ELP News | Summer 2018
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IISD | Economic Law and Policy Program

Reforming investor-state dispute settlement

As many of you know, in July 2017 UNCITRAL – the United Nations body responsible for harmonizing international law – received a mandate to reform investor-state dispute settlement (ISDS). At IISD, we have been raising concerns about ISDS for many years, and in fact we have proposed targeted solutions.

We welcome the procedural reform process led by UNCITRAL – even though we believe the reforms need to go beyond procedural. Still, the process currently underway provides an important opportunity to discuss reform at the multilateral level.
In April, the UNCITRAL working group on ISDS held a week of meetings, which we attended. The meetings began with a statement from G77 nations, who voiced strong concerns about ISDS and the need for reform.

Throughout the week, a few member states appeared to want to keep the current investor-state arbitration status quo, and accordingly played down the problems with ISDS. However, the great majority of states expressed strong discontent with the current ISDS regime, indicating agreement on the need for change.

In the latter group, the European Union and its member states, along with a few other countries, continued to promote the idea of a more permanent structure, such as a court, as a solution to many of the problems.
Discussions throughout the week highlighted problems and concerns with the lack of coherence and predictability in international investment law, the lack of independence and impartiality of arbitrators, as well as their inadequate qualifications and lack of representativeness. Other discussions included the issue of fee structures, financial incentives, third party funding, double-hatting and appointing authorities.
The next working group meeting will take place in Vienna in October, at which the group will begin to identify and discuss areas where they believe multilateral reform is warranted. This means that at the next meeting, there will likely be more clarity on the views of governments, though the discussion for options for reform will only follow later. We will be sharing more information in the lead-up to and aftermath of that meeting.

In the meantime, below are some other highlights of how we have been advancing sustainable development over the past few months. As always, we welcome your feedback and look forward to the opportunity to engage with you further. Also, we've recently updated our privacy policy. Please take a moment to view it online.

Nathalie Bernasconi-Osterwalder
Group Director, Economic Law and Policy Program

Canadian Perspectives on Developing a Progressive Agenda for International Investment Law

IISD recently convened an interactive expert meeting to assess and articulate Canadian perspectives—including government, civil society and academia—on a progressive agenda on investment.

To achieve the Sustainable Development Goals (SDGs) we will have to redesign investment frameworks to ensure they support investment for sustainable development. Canada could play a leading role in this debate as the government seeks to identify elements to build a consensus for a progressive trade and investment agenda. The objective of the expert meeting was to discuss ways in which global developments and the need for a clearer Canadian position can be mutually informing and reinforcing. 

This was one of a series of meetings IISD has organized to spearhead a debate in which experts have helped develop new thinking on investment for sustainable development and what it means in practice. This meeting brought the process to Canada on June 13, inviting Canadian experts to contribute to the debate. 

Experts shared their thoughts on how Canada can contribute to reforming investment law to foster investment for sustainable development. The discussion was particularly timely, given that the government will soon launch a consultation on a new foreign investment promotion and protection agreement (FIPA) model, the first since the 2004 consultation. Some of the ideas discussed included: the need for an assessment of the value and the costs and benefits of investment treaties and chapters with ISDS for Canada; how investment-related dispute settlement needs to become more inclusive and transparent and include more diverse forms of dispute resolution, including  multi-party mediation; and the need for strengthened labour standards and greater access to justice for individuals and communities in host countries.

A meeting report will be online shortly.

Sustainable Public Procurement and Infrastructure Investment 

IISD's Sustainable Asset Valuation tool (SAVi) aims to help governments and investors value sustainable infrastructure, building the costs of environmental, social and governance risks and externalities into gross margin, net present value, value for money and more.

We recently hosted capacity-building workshops on SAVi in Senegal, working with the Ministry of Finance, Ministry of Mines and Geology, the Chamber of Mines and the Bureau Opérationnel Suivi (BOS) to explore how to implement the tool to meet their sustainable infrastructure goals. As a result, BOS will pilot SAVi for three projects, aiming to bridge micro- and macro-infrastructure effectiveness assessments with system dynamics and project finance.

