-out: In Process