Category Archives: sustainable development

COP23: Five Negotiation Priorities for Small Island Developing States (SIDS)

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Alicia Nicholls

In about a week’s time, delegates from over 190 countries will convene in Bonn, Germany for the 23rd Conference of the Parties (COP23) to the United Nations Framework Convention on Climate Change (UNFCCC). During this round of climate negotiations, which will last from November 6-17th, the parties will continue work on implementation guidelines for the Paris Climate Change Agreement signed at COP21 in December 2015.

Despite United States’ President Donald Trump’s statement in June that the United States would be withdrawing from the Paris Agreement, there is some cause for optimism that this year’s COP negotiations will bear fruit. For the first time, a small island developing state (SIDS), the Republic of Fiji, has assumed the presidency of COP and brings to this task first-hand experience from the front lines of the climate change battle.

Secondly, recent natural disasters worldwide have brought increased international attention to the devastating effects of climate change and the need for urgent action on reducing global greenhouse gas emissions. This point was well-made by President of Fiji, Mr. Frank Bainimarama, who stated at a Pre-COP Ministerial Meeting held on October 17 in Fiji that:

“We can no longer ignore this crisis. Whether it is fires in California, Portugal and Spain. Flooding in Nigeria, India and Bangladesh. The dramatic Arctic melt. Ice breaking off the continent of Antarctica. The recent hurricanes that devastated the Caribbean and the southern United States. Or the hurricane that has just struck Ireland and Scotland – the tenth hurricane of the Atlantic season this year. It’s hard to find any part of the world that is unaffected by these events.”

Thirdly, except for the US, political will among the world’s most powerful nations has coalesced on the side of climate action. The 19 other G20 countries reaffirmed their “strong commitment” to the Paris Agreement, calling it “irreversible” in their Summit Declaration following the Hamburg meeting in July.

Below are five key likely priorities for SIDS as they go into the negotiations:

  1. Scaling up Climate Finance to SIDS

At COP15 in 2009, developed countries committed to jointly mobilise USD 100 billion annually by 2020 to meet the mitigation and adaptation needs of developing countries. According to an OECD study, climate-related concessional finance has increased in both absolute terms and as a percentage of total concessional development finance, however annual commitments for 2014 were still 20% of the USD100 billion goal.

SIDS often find it difficult to attract private financial inflows for development purposes due to their small size and economies, and current financing levels do not meet their current needs. Moreover, current graduation criteria have made some middle and upper income SIDS, like those in the Caribbean, ineligible for certain types of concessional financing.

Pledged contributions, whether to the Green Climate Fund or otherwise, also do not necessarily always lead to timely disbursement, and there is the need for guidelines and protocols for incorporating the Adaptation Fund established at COP7 into the Paris Agreement’s framework.

Finding innovative and effective ways to attract and increase financial flows, including from both public and private and bilateral and multilateral sources, will be key. For example, Fiji became the first developing country to issue a sovereign green bond, with technical support from the World Bank, to support the country’s mitigation and adaptation efforts.

  1. Loss and damage

Loss and damage was one of the most contentious topics in the negotiations leading up to the Paris Agreement and was strongly lobbied for by SIDS and LDCs as they are the least culpable but most vulnerable to the harshest impacts of climate change. The concept recognises that there is some irreversible damage which cannot be avoided through mitigation and adaptation strategies.

The Paris Agreement has recognised the concept of ‘loss and damage’ as a distinct concept of climate action and has made the Warsaw International Mechanism for Loss and Damage permanent. It, however, does not deal with liability or compensation, something which developed countries were adamant they did not wish to be included. The softer language used in Article 8, which, inter alia, itemises areas for cooperation and facilitation, is reflective of these developed country concerns.

The costliness of this year’s Atlantic hurricane season is an important background against which SIDS should call for greater discussion on concretely addressing loss and damage, including the successful launch of the Clearing House for Risk Transfer which is slated to take place at COP23.

  1. Adaptation and Mitigation

Developed countries’ continued and increased support will be necessary to assist SIDS in implementing national climate action plans, policies and projects in order to build climate resilience. This support for adaptation and mitigation includes not just financial support, but technology transfer and capacity building and technical assistance.

Certain groups within societies are particularly vulnerable to climate change, including women and children, the disabled and indigenous and rural communities. As such, the COP23 negotiations will involve operationalizing the Gender Action Plan and the Local Communities and Indigenous Peoples Platforms.

  1. More ambitious NDCs

Some 163 parties have already submitted their Nationally Determined Contributions which outline their emission reduction targets toward meeting the goal set out in Article 2 of the Paris Agreement of keeping average global temperature increase to no more than 2 degrees Celsius above pre-industrial levels and as close as possible to 1.5 degrees Celsius. These NDCs may be found at the interim NDC registry.

