The UN Sustainable Development Goals and Metropolitan-Level Collaboration

UN Sustainable Development Goals: SDG 11 Should Emphasize Metropolitan-Level Collaboration to Achieve Its Objectives


By: Madeleine Wykstra

SDG 11 may foster a valuable opportunity through metropolitan collaboration and regulation at the subnational level to combat climate change, while avoiding political obstacles and bureaucracy at the national levels of government.

It’s Urban October, according to the United Nations Human Settlements Programme (UN–Habitat). The campaign is one of many promoted by various UN branches to encourage sustainable urban development and address uniquely urban challenges. Such emphasis on the role of the city in sustainable development is rightly placed. The new UN Sustainable Development Goals (SDGs), adopted at last month’s summit, recognize this important relationship between cities and sustainable development in its eleventh goal (SDG 11): to “[m]ake cities inclusive, safe, resilient and sustainable.”

The SDGs establish a new set of global objectives for member states over the next fifteen years. They succeed the organization’s eight Millennium Development Goals (MDGs), which launched in 2000 and aimed at combatting various dimensions of poverty. Salient criticisms of the MDGs were their “tensions with international human rights legal standards,” a lack of emphasis on regional and local level participation and difficulty in measuring their ultimate role in mitigating poverty—all of which remain ongoing debates, for another time.

The new SDGs, seventeen in all, are set to be achieved by the year 2030. Some goals are reinvigorated versions of their MDG predecessors while others, like SDG 11, are novel additions. SDG 11 recognizes that half of the world’s population presently resides in cities, and acknowledges that the continued expansion of cities means metropolitan areas will play a central role in sustainable development efforts.

Climate change is the quintessential transnational challenge. To meet this challenge requires the cooperation of nearly two-hundred countries whose governments hold varying degrees of commitment on environmental efforts. SDG 11 presents an opportunity to combat climate change through metropolitan-level collaboration, while avoiding political and bureaucratic obstacles at the national levels of government. Every city faces unique sustainability challenges, but there are many shared challenges that are inherent to urban areas. A platform for cities to engage, collaborate, and self-regulate could produce tangible strides on issues of sustainability, and SDG 11 could provide that space.

The Value of a Transnational Municipal Network

A metropolitan-level approach to sustainable development recognizes that climate change, while international in scope, possesses “different histories and geographies, varying across time and space and in its implications for economies and societies” as noted by Professor Harriet Bulkeley. Moreover, the city is a center of innovation. It possesses the resources and diversity needed to develop creative, groundbreaking approaches to sustainable development. SDG 11 has the potential to harness the innovative capacity of major metropolitan areas and provide a platform for the exchange of solutions through a transnational municipal network. According to research published through the Brookings Institution’s Metropolitan Policy Program, cities would benefit from greater collaboration with one another to “spread best practices, embrace new technologies, and replicate other creative solutions adopted elsewhere.”

Under many circumstances, municipalities have authoritative capacity, through regulatory power, to implement their own sustainability initiatives. Utilizing this capacity, SDG 11 could encourage cities to sign on to environmental agreements, address common challenges to sustainability, and cooperate in finding solutions for a diverse spectrum of metropolitan spaces. A transnational municipal network would offer a platform for these activities. It is sensible that a group of entities, sharing similar goals and facing similar challenges, be provided with a space in which to confront these challenges in concert.

Current Trends in Metropolitan Sustainability Initiatives

City-to-city collaboration is not a novel idea, and there are many city partnerships working at local, national and international levels. Cities like New York utilize public-private partnerships to foster economic growth, sustainable development, and to achieve various other objectives. However, many of these partnerships involve collaboration between the city and private partners, as well as civil society organizations. City-to-city partnerships are less common, but do exist. There are regionally-based partnerships such as the European Innovation Partnership for Smart Cities and Communities, and globally-oriented initiatives such as the International Council for Local Environmental Initiatives (ICLEI), and C40 cities. Until 2011, the United Nations Environment Programme (UNEP) also operated a Climate Neutral Network, though membership was limited to ten countries.

Despite the presence of numerous nonprofits and partnerships aimed at sustainable urban development, participation in such entities is largely limited to those cities which already possess the means and willingness to self-regulate in order to meet sustainability goals. An analysis of different transnational city networks illustrated that such networks are largely “networks of pioneers, for pioneers.” Where SDG 11 could prove most valuable is if it is able to improve participation and self-regulation of cities less active in the sustainability movement. None of the aforementioned partnerships possess the global exposure of the new UN goals. Perhaps by leveraging the expertise and resources of partnerships already underway, a transnational municipal network under the direction of the UN may be able to entice action in cities of UN member states which are less active in the sustainable development movement. It could also encourage funding from private actors towards sustainability initiatives in cities that lack the necessary financial resources to undertake such projects.

