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Sierra Leone: Report finds investors failed to conduct human rights due diligence prior to exiting development project; incl. company comments

Swedwatch's report entitled 'No Business, no rights: Human rights impacts when land investments fail to include responsible exit strategies. The case of Addax Bioenergy in Sierra Leone', alleges that Swedish DFI Swedfund, and the Dutch equivalent FMO among others, pulled out from Addax Bioenergy, an extensive and high-profile sustainable project in Sierra Leone without performing adequate human rights due diligence prior to their exit, jeopardising local communites' livelihoods and food security. All companies involved were contacted by Swedwatch during the research process and offered the chance to read and comment on the report before publication. The statements are available on Swedwatch’s website here.

The report highlights the need for investors to establish and fulfil responsible exit strategies regarding development projects. It also includes a foreword by the UN Special Rapporteur on the Right to Food, Hilal Elver.

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Article
8 November 2017

Press release: New report finds Swedfund and FMO failed to respect human rights when they exited a bioenergy project

Author: Swedwatch

The Addax Bioenergy project was supposed to increase food security and reduce poverty in local communities in Sierra Leone. Instead, communities were left worse off after the project stalled. A new report by Swedwatch titled “No Business, No Rights”, shows how development finance institutions Swedfund and FMO failed to respect human rights when they sold their shares in Addax without conducting human rights due diligence... ”Human rights risks related to a project failure are generally not accurately assessed by investors beforehand”, she [UN Special Rapporteur on the Right to Food Hilal Elver] says. According to the UN Guiding Principles for Businesses and Human Rights, companies have a responsibility to conduct ongoing human rights due diligence. Swedwatch recommends Swedfund and FMO, as well as other DFIs, to conduct human rights due diligence both in relation to project shut-downs and to exits. Swedfund and FMO, together with other involved parties, are also urged to assess the human rights impacts related to the stalling of the Addax project, and to contribute toward remediation for affected communities

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Report
8 November 2017

Report: 'No Business, no rights - human rights impacts when land investments fail to include responsible exit strategies'

Author: Swedwatch

This report illustrates the impacts on local communities when land-related projects stall and when investors and companies have failed to identify and address such risks beforehand. It also explains the responsibility of investors at a premature and unplanned exit (divestment) [based on] a case study from Sierra Leone... During the research process Swedwatch also contacted the companies involved in the project. Sunbird Bioenergy provided information via email and one of the company managers took part in a telephone interview with Swedwatch...  Swedwatch met with Swedfund for interviews on several occasions, including to discuss findings of research, while FMO chose to send written answers to Swedwatch’s questions. Swedfund, FMO and Sunbird Bioenergy were offered the chance to read and comment on the report before publication... The report concludes that Swedfund and FMO, together with other involved parties, should assess how they could best assist in the remediation of the impacts caused by the Addax Bioenergy project stalling, and in preventing and mitigating the impacts related to the resumed operations... For future land-related projects, requirements on human rights due diligence and exit strategies that takes into account human rights risks should be put on businesses to make sure local livelihoods and food security are not jeopardised... [G]overnments must [...] put clear requirements on companies and investors and ensure that human rights defenders can carry out their work safely.

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