Synopsis

This working paper consists of six case studies, includes an array of sectors, and draws experiences and lessons from these case studies. It provides take-aways for Chinese companies investing overseas and suggestions for Chinese government organizations, financial institutions, NGOs and media.

Please note: This working paper has been published in Chinese. For questions or translations, please contactLihuan Zhou和Denise Leung.

Key Findings

WRI conducted six case studies, each focusing on a non-Chinese multinational company, and used an integrated analytical framework to analyze environmental and social risk management. This analysis has shown that strong environmental and social risk management can benefit companies, while weak risk management can result in profit losses and reputational damage.

This working paper draws experiences and lessons from these case studies and provides take-aways for Chinese companies investing overseas:

  1. 公司应仔细研究并遵守东道国法律。

  2. 公司应充分了解东道国的政治和文化背景，并准备解决各种情况。

  3. 公司应与不同的利益相关者积极协调，以获得当地社区的更多了解和支持。

  4. 公司应加入领先的国际工业组织，并采用行业最佳实践以降低环境和社会风险

Executive Summary

中国的外国直接投资（OFDI）一直在急剧增加。在2008 - 2009年的金融危机期间，全球外国直接投资（FDI）下降了40％，而中国的OFDI则增长了8％（UNCTAD，2013年）。2012年，中国投资者在141个国家和地区投资了772.2亿美元，比2011年增长了28.6％（MOFCOM，2013年）。在金融危机后的时代，中国公司和银行为不足但渴望发展的国家提供了资金。在这些国家，中国的投资通常受到欢迎，但也引起了一些担忧。例如，中国投资者投资了一些高风险的环境项目，包括由于高风险而被其他投资者拒绝的一些项目。环境影响会导致动荡，并导致社区和东道国政府的批评，从而危及项目。中国投资者面临着保护在促进当地经济发展的同时，保护其投资的国家的责任和挑战。

Multi-national companies from other countries have also experienced some of the same issues that Chinese companies are facing now. Through years of investment, these companies have garnered experiences and lessons regarding the environmental and social risk of foreign investment. Chinese companies can utilize these experience and lessons to create opportunities for their own investments and risk management systems. WRI conducted six case studies, each focusing on a non-Chinese multi-national company, and used an integrated analytical framework to analyze environmental and social risk management. This analysis has shown that strong environmental and social risk management can benefit companies, while weak risk management can result in profit losses and reputational damage.

This working paper consists of six cases, and includes an array of sectors. The cases are summarized below:

  1. 在1960年代，美国公司Freeport-McMoran Copper and Gold Inc.开始在印度尼西亚巴布亚开采。自由港的投资始于政治上动荡的时代。它的投资还与印度尼西亚偏远和贫困地区的普遍侵犯人权和环境退化有关。随着1990年代国际社会和当地紧张局势的压力越来越大，弗里波特最终重新设计了其处理环境和社会问题的方式。尽管Freeport现在已经大大减少了环境的影响并为当地社区带来了好处，但今天仍在看到上一个时代的困难局势的影响，并且仍然发生了暴力情况。

  2. Australian BHP Billiton entered Papua New Guinea in 1981 to explore the Ok Tedi copper mine. In the ensuing 17 years, the waste from the copper mine polluted the nearby Ok Tedi River and Fly River basin. The international community exerted great pressure on BHP Billiton, contributing to the company withdrawing its investment in 2001.

  3. Newmont Mining Corporation, a US company, developed Ahafo Mine Project in Ghana in 2003. From 2005 to 2006, the project led to nearly 10,000 homeless or relocated people. Three years later, a cyanide spill in a nearby river led to widespread deaths of local fish populations. Although Newmont paid significant attention to environment and social impacts, this project still caused considerable impacts.

  4. Malaysian Sime Darby invested in the palm oil industry in Liberia. The Liberian government and Sime Darby signed a franchise agreement giving Sime Darby the right to use 220,000 hectares of land in 2009. Lack of clarity over land ownership led the government to represent local communities and residents in negotiations with Sime Darby to gain support for the project, but it created tension between Sime Darby and local communities. It hindered the progress of the project, leading to huge financial losses.