Like their MDG counterparts, the viability of the Sustainable Development Goals has been met with some skepticism. Political leaders and scholars alike have voiced concern over the scope and structure of the SDGs. UK Prime Minister David Cameron suggested that there are simply too many goals, and this may muddle their overarching message. Yet a goal such as SDG 11 has greater capacity to include community initiatives, through emphasis on the metropolitan level, and thus develop more tangible results than the more abstract MDGs. A key determinant in achieving SDG 11, and the SDGs generally, will be whether the goals can in fact foster greater commitment and participation of local communities in the sustainable development movement.

Madeleine Wykstra is a J.D. candidate at Berkeley Law. She is a student contributor for Travaux.

Promoting Responsible Investing: Rethinking International Frameworks for Sovereign Wealth Funds

By: Xenia Karametaxas |

Sovereign Wealth Funds (SWFs) are public investment vehicles owned and managed directly or indirectly by governments and set up to achieve a variety of macroeconomic objectives. SWFs typically seek to invest the funds from budget or trade surpluses deriving from national oil or mining revenues, for example. Although Kuwait established the first SWF in 1953 to invest excess oil revenues, the increased use of SWFs is a fairly new worldwide phenomenon. Indeed, their use has rapidly expanded over the past decade and SWFs control remarkable financial assets. In the aftermath of the 2007-2009 financial crisis, they played a major role in the bail-out of global banks such as UBS and Citigroup. With a combined total of over seven trillion dollars in assets as of 2014, SWFs have become key players in the international financial markets and in the global economy.

What Obligations Do SWFs Have to Invest Responsibly?

As institutional investors, SWFs have the fiduciary duty to act in the best long-term interests of their beneficiaries. Since the sovereign manages SWFs according to its territory’s objectives, the ultimate beneficiary is not a specific individual but rather the country’s present and future citizenry. In this context, therefore, socially responsible investment may enable a SWF to increase its financial profitability. Investing in companies with a positive ethical footprint has less negative impacts upon social, environmental and human rights factors. Companies that are involved in human rights violations or engage in severe environmental damage may get bad press coverage, become the target of campaigns by non-governmental organizations (NGOs), or even face lawsuits from employees, the community or other stakeholders. This has adverse business consequences, including lower share prices, high litigation costs, damaged corporate reputation, limited market access, and increased difficulties in recruiting the best employees. Conversely, a SWF that invests in companies with a positive ethical footprint may achieve better economic returns.

However, the fiduciary duties of SWFs towards their beneficiaries, the citizens, go beyond the economic maximization of returns on their investments.

First, SWFs operate as saving funds for future generations and consequently their management has the responsibility to respect and promote sustainable development and social justice through their investments in order to give future generations the opportunity to reap the rewards of the investment.

Second, the duty of SWFs to ensure responsible investment practices derives directly form the 1948 Universal Declaration of Human Rights (UDHR), under which “every individual and every organ of society” should respect and promote, to the extent of its capabilities, the rights set out in the UDHR. Thus, as societal actors under this agreement, investors have the obligation to respect and promote human rights.

Third, although SWFs do not formally become parties to international law treaties in the same way that states do and although such treaties do not impose obligations directly on corporations or investors, SWFs can use international treaties “as a moral compass for their responsible investment practices.” Moreover, as state organs, SWFs act as an extended arm of the state, which is often a formal treaty signatory with a clear mandate to protect human rights and the environment under these treaties.

Finally, as important capital providers and shareholders of large public companies, SWFs have the power to influence the behavior of the companies in which they invest. SWFs can be active owners through the exercise of shareholder rights at annual general meetings, by engaging in negotiations with the management of companies with poor corporate social responsibility records, or by putting pressure on such companies through disinvestment. Because SWFs have the ability to influence the management of large companies, they also have the responsibility to take action to correct negative consequences of the companies’ corporate activities.

