January 18, 2012 (at Tokyo)“Current situation on the investment for agricultural land andsustainable use of biomass: How Japan should act? “Land grabbing cases withthe Japanese Companies
Involvement in the Philippines--- Isabela Bioethanol Project --(Tentative Translation)FoE Japan Hozue HATAE
E-mail: hatae@foejapan.org
1

Contents
Isabela Bioethanol Production and Power Plant
Project Overview
Material Procurement (Sugarcane)
Where, How, and Main Issues related to land

Corporate Social Responsibility (CSR) to beneeded for Private Project(Manong Diony’s part)
Life of Farmers in IsabelaConcrete Problems / Concerns caused by Project
Farmland grabbing and Risk at Food Security
Labor Condition

Activity and Demands of Farmers
2

Project Overview●Isabela, Philippines(North-eastern Luzon)- Bioethanol plant= in San Mariano- Farmland forSugarcane= within 30-km
radius fromthe Bioethanol plant3

Project Overview●Purpose
1. Projection and Sale of Bioethanol from Sugarcane(Annual Production 54,000 kl = Largest in the Philippines)
Mix into gasoline for cars in domestic
 Biofuel Act (Republic Act No. 9367)= effective in February 2007
(5% mandated since 2009)
2. Supply of Renewable energy from Sugarcane bagasse(maximum 19MW. Excess power to be sold = 13MW)
Projected CO2 emission reduction = 543,850 t(Under application process of CDM registration)* Continuous employment for around 3,000 households

4Project Overview●Project Cost
US $ 120 million●Project Proponent- Bioethanol Production and Power Plant

Green Future Inovation. Inc. (GFII)= Invested by Japan, Philippines, and Taiwan’s companies
Japanese Companies = Itochu, JGC- Sugarcane Cultivation and Supply

ECOFUEL Land Development Inc.
= 100 % investment from Philippin companies
Investor from Isabela etc.

5Project Overview●Chronology- 2007 ---Public consultations with LGU / residents =Started explanation on project and lease / growing contract- 2008 ---Started sugarcane cultivation at San Mariano- April 2010
Formal Announcement of Itochu and JGC on
Participating the Project- April 2010
Issued the Environmental Compliance Certificate(ECC) for the plants- November 2010 Started the preparation for the construction ofthe plants- November 2010 President Aquino visited Japan
Mentioned the project as one of thesuccessful attraction of Japanese enterprise- April 2011

6Itochu applied for CDM registration of UNFCCC

Project Overview●Bioethanol Plant
Barangay Malabo, San Mariano- Site Area = 31ha
including 4ha = Power Plant- After EIS, ECC was issued

Commercial Operation= to start in May 20127

Material Procurement (Sugarcane)
Delfin Albano●WhereIlagan- Farmland Area:
11,000 hectares(equivalent to 2,353 ofTokyo Dome)

Naguilian

San Mariano＝FoE Japan’s Research on Sugarcane

Idle Land, Grasslands, Marginal landfor different farmcrops
Within the 3030-km
radius from theBioethanol Plant
8

Material Procurement (Sugarcane)●How1. Land Lease Contract
2. Contract Growing Arrangement
1. Land Lease Contract- 5,000 - 10,000 pesos / ha / year = Lease amount- Lease period = renewable every 3 years- Payment for Lease = lump sum of 3 years at once
- signing bonus = 500 pesos / ha etc..
2. Contract Growing Arrangement- ECOFUEL will provide all inputs (fertilizer and farm labor etc.) (no interest)- ECOFUEL will buy all the harvest (deduction of all cost from gross benefit)- Training and assisting on sugarcane farming for free- Signing bonus 500 pesos / ha etc..
9Material Procurement (Sugarcane)● Main Issues related to Land
* Bargaining Power of Farmers
Unfavorable Contract with ECOFUEL- Cheap lease amount- Unknown price for company to buy- Continuous payment of tax etc. during contract period etc.
* Insufficient support for agriculture from government
Contract with ECOFUEL- Lack of farm inputs Idle land
Land-use conversion of farmland for food production
Joint Administrative Order No. 2008-1, Series of 2008
= To avoid the disorderly land-use conversion- Only one remaining farmland for food production in the community X- Area where you can find public / private irrigation facility / where an
individual irrigated for rice / corn production X etc.

10

Material Procurement (Sugarcane)● Main Issues related to Land
* Actual tiller / tenant = lack of prior consultation / consent= hardship of livelihood- Incentive for land speculation among influence persons/landlords Contract opportunity with ECOFUEL
Landlord
Private(Original Title)

TenantNon-actual tenantNon-actual tiller / Nonactual landlord(Fake Title)

Land Reform

CLOA

VOSTitling
A& D

PublicTiller / Occupant(No Title)

Free Patent
ForestStewardship etc.

11

CSR to be Needed for Private Project● How could the existing policies be effective?
- CSR Action Guidelines for Supply Chains of each company etc.
- the 10 Principles of the UN Global Compact (HR / Labor etc.)● How could the “Old” problems be addressed in fullprivate project (with no involvement of public sectors)- Thorough adoption of Free, Prior, and Informed Consent- Contract in English with legal terms
in understandable language and manner- No copy of contract provided etc. to provide the copy
- Recognition of / consideration for wider stakeholder (sociallyvulnerable sector etc.)- Tiller without title, Tenant, IPs / Informal agricultural laborto grasp / understand the characteristic of the society/12
politics / culture etc.

ありがとうございました!!
ありがとうございました
hatae@foejapan.org
Hozue HATAE

13