However, the May 2016 synthesis report on the aggregate effect of INDCs showed that a higher level of ambition will be needed in order to reach the goal in Article 2.

SIDS will want all parties to communicate to more ambitious NDCs after 2018 in order to meet the temperature goals in the Agreement and in keeping with the Article 4(3) commitment of communicating successively progressive NDCs.

  1. Preparations for Facilitative Dialogue 2018

The Facilitative Dialogue which will take place in 2018 will be the first initial opportunity under the Paris Agreement to take stock of parties’ collective progress in a transparent manner towards meeting the Agreement’s long-term goal and inform the preparation of NDCs. It will be a precursor to the Global Stock Take, the first of which will take place in 2023 and will occur every five years thereafter.

The Facilitative Dialogue 2018 will be launched at COP23 and parties will need to organise and decide on the procedures, events and expected outcomes in time for its convening. The President of Fiji, who must be commended on his country’s excellent work on preparations for COP23 to date, has indicated that these talks will approached on the principle of ‘talanoa’, a Pacific concept which values inclusive, participatory and transparent dialogue.

A copy of the negotiating agenda for COP23 (current as at this date) may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

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Sport, Entrepreneurship and Development

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Photo credit: Pixabay

Alicia Nicholls

Sport can be a powerful tool for development and economic diversification. This was the central thesis undergirding the Trinidad & Tobago Olympic Committee’s Future of Sport Conference 2017 which took place at Hotel Normandie in St. Ann’s, Trinidad last week. First let me once again commend TTOC President Mr. Brian Lewis and his team on a well-organised and informative event and for kindly inviting me to be a panellist. I also would like to give kudos to all fellow panellists, the moderator and to the audience for making the sessions as engaging as they were.

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TTOC Conference Panel #3: (L-R) Moderator Racquel Moses, Shyamal Chandradathsingh,  Carla Paris, Alicia Nicholls

Sport is a multibillion dollar industry, and countries around the world are seeking ways to capitalise on this powerful tool for economic growth and development. For example, the small state of Qatar has identified sport as part of its national strategic plan. Among other upcoming international events, it will play host to the 2022 FIFA World Cup.

Here in the Caribbean we too have earmarked sport as a potential non-traditional growth sector. In his rousing key note address at the TTOC Conference, Chairman of Trinidad & Tobago’s Economic Development Advisory Board and former Deputy Governor of the Central Bank of Trinidad & Tobago, Dr. Terrence Farrell indicated as much, naming sport as a potential diversification sector for their currently hydrocarbons based economy.

Sport can also be an enabler for achieving the Sustainable Development Goals, which are targets set by the United Nations and to which all UN members agreed to pursue. Specifically, sport can assist not just in poverty alleviation (SDG 1), but also promoting good health and well-being (SDG 3), quality education (SDG 4), gender equality (SDG 5), and promoting peaceful and inclusive societies (SDG 16).  Indeed, this was recognised by the UN through the adoption of a resolution recognising sport as a means to promote education, health, development and peace.

However, for sport to play such a transformational role for growth and development, it is not enough to have raw sporting talent. It is no secret that Caribbean countries’ sporting prowess dwarfs their economic and physical size.  What is needed is a complete support structure. It requires not just the building of a sport entrepreneurial ethos, but a support system, including greater recognition of the role of intellectual property rights, financing and marketing, to name a few. It is this holistic approach which informed the four conference panels which aimed to take the would-be entrepreneur on a journey from conception of the idea to execution.

Again I would like to thank Mr. Lewis and his team for an excellent conference and I look forward to continuing the conversation on how we can harness sport for Caribbean development and growth. For videos and photos from the Conference, do have a look at the TTOC’s Facebook page.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

2015 Year in Review for Caribbean Region: Triumph, Tragedy and Hope

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Alicia Nicholls

2015 has been a year of both triumph and tragedy for the countries which make up the Caribbean region. This article reviews some of the major political, diplomatic and socio-economic challenges and gains experienced by the Region in 2015, many of which would have been covered on this blog throughout the year. It also speaks to the prospects for 2016.

Political/Diplomatic issues

General elections led to changes of government in St. Kitts & Nevis, Guyana and Trinidad & Tobago, while voters in the British Virgin Islands, Belize and St. Vincent and the Grenadines bestowed the incumbent governments with a fresh mandate.  In October Haiti held its first round of presidential elections, as well as local elections and the second round of legislative elections. The second round of presidential voting which was slated to occur on December 27, was postponed indefinitely in December.

