Master’s Thesis 2020 30 ECTS The Faculty of Landscape and Society Sustainable water footprint of avocado imported to Norway from Chile - Norwegian retailer’s information and influence on water management Jonas Ådnøy Holmqvist International Environmental Studies Acknowledgments: I would like to thank my supervisor, Professor Espen Olav Sjaastad, for his guidance in academic design, resourceful input and patience. I would like to thank Rema 1000, Bama and Nature’s Pride for forthcomingly participating in this study and sharing openly. Gina is the one I owe the biggest thanks for keeping our family ship shape at all times and patiently made room for countless writing hours. 2 Sustainable water footprint of avocado imported to Norway from Chile - Norwegian retailer’s information and influence on water management Thesis summary This thesis investigates the control regimes of the enterprises constituting the value chain for avocado from producers in Chile to the Norwegian retailer Rema 1000. The Norwegian enterprises Rema 1000 and Bama together with Dutch Nature’s Pride constitute the value chain downstream of the producers. The effectiveness of the combined control regime of the downstream enterprises in ensuring sustainable water consumption in the production is evaluated. The thesis also describes the legal and administrative regime for water management in Chile and conclude that the regime and find that the effectiveness of the enterprises control regime is strongly influenced by the state’s water management. Climatic changes including the mega drought affecting Chile since 2010 is briefly described and is found to have significant impact on sustainability of industrial avocado production. By investigating the water footprint and the effects of the control regime this thesis seeks to analyse what Norweigan importers of avocado are doing to ensure sustainability in the production of exotic fruits and vegetables with a potentially large impact in the producing locations. By comparing the practice with global value chain theory the thesis seek to better understand the potential effects of the regime. The due diligence framework is also used to compare the practice of Rema 1000 to an approach for corporate social responsibility (CSR) that is increasingly applied by the private sector and that are likely to become a legal requirement for at least some of the value chain enterprises. The research is based on data gathered from openly published documents from the value chain enterprises, interviews with the enterprises and non value chain stakeholders, document analysis of third party standards and review of research and openly available information from news media and other sources. Avocadoes sold by Rema 1000 are primarily produced close to Panquehue in Aconcagua and sold through Nature’s Pride and Bama. The two Norwegian downstream enterprises contractually demand sustainable water use by their supplier’s, Nature’s Pride does however not require sustainable water use in their policy or contracts, causing a mismatch of environmental criteria through the value chain. I find that the third party standards applied by Nature’s Pride to control producers are not able to guarantee sustainability. I conclude that the groundwater extraction for industrial avocado production in the Aconcagua is unsustainable. This is however not identified by Bama and Rema 1000. I hold that the legal and administrative regime and the climatic changes are contributing to creating the unsustainable situation. Following the conclusions of this thesis I have several recommendations for the value chain enterprises, including a full implementation of the due diligence approach, a strengthened focus on contractual compliance and the cease of purchase of unsustainable avocadoes. 3 Table of contents Thesis summary ..................................................................................................................................3 List of maps and tables .......................................................................................................................5 List of abbrevations.............................................................................................................................5 Chapter 1 Research topic, field of study and research questions .........................................................6 Research topic ................................................................................................................................6 Field of study ..................................................................................................................................6 Research questions .........................................................................................................................7 Chapter 2 Methodology ......................................................................................................................8 2.1 A qualitative case study - Methodology .....................................................................................8 2.2 Document analysis methodology ............................................................................................. 10 2.3 Ethics ...................................................................................................................................... 11 Chapter 3 Conceptual and theoretical framework ............................................................................. 12 3.1 Value chains – information sharing and influence .................................................................... 12 3.2 CSR.......................................................................................................................................... 14 3.3 Human rights due diligence - The business’ responsibility to respect human rights .................. 14 3.4 Water use and sustainability ................................................................................................... 16 Chapter 4 The Chilean water management regime and prior empirical literature ............................. 20 4.1 Legal and administrative conditions water governance, Chile .................................................. 20 4.2 Prior empirical literature (alternate heading?) ......................................................................... 23 Chapter 5 Avocado production and the value chain .......................................................................... 30 5.1 The avocado industry in Chile .................................................................................................. 30 5.2 Current updates ...................................................................................................................... 31 5.3 The value chain ....................................................................................................................... 32 5.4 Control regime of Rema 1000 and Bama ................................................................................. 34 5.5 Nature’s Pride’s Standards and control regime ........................................................................ 40 5.6 Perspectives of non-value chain actors .................................................................................... 51 Chapter 6 Discussion ......................................................................................................................... 54 6.1 Analysing sustainability & Rema 1000’ information systems .................................................... 54 6.2 Problems in the control regime ............................................................................................... 57 Chapter 7 Conclusion ........................................................................................................................ 63 Findings for main research questions ............................................................................................ 63 Contributions to the research field ................................................................................................ 64 Recommendations ........................................................................................................................ 64 Literature list .................................................................................................................................... 65 4 Annexes ............................................................................................................................................ 72 Annex A – List of enterprise documents and correspondence........................................................ 72 Annex B – interview guides ........................................................................................................... 73 List of maps and tables Map 4.1 The watersheds for the rivers Petorca, La Ligua and Aconcagua Map 4.2 Aconcagua basin with vigilance comittees Table 5.1 Exported volumes of avocado from chile per month (2018-2020) Table 5.2 Import periods for avocado Table 5.3 Standards and tools applied in this value chain List of abbrevations: ASOEX: Asociación de Exportadores de Chile CBD: Convention on Biological diverstiy CBI: Center for the promotion of imports, Netherlands Enterprise Agency. COC: Code of conduct CSR: Corporate social responsibility DW: Deutvche Welle EU: Eutropean Union FAO: Food and Agriculture organisation of the United Nations GRI: Global Reporting Initiative GVC: Global value chains IPBES: Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem