ICC brings eviction and environmental land crimes into remit

The International Criminal Court’s remit has been expanded to include crimes associated with land grabbing and degradation, a shift which could heighten the profile of potential cases, and make investors think twice about emerging markets.

In a new policy paper, the ICC it will co-operate with states who are investigating and prosecuting individuals who have committed or have facilitated crimes including forcible eviction, degradation such as deforestation, child labour and abuse of workers.

However, a lack of “bright lines” delineating exactly which situations or individuals could be accused is likely to put off even responsibly-minded land investors from emerging markets, according to Mark Bishop, managing director and emerging markets agriculture expert at special situations boutique investment bank Aldwych.

“I think that this is a bit of a balancing act to determine where the bright line is being drawn from a liability perspective and how broadly it is being construed,” he said. “If this had a very broad or far-reaching construct, then the risk is that you could have a US pension fund manager invest in a farm asset and find out that there could have been a title defect disclosed post-diligence. [That could] put them on the hook from a legal perspective… The risk is that it could effectively have a chilling effect on emerging market agribusinesses.”

 While it might not affect the position of investors already in emerging markets, the new position is most likely to give new players pause for thought, he added.

The paper expanded on which crimes cases could involve, which could apply to investments in forestry, agriculture or areas like mining and mineral extraction.

“The [ICC] Office will also seek to cooperate and provide assistance to states, upon request, with respect to conduct which constitutes a serious crime under national law, such as the illegal exploitation of natural resources, arms trafficking, human trafficking, terrorism, financial crimes, land grabbing or the destruction of the environment,” according to the paper.

It also suggests investigations will consider portions of blame by different parties, to be determined on a case-by-case basis. The document does not contain any explicit references to investors, but says various parties could be tried and apportioned different degrees of blame in a case.

Bishop, who recently came back from a trip to Peru where he took photos of illegal burning and logging around the inland Ucalayi region (pictured), said that it is clear more needs to be done to prevent bad practice. But he said that if the remit was used to shine a light on responsible investors or companies that made an unintentional error or had tried to remedy problems they detected too late, it could put off much needed investment in undercapitalised countries in Africa and Latin America.

Recent examples where international companies have been accused of bad practice include United Cacao in Peru, which has been blamed by US-based nonprofit Environmental Investigation Agency of deforesting at least 1,944 hectares in the Amazon.

“It seems they may have purchased land that was deforested in recent history, according to satellite imagery,” said Bishop, who did not believe the company had been aware of any wrongdoing.

He said that if the ICC was to make clear who and which situations could be liable, and target edthe worst offenders, its remit could also prove effective while not putting a dampener on investment.

“The problem with the kind of people who are really and purposefully engaging in these kind of activities are probably not going to be accountable, and you might have to arrest them when they are outside their home jurisdiction, so another issue is enforceability of the most serious cases,” he said.

“Take Peru. It is the number one cocaine producer right now, and so it is clear pure government solutions are not enough. We have seen the evidence and there were no police or army around to enforce the law, even if it is legally committed to marginalising deforestation.”

Bishop said that, after working with TIAA-CREF and other institutional investors in emerging markets like Brazil, he is convinced these investors are rigorous around issues like forest canopy and labour treatment. International companies like Olam, with investors such as Temasek, or public pension funds, are already under strong pressure to act responsibly, he said. But the fact that the ICC is turning its attention to land-related crimes, even outside war situations, should make investors more aware of their increasing importance. 

“We are working with a scale cocoa operation in Nicaragua. They are vetting the land using things like satellite imagery taken in the past, partly as a reaction to what has happened with United Cacao in Peru.”

Smarter players will look closely into cases of their own accord, he said, adding that the ICC’s new position reinforced that doing will only become increasingly important.