SWFs’ Responsibilities Under International Normative Frameworks

The only international voluntary framework of investment and operational principles directed at SWFs are the Generally Agreed Practices and Principles (GAPP), commonly referred to as the Santiago Principles. Launched in 2008 by a working group composed of SWFs (the International Working Group of Sovereign Wealth Funds, or “IWG-SWF”) and the International Monetary Fund (IMF), the Santiago Principles aim to guarantee transparency, clarity, and equivalent treatment to SWFs and private funds. The underlying rationale behind the Santiago Principles is to avoid political interference exerted by or upon SWFs in recipient countries, and also to ease the concerns of recipient countries regarding SWFs’ investments.

Surprisingly, the Santiago Principles do not contain any provision addressing responsible investment practices in particular. Nevertheless, the Santiago Principles implicitly encourage responsible investment principles where avoidance of complicity in unethical conduct or social and environmental harm would protect the SWFs’ financial value. Moreover, responsible investment practices are inherently encouraged by the Santiago Principles’ requirement that SWFs identify, assess, and manage the risk of their operations. Thus, investing in a company that (allegedly) violates human rights or that causes environmental damage could risk the SWF’s reputation and bottom-line.

Of course, there are other existing regulatory frameworks that advocate for greater social responsibility that can also be applied to SWFs. The United Nations (UN) Principles for Responsible Investment, the UN Guiding Principles on Business and Human Rights, and the UN Global Compact all reflect the increasing relevance of environmental, social, and governance issues to investment practices of private and public actors. Nonetheless, given the corporate focus of these resources, they are unsuitable tools to apply to SWFs. Indeed, the small number of SWFs among the signatories of such codes reveals that SWFs may be unwilling or unable to meet the responsibilities outlined in these agreements.

Alternatively, given wide acceptance of the Santiago Principles and its focus on SWFs, the Santiago Principles would be a good starting point to reconcile the ethical and financial aspirations of SWFs. A first step towards greater implementation of responsible investment practices of SWFs should be provided by assessing the implementation of the Santiago Principles and encouraging the development of corporate responsibility provisions. In the long-term, the development of a code of conduct under the supervision of an international body such as the IMF, tailored to meet the specific needs of SWFs, should be considered.

SWFs as Promoters for Responsible Investment Practices

Because of their large size and potential market leverage, and due to their long-term investment horizons and their widespread public visibility, SWFs have the potential to catalyze change beyond their own portfolios.

With $ 863 billion in assets, the Norwegian SWF is not only the world’s largest SWF, but has also established itself as a leader and a model for responsible investment practices. Indeed, the Government Pension Fund Global (NGPF-G), as the Norwegian fund is officially known, has demonstrated how an SWF’s responsible conduct can shape best practices in the private sector and thereby set global standards of responsible investment. In fact, the internal investment policies of the NGPF-G have influenced the investment practices of several Norwegian private institutional investors such as pension funds and investment funds. In addition, the NGPF-F’s Council on Ethics draws up a yearly exclusion list in which companies that should be excluded from Norway’s investment universe are publicly listed. In doing so, the Norwegian SWF not only contributes to the professionalization of RI principles, but also exercises a form of normative pressure for RI on private investors.

To sum up, SWFs have not only a financial but also an ethical mandate towards their beneficiaries—the citizens. Through their leverage and impact, SWFs have the potential to contribute substantially to the improvement of the financial markets and the global economy. However, in the context of international frameworks, responsible investment obligations of SWFs have not received sufficient attention yet. In this respect, I advise that the Santiago Principles include a requirement that SWFs commit to ethically responsible investment behavior. Not only should SWFs avoid investing in companies that cause harm to the environment or that violate human rights, but SWFs should also serve as active promoters of sustainable development.


Reparations for Maya Achi in Guatemala: The Chixoy Dam Case

By: Monti Aguirre

A longer version of this piece was originally published on the International Rivers blog on November 17, 2014.  It has been modified by the author and highlights more recent events.

On Saturday, March 13, 1982, a young Maya Achi man named Carlos Chen’s life was forever altered. That day, he painfully learned that his wife, children, and sisters had been viciously massacred. They—along with many others—were brutally tortured and murdered, and their bodies were then thrown into a nearby creek and a mass grave. Their crime? Living on land that Guatemala’s military dictatorship wanted to flood for a hydroelectric dam.

By the time the Chixoy Dam was completed in 1985, more than 400 Maya Achi people had been massacred, thousands more displaced, and the livelihoods of 11,200 families subverted. The survivors of the massacre were eventually moved to a village, named Pacux, built for the displaced. But since arriving there, their living conditions have always been poor, and they have lacked access to adequate housing, health care, electricity, water, education, and employment. After the military dictatorship fell in 1996, some survivors began to fight for reparations. In the 1990s, the Maya Achi partnered with international human rights organizations to begin a decades-long struggle for justice against the dam builder and funders.

