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Company Response

23 Mar 2021

Silverleafe response to land grab allegations

18 March 2021

[full response attached]

Thank you for your request and opportunity to address information contained in the published report by Lynn Schwisfurth of the Uzbek Forum for Human Rights.

I applaud those in the international community who work every day to fight for human rights in all situations globally and respect the tremendous progress made as a result of these efforts. The concerned consumers of such commentary desire and require accurate facts to build the integrity of these reports and circumstances. The aforementioned report by Lynn Schwisfurth, “Land grab – the new red flag for Uzbek cotton sector,” is bountiful with information. As an American company operating in a joint venture in Uzbekistan, I want to offer my firsthand experience and reply to some of the issues outlined in this report and to directly correct errors regarding Silverleafe International, LLC and its joint venture JV Silverleafe, LLC...

“In general, only one cluster operates in each district of Uzbekistan’s 13 regions, which has created a monopoly situation in whih farmers have no choice over whom they can produce cotton for, leaving them vunerable to exploitative practices.” This suggestion misrepresents the structure for JV Silverleafe, LLC. The author references a link to Uztextilprom which correctly shows hectares of cotton for each cluster; however the suggestion is not accurate that JV Silverleafe, LLC was part of “a process that has seen the direct transfer of control . . . of land to clusters.” The author may assume the referenced link states JV Silverleafe, LLC received title to cotton field hectares of 11,700 hectares; however, JV Silverleafe, LLC has direct title to 2,000 hectares and contracts with farmers for 9,700 hectares. We do not have title for the 9,700 hectares. We work closely with farmers to produce cotton on these additional hectares...

We have gone far beyond the expectations and legal requirements to support our farmers by creating personal and business relationships based on trust and integrity. According to our analysis and consultations with our farmers, the compensation we provide is more than enough to cover the cost of living, meet debt obligations and discretionary spending. We are actively working with them to reduce overall input costs and run a more efficient business practice...

Silverleafe International, LLC is not a subsidiary of the US Silverleafe Capital Partners Group. Silverleafe International, LLC is wholly and solely owned by William D. Patterson and Martin H. Walker. Silverleafe International, LLC is the majority owner of the American Uzbek joint venture, JV Silverleafe, LLC and financed with personal funds...

“A subsequent decree indicates that the amount of land was increased to 11,700 hectares. Under this agreement, the cluster was awarded significant tax exemptions and land grants in return for investments of US$344m.” Context here is essential to understand the significance of this statement. JV Silverleafe, LLC successfully sought rights to additional hectares in order to create a more stable business, which will support investments that will bring higher paying jobs and good working conditions for over 500 local employees, many of whom were marginal farmers who did not want to farm but had no choice as there were no other jobs available...

“According to the decree, farmers were to receive compensation for the cost of seeds and cultivation on 921 hectares of their land which were plowed and destroyed by the cluster. Although the farmers were reimbursed for their crops, they received no compensation for the loss of their land leases or livelihoods.” In JV Silverleafe, LLC’s agreement with the Uzbek government, JV Silverleafe, LLC agreed to purchase the wheat crops from the farmers for the amount of expenses incurred. JV Silverleafe, LLC fulfilled its obligations under this agreement. Crops of farmers were not destroyed. They were purchased by JV Silverleafe, LLC and fall land preparation was initiated. JV Silverleafe, LLC has hired over 100 local farmers and employees and pays them an average 6 million soum, a rate of 3x the local average wage of 2 million soum in the Jizzakh region. Silverleafe has the highest average wage for any cluster in Uzbekistan. We have worked very hard to enrich the lives of their employees and the communities around them. We have made substantial investments to improve life in the communities where the vast majority of our farmers and employees live. We are in the process of making additional investments for water conservation used in farming and to protect the environment in other ways, including a renewable energy investment. Various projects have been solely funded by JV Silverleafe, LLC to enhance community living standards...

In closing, we appreciate the Business & Human Rights Resource Center giving us the opportunity to address the narrative submitted by organizations like Uzbek Forum for Human Rights which rarely accurately reports all that is happening with clusters, farmers and communities. Humanity does not always disappoint as asserted in this article. JV Silverleafe, LLC and our leaders, employees and community partners are making a real difference in agriculture in Uzbekistan. Change is hard and often times messy. I see firsthand the progress of the reforms initiated by the leadership of this country. Daily execution of the reforms is not perfect . . . and none of us, including the readers of this article, execute our daily tasks perfectly. Accountability is paramount and I am glad there are organizations who want to tirelessly pursue this; however, give credit where credit is due and perform real investigative journalism...

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