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IISD | Economic Law and Policy Program
How IISD's Economic Law and Policy Program is advancing sustainable and equitable development

JULY 2019


Dear colleagues and friends,

We are pleased to share with a you a few highlights of recent activities in IISD’s Economic Law and Policy Program. As many of you prepare for a well-deserved break, I am very happy to share with you the link to a book that we just published that I hope may find its way to your holiday reading list: Modelling for Sustainable Development: New Decisions for a New Age. This publication is the result of a one-week Book Sprint that brought together some of the leading global experts and modellers, with diversified expertise in economics and policy development.
The book centres on the question: What would a shift in paradigm from conventional, single-dimension modelling to a more integrated and holistic concept of sustainable development modelling entail? The goal was to have a collective brainstorm about the concepts, challenges and opportunities associated with the concept of modelling for sustainable development. IISD thanks the 12 experts and co-authors for their spirited collaboration. We hope the book will assist policy-makers in commissioning and applying models to their decision-making processes that have sustainable development considerations and objectives at their core, thus ensuring better outcomes for their constituents and the global community.
Nathalie Bernasconi-Osterwalder
Group Director, Economic Law and Policy Program
Voluntary sustainability standards (VSSs) can be a valuable tool for incentivizing more sustainable production methods and practices, complementing government policies and regulation for sustainable agriculture. Our new Global Market Report, the first in a new series tracking developments involving VSSs for a range of commodities, finds that the use of such standards in the coffee sector is on the rise. Despite the various risks the sector faces, such as price volatility and the impacts of a changing climate, the report indicates a clear potential for increasing VSS uptake in some developing economies, particularly with improved risk sharing and greater collaboration among value chain actors. We launched the report at the World of Coffee in Berlin. You can read more about this event in our new commentary.
How investment treaties are designed can be crucial for achieving various public policy objectives. The vast majority of treaties today still follow an old-style investment protection model that undermines rather than supports legitimate government policy-making for sustainable development. Our new report looks at the issue of corruption in the context of international investment governance and takes a deep dive into Canadian investment policy and treaty making. It also examines how a new model Foreign Investment Promotion and Protection Agreement (FIPA) could contribute to efforts at tackling bribery and corruption.

The field of investment law and policy is evolving rapidly, with many of these changes now manifested either in the design of new treaties or the termination and renegotiation of existing ones. Their effects can also be seen in the awards that result from disputes that arise under these treaties. In our latest edition of Investment Treaty News (ITN), we address the importance of  parliamentary oversight in Kenyan treaty negotiations, trends in renewable energy arbitration cases, and an update on and analysis of the investment facilitation discussions among 70 World Trade Organization members.

Interest in renewable technologies, such as electric vehicles, has increased demand for cobalt and lithium—but global supplies are not projected to meet demand. Adopting recycling in the mining sector and in supply chains is essential to ensuring that the transition to a low-carbon economy is responsible and sustainable in the long term.
Contract farming can be a valuable approach for reshaping the relationships between farmers and buyers, and we have devoted a stream of work to helping develop model agreements and clauses with the Food and Agriculture Organization of the United Nations (FAO) that can facilitate their development. We recently held a regional workshop on contract farming in Kigali, Rwanda, in early June to examine contract farming in practice, including from a gender lens, while adapting it to different national and subnational contexts.

Gender inequalities in agriculture persist, making it difficult for women to access productive resources or lands. Development organizations can leverage voluntary sustainability standards to address these challenges when collaborating with farmers’ groups and communities. We discuss the issue in our webinar on sustainability standards, agriculture, and women’s access to land, resources, technology and markets.

We have also held a series of other public webinars as part of our commitment to convening policy-makers and influencers from across different areas to collaborate on new ideas. We recently hosted a webinar devoted to public–private partnership contracts, taking a close look at different approaches to designing these contracts and what they mean in practice, including for sustainable infrastructure development. In early July, we held a webinar on security for costs in international investment law as part of our ongoing “best practice” series on specific topics in investment treaty making.

The demand for sustainable infrastructure, including nature-based infrastructure, is on the rise. But how can developing country governments access public and private finance? Our ever-growing inventory of credit enhancement instruments brings together the various tools available under multilateral development banks, bilateral development agencies, insurance agencies and other actors that can help de-risk infrastructure projects, transferring some of that financial risk to third parties. We recently participated in the Infrastructure Investment Frontiers event to present the expanded version of our inventory to infrastructure experts from across the public and private sectors.

Our Sustainable Asset Valuation (SAVi) tool has allowed us to value the cost of environmental, social and governance risks and externalities in financial terms, giving investors and governments a comprehensive overview of how much an infrastructure project will cost throughout its life cycle. Our recent assessments of nature-based infrastructure have shown that maintaining natural ecosystems will cost governments just a fraction of what it entails to build and maintain their civil-engineered assets that provide the same level of service, such as water storage and carbon sequestration. Our SAVi assessments for Pelly’s Lake and Stephenfield Reservoir in Manitoba were able to demonstrate these cost savings firsthand.

Over the past few months, we have continued our work providing legal and policy advice to governments in Africa, Asia and Latin America. We hosted a workshop on mining local development funds in Ouagadougou, Burkina Faso, for UEMOA members, tailored workshops on investment treaty negotiations in Côte d’Ivoire and Paraguay, and a training on valuing mineral exports in the mining sector in Zambia, to name a few.
The mining industry has undergone a sea change in recent years, due to the advent of new technologies that have a lower carbon footprint and that have drastically reduced the costs of production, among other outcomes. At the same time, these new technologies have already entailed job losses for many, as many roles are becoming obsolete as a result of automation. As mining companies and the countries where they operate are trying to navigate this rapidly changing scenario, we are looking at how to restore the balance that they once had in place in a way that keeps sustainability objectives at its core. In the context of our New Tech, New Deal project, we launched an expert consultation in Paris on the subject, following a similar exercise online in collaboration with Goxi.

The current investor–state dispute settlement (ISDS) regime requires a significant shift on both substantive and procedural terms, and efforts to reform it must be inclusive and transparent. As part of our ongoing work in this area, we continue to collaborate with governments as they engage in the Working Group III process of the United Nations Commission on International Trade Law (UNCITRAL) that is charged with multilateral ISDS reform. Together with our partners, we organized an in-person meeting in Geneva to prepare for upcoming deadlines and meetings in the negotiation process and have complemented that with webinars for developing country negotiators in English, Spanish and French. We are also developing options for specific ISDS reform solutions, together with partner institutions.
The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) is hosting a workshop July 22–25 with the Association of Southeast Asian Nations to advance sustainable mining practices. The workshop will explore a number of issues, including sustainable geology, stakeholder engagement strategies, worker health and safety, and more.

Together with FAO, Oxfam, the Parliament of the Economic Community of East African Countries (ECOWAS) and the East African Community, we are organizing a learning exchange visit in collaboration with the Network of ECOWAS Parliamentarians on Gender Equality and Investments in Agriculture and Food Security. The event, being held in Kigali, Rwanda, explores how lawmakers can develop “best practices” on potential legislative and regulatory approaches.

We are organizing a training in Libreville, Gabon, from July 23–25 on investment treaty negotiations and trends in the international investment law regime, building on our recent trainings for policy-makers in different world regions.
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