The Fight for Reparations

The word reparations—feared by people in the world of infrastructure development—means making up for a past wrong. Financiers of large development projects have shunned away from admitting that some projects that their institutions financed have caused harm. International financial institutions also claim indemnity against any legal claims on them. Consequentially, the damages caused to people and the environment do not get addressed.

Who built the Chixoy Dam? The government of Guatemala. Who funded the dam? The World Bank and the Inter-American Development Bank. Who suffered, were massacred, and never gained any benefits from the dam? The Maya Achi people.

Dam reparations had never happened before. But after twenty-two years, the perseverance of the people in the Coordinating Committee of the Communities Affected by the Chixoy Dam (COCAHICH) and the savvy negotiations skills of Maya Achi leaders paid off. On Saturday, November 8, 2014, Carlos Chen and hundreds of community members were part of a historical event in Rabinal, a town close to the resettlement of Pacux. Guatemala’s President Otto Perez Molina asked forgiveness from the communities for the government’s role in the social, cultural, and environmental destruction caused by the Chixoy Dam. That afternoon, President Molina presented the Reparations Executive Agreement, which operationalizes reparations for the thirty-three communities who were drastically impacted by the construction of dam. The Agreement includes more than $154.5 million to fund individual compensation, infrastructure, development assistance, and environmental restoration.

“It is the obligation of the State to repair the damages,” said Juan de Dios Garcia, a COCAHICH leader. While obtaining reparations is indeed a well-deserved victory for the Maya Achi, Juan was able to put this victory in perspective. “What we want most is the end of this type of human rights violations. The international financial institutions, governments, and investors should stop manipulating communities and deceiving people to build their projects.”

The Historical Shift toward Justice

Though ultimately a victory, the Maya Achi’s success was the result of years of politics and struggle. Their achievement must thus be understood in a broader context of justice seeking. Governments, construction companies, and financiers seldom step up to take responsibility for the damages caused by development projects they build and finance. The World Bank and the Inter-American Development Bank for many years failed to recognize their obligations to address reparations for these communities, even though community leaders and their advocates sent letters and declarations and made numerous visits to Bank officials.

Then in 2008, something changed. Beginning that year, Bank representatives, government officials, and community leaders participated in a negotiations roundtable for reparations. US law firm Holland and Knight agreed to provide pro bono assistance to communities. After many revisions, all sides finally agreed upon the Reparations Plan of 2010, which established as its general aim the need for the government of Guatemala to provide reparations for the economic, social, psychological, cultural, and environmental damages to those affected by the Chixoy Dam. Setting a precedent of reparations opens the door for thousands of people affected by dam and mining project to initiate the reparations process. At the same time, however, the precedent also put at risk future investments on infrastructure and resource extraction projects. In light of these concerns, among others, political and economic interests got in the way of the Reparations Plan of 2010 and the plan was never implemented.

It was not until January of 2014—when the US Congress instructed the Banks to ensure implementation of the Chixoy Reparations Plan of 2010—that the Banks began to pressure the government of Guatemala to address reparations. The US Congress made new loans to Guatemala conditional on the Guatemalan government moving to begin implementing the 2010 Reparation Agreement. Under this pressure from the US Congress, the Banks in turn pressured the government of Guatemala to address reparations. And so the plan, four years later, gained traction.

The Guatemalan government has approved the 2015 budget allocating funds to pay for these reparations, but it is still unclear where funds will come from. We at International Rivers—an organization dedicated to protecting waterways and defending the rights of communities that depend on them—insist that the Banks make interest-free loans to pay their long-due debt to Maya Achi communities affected by the Chixoy Dam.

Life will never be the same for the Maya Achi. Their loved ones, whose lives were taken to make way for the dam, will not come back. But the Maya Achi will begin to restore their lives and restore their dignity. An important precedent has been set.

Monti Aguirre is the coordinator of International Rivers’ Latin America program. She has supported the Maya Achi people in their quest for reparations since 1999.

The Berkeley Journal of International Law, the Environmental Law Society, and Ecology Law Quarterly will be hosting International Rivers at Berkeley Law on February 11, 2015.  Peter Bosshard, Policy Director, will speak about the Berkeley-based organization’s efforts to stop some of the world’s most destructive dam projects around the world, to protect the natural environment and local communities’ human rights, and to strengthen decision-making processes and standards in the water sector at the national and international level.