On the international stage, the election of Prime Minister Justin Trudeau in Canada was widely welcomed in the Caribbean Region as possibly heralding a new era in Caribbean-Canadian relations. However, the electoral defeat of President Nicolas Maduro’s United Socialist Party of Venezuela (PSUV) in the Venezuelan legislative elections in December has caused concern in the Caribbean about the future of Petrocaribe, a legacy of the late President Hugo Chavez under which Venezuela provides oil to participant Caribbean States on preferential terms.

In international diplomacy, the Region had two major triumphs. The first was the historic election of Dominica-born Baroness Patricia Scotland as the first female Secretary-General of the Commonwealth of Nations.  The second was the conclusion by 196 parties of an international climate change agreement in Paris, which though not perfect, paid consideration to the interests and needs of small states.

The catastrophic human and economic devastation inflicted by Tropical Storm Erika in Dominica in August and Hurricane Joaquin in the Bahamas in September-October, and the prolonged drought and water shortages being experienced across the Region are sharp reminders that climate change is an existential threat to the Region’s survival. Access to climate change finance will be critical in financing Caribbean countries’ mitigation and adaptation strategies. Despite the triumph of small states at Paris, this is only just the beginning and a major hurdle will be the ratification of the Agreement by all parties, critically the US.

Caribbean low tax jurisdictions’ battle against the tax haven smear made by metropolitan countries continued in 2015 after several Caribbean countries were included in blacklists by the European Union and the District of Columbia. At the 8th meeting of the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes held in Barbados in October, there was acknowledgement made that the Global Forum was the “key global body competent to assess jurisdictions as regards their cooperation on matters of transparency and exchange of information for tax purposes”. However, the fight is not over.

On the international front, the border disputes between Guyana and Venezuela and Belize and Guatemala remain unresolved.  The Guyana-Venezuela dispute came to a boiling point after the announcement that Exxon Mobil Corp had discovered large oil and gas deposits in waters of the disputed region pursuant to a contract made with the Government of Guyana. While CARICOM countries have pledged their support of Guyana’s sovereignty, Venezuela’s more aggressive diplomatic engagement of the region in recent months has raised questions about where CARICOM states’ loyalties will truly reside; with a fellow CARICOM state or with a major financier. To further complicate matters, Suriname, a fellow CARICOM State, has restated its claim to a portion of Guyana’s territory. Indeed, the expeditious and peaceful settlement of both disputes will be important for the economic future of Guyana.

While the US embargo of Cuba remains despite an overwhelming United Nations vote (191 to 2) yet again in favour of ending it, the United States and Cuba made significant advancements in 2015 in the quest towards “normalization” of relations. These included the easing of several travel and trade restrictions, the mutual re-opening of embassies in August and the announcement in December of an agreement to resume commercial flights between Cuba and US for the first time in more than half a century. The future resumption of air links between Cuba and the US is a welcomed development and instead of simply fearing the impact this will have on their US arrivals, Caribbean States should see this as an impetus to increase their marketing efforts in the US market and to improve the competitiveness of their tourism product.

Socio-economic issues

Lower oil and commodities prices have had a mixed impact on the region. They have been a blessing for services-based, import-dependent Caribbean countries struggling to overcome the lingering effects of the global economic crisis on their economies by slightly reducing their import bills and narrowing their current account deficits somewhat. For commodities exporting Caribbean states, however, the impact has been negative. Low oil prices have had a deleterious impact on the Trinidad & Tobago economy which is dependent on the export of oil and petrochemicals and was recently confirmed to be in recession after four consecutive quarters of negative growth.

The tourism industry, the lead economic driver for most Caribbean countries, saw a strong rebound in 2015 with several Caribbean countries, including Barbados, registering record long-stay and cruise ship arrivals, buoyed by increased airlift and cruise callings and stronger demand from major source markets and lower fuel prices.

However, the Caribbean continues to confront an uncertain global trade and economic climate. As recently as December, Managing Director of the International Monetary Fund (IMF), Christine Lagarde, was quoted as stating that global growth for 2016 will be “disappointing” and “uneven”. Another arena Caribbean countries must watch is the troubled Canadian economy and the depreciation of the Canadian dollar as Canada is one of the major tourism source markets for Caribbean countries and an important market for Caribbean exports.

According to an Inter-American Development Bank (IDB) report released in December, Caribbean exports are estimated to decline 23% in 2015, with Trinidad & Tobago accounting for the bulk of the decline. A bright spark is that St. Lucia, Grenada and Guyana signed on to the World Trade Organisation (WTO)’s Trade Facilitation Agreement, joining Trinidad & Tobago and Belize. The on-going reforms being made by these countries pursuant to the Trade Facilitation Agreement should help facilitate and increase the flow of trade in these countries. Barbados, Guyana and Haiti underwent their WTO trade policy reviews in 2015.

