The UN Sustainable Development Goals and Metropolitan-Level Collaboration

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

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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.

This Day in International Law – October 30

On October 30, 1947, the General Agreement on Tariffs and Trade (GATT) was signed by 23 nations in Geneva. The Agreement contained tariff concessions and a set of rules designed to prevent the parties from subverting the agreement. At the time of its signing, it was the sole international instrument governing world trade.

Ironically, the GATT came about as a by-product of the failure of a larger coalition of nations to agree on a charter for the International Trade Organization (ITO). The ITO represented the grand vision of the UN Economic and Social Council following the end of World War II. Its founding charter was signed by 53 nations, but never ratified, so it never came into effect. But while the larger group of nations failed to ratify the provisions of the ITO, a smaller group implemented the GATT among themselves as an interim measure.

The GATT ultimately proved to have much better longevity than the ITO and it remained in effect until 1994, when it was updated by the GATT 1994. Most notably this update included the agreement that created the World Trade Organization (WTO), which subsequently replaced the GATT in regulating international trade.

The Trans-Pacific Partnership and the Advancement of Investor-State Regimes

The Trans-Pacific Partnership and the Advancement of Investor-State Regimes

By: Jessica Rose

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Photo Credit: epSos .de

 

On October 5th of this year, the United States and eleven other nations in the Pacific Rim concluded negotiations on the largest regional trade agreement in history – the Trans-Pacific Partnership (the “TPP”). While the finalized version of the text has yet to be released, an outline of the agreement by the office of the United States Trade Representative includes an investment chapter that places the TPP squarely within the tradition of investor-state dispute settlement (ISDS) regimes. According to the outline, the TPP will include rules on expropriation and “provisions for expeditious, fair, and transparent investor-State dispute settlement subject to appropriate safeguards … [that] will protect the rights of the TPP countries to regulate in the public interest.”

The conclusion of TPP negotiations coincides with a significant but little-remarked event in the history of ISDS. A recent skirmish in August between foreign investors and the Polish Parliament suggests that foreign investors have found ways to use investor-state laws to influence governments even before those governments enact legislation, calling into question the right of TPP governments to “regulate in the public interest.”

The Background: Investor-State Dispute Settlement

ISDS treaties are designed to encourage the flow of investment, usually from developed to developing countries. One of the ways that these treaties try to attract foreign investment is by giving foreign investors, usually multinational corporations (“MNCs”), a mechanism to challenge the behavior of host states when that behavior negatively affects the value of their investment. MNCs can sue host governments through private arbitration – a system where ad hoc arbitrators, who are private citizens, act as judges. These arbitrators decide whether or not the host state’s behavior was sufficiently unfair to constitute expropriation– effectively taking the investor’s property. If so, the state must then compensate the MNC for its losses. In order to accommodate a range of claims against host governments, usually the ISDS regime will loosen the meaning of “expropriation” with words such as “tantamount to,” as in Chapter Eleven of North American Free Trade Agreement.

What does this look like in practice? In March of this year, an arbitration panel awarded Owens-Illinois Inc., an American MNC, $455 million because Venezuela, its host country, seized two of its glass-bottle plants back in 2010. This award is of the less-controversial variety, as Hugo Chavez spent much of his tenure nationalizing a significant portion of Venezuela’s economy. In cases like this, there are few concerns that a foreign investor was unfairly leveraging their powers under the ISDS regime to punish the host state for legitimate governing behaviour.

Why is ISDS controversial?

Objections to “interference” by foreign investors in the governance of host states are, however, common, because most ISDS regimes allow investors to object even if the action of a host state only indirectly affects the value of an MNC’s investment. Much discussion has focused on foreign investors’ ability to abuse that power.

For example, Elizabeth May, the leader of the Canadian Green Party, has repeatedly voiced objections to ISDS agreements Canada has entered into on this basis. She argues that governments are likely to avoid passing laws if they think a foreign investor will object on the basis that that law interferes with their investment. She says it is difficult to accurately assess the extent to which this “regulatory chill” is operating to shift the course of government action, since it probably comes up before proposed regulation even makes it into parliaments or congresses.

Quantitative research performed in 2014 analyzed empirical evidence to conclude that such regulatory chill is not, in fact, occurring. However, a political skirmish in Poland suggests that this conclusion may have been reached prematurely.

What Happened in Poland

On August 5th of this year, the lower chamber of the Polish parliament adopted a draft law on the restructuring of consumer mortgage loans denominated in foreign currency. The law mandated conversion of foreign currency mortgage loans into Polish zlotys at the exchange rate on the day of the granting of the loan. Banks were to bear 90% of the restructuring costs imposed by this law. Predictions about the net loss to the banking sector were estimated at five billion euro.

Before the higher chamber of parliament in Poland voted on the law, however, several foreign banks controlling the major Polish banks whose business would be affected by the law started a letter-writing campaign. Their message to Polish governmental authorities was that they would be bringing claims under the applicable ISDS treaty if the government voted the proposed bill into law. The Senate changed the loan restructuring terms by reducing the banks’ share of the costs to 50%. The law has since been sent back to the lower chamber of Parliament, where it may be completely retooled so as not to place any direct restructuring costs on banks.

While it would be unfair to presume that these changes were entirely a result of that intervention by the foreign banks, it would also be naïve to suggest that their actions played no role in the Polish Parliament’s change of heart. What this means, then, is that foreign actors managed to leverage the tools afforded them under an ISDS regime to influence the direction and shape of Polish legislation – instead of merely receiving compensation post-facto, when their investment had already been affected by those regulatory actions.

This example presents an interesting dilemma: the democratic process in Poland was arguably compromised by the intervention of foreign interests. However, the effects of a predicted 5 billion loss to the banking sector would likely have been so dire that it is easy to argue that the influence of those foreign interests, in this case at least, were a good thing.

Conclusion

The negotiations underpinning the biggest regional trade agreement in history have just concluded yet the landscape for ISDS regimes is still undergoing drastic shifts. The office of the United States Trade Representative assures that the TTP will include investor-State dispute settlement subject to appropriate safeguards that will protect the rights of the TPP countries to regulate in the public interest.

In this case, foreign corporations redirected the Polish State’s actions – but it is not clear whether it was at the expense of Poland’s sovereignty to regulate in the public interest. Regardless, clarity is necessary for an informed discussion to take place. The relationship between foreign investors and host states must be scrutinized to separate theory from practice, to ensure these agreements are entered into eyes-wide-open.

Jessica Rose is an LLM candidate at Berkeley Law. She is a student contributor for Travaux.