  5. 亚洲Pulp & Paper (APP) is one the world’s largest pulp and paper companies; its projects have contributed to large-scale deforestation in Indonesia. Since the 1990s, APP operations both directly and indirectly led to conflicts among local communities, exacerbation of climate change, and destruction of local vulnerable species habitats. Through the efforts of NGOs, large downstream enterprises boycotted APP, which led to significant financial loss. This pressure led to APP’s commitment in February 2013 to use sustainable development best practices.

  6. The Camisea Natural Gas Project is Peru’s biggest energy project. The project is financed by a consortium led by Argentina PlusPetrol with additional funds from international financial institutions. Although both the Peruvian government and the Inter-American Development Bank established detailed environmental regulations and “security” policies, the consortium only took partial responsibility for environmental protection and stakeholder communication. Located in an ecologically sensitive area in Peru, the Camisea project is one the world’s most controversial natural gas projects.

该工作论文从这些案例研究中汲取了经验和经验，并为中国公司投资于海外投资的经验和课程，如下所示：

  1. 公司应仔细研究并遵守东道国法律。如果东道国的法律制度薄弱或不清楚，则该公司应确保其自己的社会和环境标准很强。公司风险管理政策的第一步应该是遵守东道国法律并寻求专业法律建议。许多中国公司的资源和土地投资都位于环境保护法律和政府法规仍在改善的领域中，并且公司在此类领域进行投资时应谨慎。解决风险的一种有效方法是超越遵守东道国法律。例如，公司应主动提高自己的标准，以减少其运营的负面环境和社会影响。

  2. 公司应充分了解东道国的政治和文化背景，并准备解决各种情况。在2000年代中国“出门”阶段开始时，中国公司在海外采用了中国商业惯例。但是，每种文化都有自己的工作方式，公司应采用新方法来解决问题。这包括雇用了解当地文化并促进公司与当地利益相关者之间的沟通的专业人员。

  3. 公司应与不同的利益相关者积极协调，以获得当地社区的更多了解和支持。公司应学会与东道国的中央政府以及地方政府，社区，商业伙伴和媒体合作。在获得社区支持的过程中，公司应了解，在没有咨询的情况下，单方面的薪酬和投资不会保证成功实施项目。公司应确保对所有利益相关者的信息可用和透明，并建立申诉机制，以确保将解决当地问题。

  4. 公司应加入领先的国际工业组织，并采用行业最佳实践以降低环境和社会风险. Best practices will also assist companies to reduce the probability of negative environmental and social impacts, therefore reducing risks. They will also demonstrate to companies how to actively respond to situations, and reduce the risk of reputational damage and financial loss.

In addition, this working paper provides suggestions for Chinese government, financial institutions, NGOs and media, as summarized below:

  1. The Chinese government should include the impacts of overseas investments in its domestic environmental management system to protect the national reputation. Possible approaches include upgrading current environmental policies for overseas investments to enforceable laws or regulations, applying current laws or regulations for domestic investments to overseas investments, and strengthening regulation for corporate social responsibility reporting. In particular, some industries with potentially large environmental social impacts, such as large-scale infrastructure and mining, would benefit from further guidance and instruction from the government.

  2. Chinese financial institutions can enhance their knowledge of environmental and social risk management from leading multilateral development banks as well as directly learning about international practices by co-financing projects with these institutions. When providing loans to companies or projects, financial institutions can improve their own environmental and social risk management policies and prevention systems to encourage companies and other financial institutions to adopt better environmental and social risk management systems.

  3. Chinese NGOs can build bridges between investors and local communities. NGOs can also promote strong environmental and social performance in host countries, leading to an increase in positive contributions and a reduction in negative impacts.

  4. Chinese media can strengthen cooperation with foreign counterparts to raise awareness among local people, NGOs and local media. Media can also contribute to on-site investigation to protect the local environment and communities through fact-finding.

This working paper follows the World Resources Institute’s 2013 publication, Environmental and Social Policies in Overseas Investments: Progress and Challenges for China. We will continue to study the environmental and social impacts of China’s overseas investments. In our next publication, we plan to focus on Chinese foreign investments and analyze the standards and practices applicable to environmental and social risk management.