The Caribbean region continues to be one of the most indebted regions in the world. Aside from high debt to GDP ratios, several Caribbean countries continue to face high fiscal deficits, wide current account deficits and sluggish GDP growth. Regional governments will have to continue measures to lower their debt, broaden their exports and lower their import bills.

In September, the world agreed to the 2030 agenda for sustainable development in the form of the 17 ambitious sustainable development goals and their 169 targets. A critical factor for achieving these goals will be access to financing for development. Caribbean countries already face several challenges in accessing development finance owing to declining inflows of official development assistance, unpredictable foreign direct investment inflows and limited access to concessionary loans due to their high GDI per capita. Caribbean States should continue to vocalize their objection to the use of GNI/GDP per capita as the sole criterion for determining a country’s eligibility for concessionary loans.

The alarming rise in crime across the Region remains an issue which Caribbean countries must tackle with alacrity not just for the safety of their nationals but for the preservation of the Region’s reputation as a safe haven in a world increasingly overshadowed by terrorist threats. 2015 was a year marked by an escalation in terrorism, with deadly attacks in Egypt, Kenya, Paris and Beirut capturing international headlines. Moreover, the news of recruitment of some Caribbean nationals by ISIL (Daesh as ISIL calls itself in Arabic) is an issue which Caribbean States must confront.

The growing threat of terrorism has caused some concern about the security and robustness of the Economic Citizenship Programmes offered by some Caribbean countries. St. Kitts & Nevis revamped its programme and in light of the Paris attacks, the Kittitian Government announced in December that Syrian nationals will be immediately suspended from its programme. However, the fact that St. Lucia has forged ahead with the establishment of its own programme, accepting applications from January 1st 2016, shows that some regional governments strongly believe the gains outweigh any potential risks.

High unemployment and youth unemployment rates continue to be major social issues threatening the sustainability of the Region, with consequential implications for crime and poverty reduction and political engagement.

Prospects for 2016

Without doubt there are several issues and challenges which confronted the Region in 2015 and will continue to do so in 2016. Moreover, since the “pause” taken years ago, CARICOM continues to face the threat of regional stagnation and fragmentation. While Dominica must be applauded for signing on the appellate jurisdiction of the Caribbean Court of Justice, it is only the fourth out of fifteen  CARICOM States to have done so nearly fifteen years after the Court’s establishment.

However, in spite of these challenges the Caribbean Region has several factors still going in its favour, including high levels of human development, well-educated populations, political stability and a large diaspora. These are factors which it should continue to leverage but should not take for granted. No doubt a critical success factor will be the ability of regional governments, individually and together, to formulate effective and innovative solutions to the challenges faced, working towards the achievement of the SDGs, and their ability to mobilize domestic and international resources to finance these solutions. Let us also hope that 2016 will be the year where there will be a greater emphasis on increasing the pace of implementation of the Community Strategic Plan 2015-2019. The unity displayed by CARICOM during the Paris negotiations should be a reminder that the Caribbean is at its strongest when united.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. Please note that the views expressed in this article are solely hers. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

COP21 Paris Agreement: A Partial but Important Victory for SIDS and the World but just the beginning

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Alicia Nicholls

Some two decades in the making, delegates from 196 countries around the world made history today by voting to adopt the Paris Agreement to the United Nations Framework Convention on Climate Change (UNFCCC), an internationally binding framework for the post-2015 global climate agenda.

Getting ten people in a room to agree on something is a challenge in itself, far less getting delegates from almost 200 countries with different interests, perspectives and levels of development to agree on an international strategy for tackling climate change. Going into the COP21 there was broad international consensus on the closing window for reversing the deadly course towards unsustainable high levels of global temperature increase and general recognition that while small island developing states (SIDS) contributed little to the problem of climate change, they are the ones which are already suffering the most devastating effects of climate change. However, drilling down into the key issues there were thorny areas of divergence which led to several compromises in the final text.

My personal view, which I will argue in this article, is that while the Paris Agreement is by no means perfect, the fact that parties were able to actually achieve an agreement and its inclusion of many of the concerns which SIDS have advocated for even in compromise form in some cases, makes it a partial but important  first step for tackling what has been recognised as one of the greatest threats to our sustainable future.

Long Term Temperature Increase Target of 1.5 degrees Celsius

A major victory and negotiating point for SIDS through its campaign “1.5 to stay alive” was for commitment by parties to hold the increase in global average temperature to no more than 1.5 degrees Celsius above pre-industrial levels. In support of its negotiating position, SIDS relied on the Structured Expert Dialogue on the 2013-2015 Review of the long term global temperature goal which argued that the global consensus of limiting the increase in average global temperatures to 2 degrees Celsius was inadequate and would threaten the sustainability of both SIDS and low-lying coastal States. This was a sticking point in the negotiations. In the end at article 2(1)(a) the Paris Agreement parties agreed to a compromise position which aims to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels. While this is not entirely what SIDS were hoping for it is a lot more ambitious than what most had expected.

