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Harvesting Inequality: The Social Impact of Financial Institutions' Investments in Asia's Agribusinesses

Tuesday, March 8, 2022

Fair Finance Asia's study reveals gender equality is ignored by financial institutions that are major employers of women as informal workers

Between 2016 to 2020, 125 of the largest agribusinesses operating in the ASEAN, India, Japan, and Pakistan received $22.6 billion in loans and underwriting services from financial institutions active in Asia and worldwide. Specifically, Fair Finance Asia's (FFA) new study assessed the policies of 54 financial institutions actively providing credit and underwriting services to these companies, and the results clearly highlight weak enforcement or overall lack of policies on gender equality, human rights, labor rights, and transparency and accountability.

Negligence by financial institutions coupled with inadequate government regulation and enforcement has led to continued failure by Asian agribusinesses in upholding women's rights and combatting labor and human rights violations that continue to plague one of Asia's most important sector. These types of violations widen the inequality gap by pushing workers, smallholder farmers and local communities, especially women, into poverty.

FFA's report calls on financial institutions to commit to respecting internationally recognized human rights conventions, adopting  gender-responsive approach to human rights due diligence, and embedding these principles in their policies. The report also strongly recommends that sustainable finance taxonomies being developed across Asia support in upholding human rights and labor rights standards. Enforcement mechanisms must also be in place to ensure that relevant policies or standards being developed such as the ASEAN RAI Guidelines are adopted effectively. The RAI Guidelines are a positive step in encouraging ASEAN member states, businesses and investors to implement responsible business practices in the region. However, this will only be possible with better collaboration between countries and enabling a resilient and robust civil society movement across the region to independently track the progress of relevant commitments and initiatives.

Srishty Anand, Lead, Fair Finance India: In India, the assertion of women as a farmer is critical for recognizing the work they do, the awareness of the gendered implication of laws and practices, and their often undervalued contribution as agricultural workers in the rural economy. Based on the report, if the scores of Indian banks remain low for gender equality, labor rights, and human rights, the responsibility of businesses or investors as imagined in the conceptualization of UNGP will remain to be a weak force to change these social realities of gender inclusiveness.

Patricia Selda, Lead, Fair Finance Philippines: Agribusinesses have to consider the social aspects, such as gender inclusivity, considering that women take up almost half of the agricultural labor force in developing countries. Women have been involved in the entire agricultural value chain, from production including postharvest activities. However, recognition of women's contribution to agriculture has often been underrepresented and/or underreported, such as cases where only male members of the household are recognized as farm workers.

Bernadette Victorio, Program Lead, FFA: It's no coincidence that this report's launch coincides with International Women's Day. Through this joint study between FFA and Gender Transformative and Responsible Agribusiness Investments in Southeast Asia (GRAISEA), we echo our call for an urgent shift away from socially harmful financing practices in the food and agriculture sector in Asia, and draw attention to the plight of women and laborers bearing the brunt of their negative impacts across the value chains. Lack of awareness on the issues and on-ground impacts of harmful businesses and financing can no longer be used as an excuse to remain complicit to violations, we need to see greater commitment and action in policy adoption and implementation. 

Read the full report findings and recommendations here.

For more information please contact:
Shreya Kaushik
Research and Advocacy Advisor
Fair Finance Asia
Email: shreya.kaushik@oxfam.org     

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