Another priority for us is to highlight how public procurement is no longer a back-office function anymore, but a crucial pillar for delivering government services, and a strategic one for tackling climate change. In a recent report with World Wildlife Fund (WWF), we explored why sustainable, green, smart or strategic public procurement requires governments to purchase sustainable products and services and the subsequent benefits for society.

Lastly, don't forget to visit our recently launched Sustainable Infrastructure Finance Portal, which aims to help governments, citizens and financiers address the challenges in closing the $90 trillion global infrastructure gap and position infrastructure as the catalyst for realizing the Sustainable Development Goals (SDGs). Sign up for the portal’s newsletter to receive regular news, updates on research and reports, and insights from our experts.

Foreign Investment Opportunities for Agriculture

To further our goals of responsible investment for sustainable agriculture, IISD is partnering with Grow Asia to support the Association of Southeast Asian Nations (ASEAN) in developing regional guidelines for responsible investment in food, agriculture and forestry.

We presented a first draft of the guidelines to ASEAN stakeholders at a workshop in Indonesia. This gave us the opportunity to hear the views of farmer associations, civil society, international organizations and the private sector. This valuable discussion contributed to strengthening the guidelines, which will be finalized later this year.
While we think national laws are the best legal instrument to govern issues of responsible investment in agriculture, the fact remains that often it is contracts which fill the gaps in national laws. This is why IISD co-convened a workshop on agricultural investment contracts in Cameroon from June 6-8 alongside the International Institute for Environment and Development (IIED) and the Centre for Environment and Development under the EU-funded LandCam program.

This event provided the opportunity for civil society, media and various government ministries to discuss critical legal issues around land-based investment contracts. Participants were tasked with reviewing a 60-page contract in one hour to simulate the often impossible pressures put on negotiators.

Leveraging Mining for Sustainable Development

Women who work in artisanal and small-scale mining (ASM) face economic, decision-making, legal and institutional exclusions due to cultural norms. This is the finding of a new report from the IGF.

Women represent a large percentage of the ASM workforce—about 40 to 50 per cent in Africa alone. However, women’s contribution to the mining sector is masked by the dominant reflection of men’s roles in mining, often hindering their meaningful participation. Our report makes several recommendations for governments to foster women’s economic empowerment, including: providing women miners with legal protection against unlawful discrimination and exploitation; consulting with them throughout the formalization process; and providing legal incentives to enhance women’s access to land and licenses.

Women in ASM will be the focus of a workshop at 
the International Conference on Artisanal and Small-scale Mining & Quarrying (ASM18), taking place in September in Livingstone, Zambia. The IGF is proud to be a supporting partner.

In case you missed our round table discussion on Sustainable Development and Mining during the “Investing in African Mining Indaba” conference in Cape Town in February, the meeting report is now available online.

Read the IGF 2017 annual report to learn more about our work.

The Role of Voluntary Sustainability Standards in Protecting Biodiversity

Agriculture is responsible for 70 per cent of projected losses in terrestrial biodiversity due to land conversion, pollution and soil degradation. In celebration of World Biodiversity Day, we interviewed team member Vivek Voora to learn how standards play a role in protecting biodiversity.

At the World of Coffee conference in Amsterdam, IISD hosted a brainstorming meeting with industry stakeholders on the importance of data collection and knowledge sharing of sustainable production and trade to less developed countries. Discussion centered around which key indicators of sustainable consumption data are needed, how to best communicate and share findings with stakeholders in producing countries, how to improve gathering and sharing sustainable consumption data, and more.

Trade wars, global food security and the environment

A looming trade war could force China to search for new frontiers to secure its soybean demand and protect its supply chains, leading to another wave of so-called “land grabs.” 

Health and investment in the age of the new pandemic

As the burden of non-communicable diseases grows, countries are increasingly regulating the unhealthy food and drinks that can cause them. But will they soon feel the regulatory chill?

IISD at the Annual Meeting of the New Development Bank

In a recent speech, IISD applauded the NDB's move to set out a clear target whereby two thirds of its portfolio will advance sustainable infrastructure, as well as its focus on clean energy, irrigation and water resource management.

Expanding our reach 

The IGF recently welcomed three new members: Sudan, which welcomes the opportunity to combat poverty and improve environmental management; Afghanistan, which commits to accountable and open governance; and Colombia, which aims to generate social and economic progress with their mining industry.

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