Recognition of Loss and Damage

Another major issue for SIDS was for the agreement to establish an international mechanism to address loss and damage which is treated separately from adaptation. They relied again on the findings of the Structured Expert Dialogue on the 2013-2015 Review which showed that even in low emission scenarios SIDS will still experience substantial loss and damage. As such they argued for recognition by industrialised States of liability and compensation. The worst greenhouse gas emitters US, China and the EU countries were absolutely against any form of compensation or liability.

Article 8 of the Paris Agreement is a mixed victory for SIDS in that parties recognize the importance of “averting, minimizing and addressing loss and damage associated with the adverse effects of climate change”. The Warsaw International Mechanism for Loss and Damage, established at COP19 in 2013, will be one of the mechanisms for facilitation and cooperation and may be enhanced or strengthened as determined by the Parties represents a compromise on the issue of loss and damage. However, in paragraph 52 of the preamble it includes that Article 8 “does not involve or provide a basis for any liability or compensation”. This is likely a compromise for those countries which opposed inclusion of any liability or compensation. While this is a weakness, it is likely this will not be the end of this issue and that SIDS will continue to push for this in the reviews.

Climate Finance

Even though developed States pledged to mobilise USD 100 billion dollars a year in financing for climate change, SIDS have continuously argued about the limited financial resources which have actually been made available to assist in their mitigation of, and adaptation to, climate change. In Article 9, developed country Parties agreed to scale up efforts to provide financial resources to assist developing country Parties with respect to both mitigation and adaptation and should continue to take the lead in mobilizing climate finance from a wide variety of sources, instruments and channels. Other Parties are encouraged to provide or continue to provide such support voluntarily. Developed countries are to report on support on a biennial basis. Other Parties  are to do so voluntarily. The Financial Mechanism of the Convention is to serve as the financial mechanism for the Paris Agreement.

In paragraph 115 of the preamble, developed country Parties are to scale up their level of financial support with a goal of USD 100 billion annually by 2020 for mitigation and adaptation. Interestingly, this bit about the USD100 billion is included in the preamble to the Agreement and not as a binding provision within the text itself which has an impact on its enforceability. A stronger more robust provision would have been desired.

Technology Transfer and Capacity-building support

SIDS were insistent on the inclusion of adequate provisions for adaptation to assist them in their adaptation to climate change, including provisions on technology transfer and capacity-building support. Technology transfer is referenced both in the preamble and the actual text of the Paris Agreement. Article 10 of the Agreement requires parties to strengthen cooperative action on technology development and transfer. A Technology Mechanism and Technology Framework have been established under the Agreement to facilitate this, although the text does not detail how this technology transfer is to occur. Support, including financial support, is to be provided to developing country Parties for implementation. Article 11 of the Agreement itself does not speak to how capacity building is to take place but leaves it up the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement to consider and adopt a decision on the initial institutional arrangements for capacity-building at its first session. It will be up to SIDS to keep pushing for further support for technology transfer and capacity-building support.

Voluntary Greenhouse Gas Emission Reductions

Though the parties recognise in the preamble that deep reductions in global emissions will be required in order to achieve the ultimate objective of the Convention and Article 4(4) of the main text requires developed country Parties to continue taking the lead by undertaking economy-wide absolute emission reduction targets, generally speaking the provisions on greenhouse gas emission reductions are voluntary, vague and crafted mostly in best endeavour language and not in the robust language climate activists and SIDS were hoping for.

Under Article 4(1) parties are to aim to reach global peaking of greenhouse gas emissions “as soon as possible”. Each Party is to prepare, communicate and maintain successive nationally determined contributions that it intends to achieve (Article 4(2)), with the further conditions that there should be progression in each of its contributions and that they should reflect its highest possible ambition. These are to take into consideration each country’s national circumstances and on the principle of differentiated responsibilities.

A mechanism to contribute to the mitigation of greenhouse gas emissions and support sustainable development has been established under the authority and guidance of the Conference of the Parties. However, it is unclear how this is to work. One positive point though is that a share of the proceeds from activities under the mechanism are to be used to cover administrative expenses and to assist developing country parties that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation. Again, however, the specifics on how this will be done will have to be subsequently fleshed out.

Stocktaking/Five Year Reviews

SIDS were adamant that any agreement should include provisions for five-year review cycles of greenhouse gas emissions targets to assess the collective progress towards achieving the long term goal of a 1.5 degrees Celsius target with the first review to take place before 2020. The Conference of the Parties serving as the meeting of the Parties to the Paris Agreement agreed to five year reviews after 2023, but with inclusion of “unless otherwise decided”. Additionally, unlike the “before 2020” recommendation made, the parties agreed to a first global stocktake in 2023. Here again the Paris Agreement features a compromise but is a major win for small states as it allows for periodic reviews so adjustments can be made to ensure the goal of 1.5 degrees is reached.

Legally Binding

Much ado has been made about whether it would be a legally binding Agreement. This discussion was quite moot as Article 2(1)(a) of the Vienna Convention on the Law of Treaties defines a treaty as “an international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation”, while Article 26 further provides that “every treaty in force is binding upon the parties to it and must be performed by them in good faith”. For domestic ratification reasons, the US position however is that it is not a treaty. Because of the concept of separation of powers, a treaty would require Congressional approval which, given the current composition of the US Congress and the strong oil and coal lobbies, is unlikely to receive congressional approval.

Transparency

Article 13 of the Paris Agreement establishes an “enhanced transparency framework for action and support with built-in flexibility which takes into account Parties’ different capacities”. The Transparency Framework established under the Agreement is to build on the transparency arrangements already established under the UNFCCC Convention and there is to be frameworks for transparency to action and transparency of support.Parties are to regularly provide information a national inventory report of anthropogenic emissions by sources and removals by sinks of greenhouse gases and information necessary to track progress made in implementing and achieving their nationally determined contribution under Article 4. However, it does not state how often is “regularly”. There are also reporting obligations in regards to financing and technology provided and received.

The technical expert review provided for under Article 13 is to consist of a consideration of the Party’s support (as relevant), its implementation and achievement of its nationally determined contribution, identification of areas of improvement for the Party, and include a review of the consistency of the information with the modalities, procedures and guidelines referred to in paragraph 13 of the Article. The review is to pay particular attention to the respective national capabilities and circumstances of developing country Parties.

Compliance and Enforcement

The key issue is not whether it is a legally binding agreement but its enforcement of compliance. The greatest weakness of the Agreement is that many of its major provisions are drafted in hortatory ‘best endeavour” language as well as its enforceability and policing given its weak compliance mechanism. Article 14 establishes an expert-committee based mechanism to facilitate implementation of the agreement and compliance with its provisions. However, the fact that it is to be facilitative and “non-punitive” means it is not envisaged to be an enforcement mechanism which actually has “teeth” and would probably be little more than a “name and shame” mechanism. The actual modalities and procedures of this committee are to be decided by the Conference of the Parties meeting as the Parties to the Paris Agreement when they have their first session.

Just the Beginning

In light of the many compromises and vague language in many of provisions, the Agreement is by no means a perfect one and aspirational rather than binding in many of its key provisions. It is, however, a lot better than what it would have been had it not been for the strong defence by SIDS, through the Alliance of Small Island States (AOSIS), of their interests. In light of previous failures and two decades of often challenging climate change negotiations, the fact that we finally have an agreement, which though not perfect, balances interests in a way that is fair and incorporates most of SIDS concerns, is an important victory for SIDS and the world. It recognises the principle of differentiated responsibility and makes some mention of the special vulnerability of SIDS in various provisions. Another positive aspect is that Article 27 provides that no reservations may be made to the Agreement.

The Paris Agreement represents a turning point towards a new post-2015 global plan for climate change adaptation and mitigation. The real test will be in its ratification and implementation. Pursuant to Article 21, at least 55 Parties to the Convention accounting in total for at least an estimated 55 percent of the total global greenhouse gas emissions, have to ratify the Agreement for it to come into force. The US will be a critical case to watch as if it is seen as a Treaty, which it indeed is, Congressional approval will be needed and such approval appears unlikely. No one wants a repeat of the Kyoto debacle.

There is scepticism about whether the “1.5 degrees Celsius” target can actually be reached. Indeed, the INDC Synthesis report released by the UNFCCC Secretariat and which captured the overall impact of national climate plans covering 146 countries as of 1 October 2015, showed that the current INDCs have the capability of limiting the forecast temperature rise to only around 2.7 degrees Celsius by 2100, which still does not support the 2 or 1.5 targets. The review mechanism provides the opportunity to review national climate plans to bring them into this target. SIDS will need to continue their advocacy and use the review mechanisms provided for under the Agreement to continue to hold major emitters to account.

While it is easy to bask in the euphoria of this historic agreement, the world cannot take this moment for granted by resting on its laurels. Now the real work on a low carbon economy begins.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

The WTO Trade Facilitation Agreement and Caribbean Small Island Developing States: Challenges and Opportunities

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Alicia Nicholls

Getting raw sugar from a sugar factory in Guyana or Suriname to supermarkets and kitchens half-way across the world involves many different customs processes and paperwork. The World Trade Organisation’s Trade Facilitation Agreement seeks to cut the red tape and reduce the transaction costs and delays in the movement, release and clearance of goods across borders through the harmonisation, simplification and acceleration of customs procedures.

Trade facilitation, along with investment, competition policy and government procurement, was one of the four “Singapore Issues” which developing countries were opposed to including in the multilateral negotiation agenda at the 5th WTO Ministerial in Cancun in 2003. However, negotiations on trade facilitation were eventually launched in 2004 (pursuant to Annex D of the July Package) with the “aim to clarify and improve” relevant aspects of trade facilitation articles under the GATT 1994″ in order to speed up the movement, release and clearance of goods, including goods in transit.

After nearly ten years of negotiations, the TFA was concluded at the 9th WTO Ministerial Conference in Bali, Indonesia in 2013. It is the only multilateral trade agreement to be concluded so far out of the deadlocked Doha Development Round and the first since the WTO was established twenty years ago.  A separate Protocol of Amendment was adopted by WTO members on November 27, 2014 to insert the TFA into Annex 1A of the WTO Agreement.

The TFA will enter into force once two-thirds of the WTO’s 161 states (as at April 2015) ratifies the agreement. So far of the only 52 countries which have already ratified the agreement, Trinidad & Tobago and Belize are the only countries of the Caribbean Community (CARICOM) to have done so, while Mauritius is the only other SIDS worldwide to have done so. A report published by UNCTAD in September 2014 on the status of implementation revealed that though a priority, trade facilitation is a major challenge for developing countries and least-developed countries (LDCs) and that some of the major barriers to implementation are lack of resources and of legal frameworks.

Caribbean Economies are trade dependent

Trade facilitation is important for Caribbean economies which have a high dependence on trade. Limited natural resources and lack of scale make most Caribbean SIDS (with the exception of Trinidad & Tobago) highly dependent on imported food, fuel and medicines, while their export profiles are characterised by a narrow range of exports and export markets. They have limited participation in global value chains and face declining terms of trade.

Smaller Caribbean SIDS have largely diversified from economic dependence on mono-crop agriculture to services trade, mostly tourism and/or financial services. However, the major commodities exporters in the region (Trinidad & Tobago and the mainland countries of Guyana, Suriname and Belize) rely on exports ranging from oil and natural gas in Trinidad & Tobago and Belize, to aluminium, rice and raw sugar in Guyana and Suriname.

Importance of Trade Facilitation

Despite market access opportunities created by trade agreements, a major complaint for Caribbean SIDS exporters, especially small and medium sized enterprises (SMEs), have been the cumbersome hurdles they face when seeking to export to foreign markets. These hurdles include not just complex customs procedures but also stringent sanitary and phyto-sanitary standards (SPS) and technical barriers to trade (TBTs), these latter two are covered in other WTO agreements (i.e. the SPS and TBT Agreements).

Customs procedures vary by country. By standardising and simplifying customs procedures, reforms pursuant to the TFA can enhance access and predictability for Caribbean SIDS exporters in foreign markets and promote export diversification.

As the industrial action by customs officials in Barbados earlier this year showed, customs delays can negatively impact businesses and consumers. These delays can stem from the time taken to process applications for obtaining import or export licenses to the length of time for barrels and containers to clear ports.The quicker goods clear customs the quicker they can reach businesses and consumers for use as inputs or as final goods. Efficient customs release and clearance is particularly important for time-sensitive perishable products such as fruit and meats. Loss of perishable goods equals lost revenue to businesses.

Transparent customs procedures and rules can also limit the opportunity for corruption by officials at checkpoints. Moreover, as import duties are still important revenue sources for Caribbean SIDS, modernisation of customs collection procedures can facilitate increased tariff revenue collection.

The Agreement

The TFA is divided into 3 sections: general provisions, special and differential treatment provisions for developing country members and least-developed country members (LDCs) and institutional arrangements and final provisions.

It provides binding obligations in relation to procedures for pre-arrival processing, electronic payment, procedures allowing the release of goods prior to the final determination of customs duties, taxes, fees and charge, a risk management system for customs control, post-clearance audits, establishment and publication of average release times, procedures to allow expedited release of at least goods entered through air cargo facilities and procedures for releasing perishable goods within the shortest possible time.

Provisions requiring publication and availability of information (such as applied rates and import/export restrictions) on the internet and for allowing traders and “other interested parties” the opportunity for comment and if necessary consultations before introducing or amending laws of general application to trade in goods, aim to promote transparency. While this latter provision may sound like an invasion of policy space, developing countries should take advantage of this provision to have their say on proposed policies by developed countries which might have an impact on their exporters.

The Agreement also includes some ‘best endeavour” provisions, such as encouraging members to use relevant international standards in their formalities and procedures and to establish a single window for traders. The Agreement further provides for the establishment of a permanent WTO committee on trade facilitation and member states are required to designate a national committee to facilitate domestic coordination and implementation of the provisions of the Agreement.

Special and Differential Treatment

The TFA presents numerous benefits for Caribbean SIDS. However, Caribbean governments’ capacity to implement these trade facilitation reforms varies considerably as evidenced by the difference in their Category A notifications.

The special and differential treatment provisions in Section II of the Agreement take this into account by linking countries’ commitments to their capacity to implement them. Moreover, LDCs will only be required to undertake commitments to the extent consistent with their individual development, financial and trade needs or their administrative and institutional capabilities.

These flexibilities are based on the modalities that had been agreed in Annex D of the July 2004 Framework Agreement and paragraph 33 of and Annex E of the Hong Kong Ministerial Declaration. Developing countries and LDCs are to receive assistance and support for capacity building to implement the provisions of the Agreement in accordance with their nature and scope.

Developing and LDC countries are required to categorise each provision of the Agreement  based on their individual implementation capacity, with Category A being those measures they can implement by the time the Agreement comes into force (or within one year after  for LDCs), Category B being those which they will implement after a transitional period following the Agreement’s entry into force and Category C meaning those which require capacity building support for implementation after a transitional period after the Agreement’s entry into force. Most Caribbean SIDS, including Barbados, have now submitted their Category A notifications.

Trade Facilitation Facility

A key developmental element of the TFA, the Trade Facilitation Facility (TFF) was established in July 2014 to provide assistance to developing countries and LDCs to ensure “no WTO member is left behind”. The TFF is to provide assistance in helping them assess their capacity to implement the TFA, by maintaining an information sharing platform to assist with the identification of possible donors , providing guidance on the implementation of the TFA through the development or collection of case studies and training materials,  undertaking donor and recipient match-making activities and providing project preparation and implementation grants related to the implementation of TFA provisions in cases where efforts to attract funding from other sources have failed.

According to the World Trade Report 2015, once it enters into force, the TFA is expected to reduce total trade costs by up to 15 per cent in developing countries.

Status of Implementation

At the recently concluded COTED meeting in Georgetown, Guyana, CARICOM members reported on their status of TFA implementation. However, this status information has not been made public. Despite this, the Organisation for Economic Cooperation and Development (OECD) has a ‘compare your country on trade facilitation performance’ portal which allows for comparing countries on trade facilitation indicators.

Looking at Barbados’ performance for instance, Barbados “matches or exceeds the average performance of high income countries in the areas of fees and charges and simplification and harmonisation of documents”, with performance improving in appeal procedures and automation. However, some ground was lost in information availability and internal border agency cooperation.

Implementation Challenges

Trade facilitation reforms can be beneficial to Caribbean SIDS.  This does not mean however that there will not be significant implementation challenges, particularly the infrastructure costs related to technology and equipment, and administrative, human resource and training costs. There will also be costs associated with raising private sector awareness. These costs are not just one-time costs but are recurring.  In light of competing resource demands and their limited access to concessionary loans these costs will not be easy for cash-trapped Caribbean SIDS which already have high debt to GDP ratios.

The flexibilities in the Agreement allow states  to implement the provisions in accordance with their capabilities and there are aid for trade initiatives such as the European Development Fund of which Caribbean SIDS have been taking advantage in varying degrees.  Other challenges for implementation include limited human resource capacity and the need to reform existing laws and regulations to give effect to obligations.

Surveys of developing countries and LDCs conducted by the WTO found that trade facilitation remains a high priority for developing countries. For Caribbean SIDS there certainly has been some interesting developments on this front. The governments of several Caribbean states have openly stated their countries’ firm commitment to trade facilitation and their recognition of its potential for economic growth.

Trinidad & Tobago was recently approved for a $25 million loan from the Inter-American Development Bank (IDB) to help strengthen the country’s Single Electronic Window for Trade and Business Facilitation Project (TTBizLink). With the aim of becoming a logistics hub, Jamaica has recently established a Trade Facilitation Task Force. Technical assistance and aid for trade facilitation are also included in the EC-CARIFORUM Economic Partnership Agreement, which includes a protocol on mutual administrative assistance in customs matters.Moreover, in Barbados’ latest Trade Policy Review 2014 WTO members noted the considerable progress the country made with respect to the adoption of trade-facilitation measures. Recently, the island  also amended its Customs Act to allow for post-clearance audits.

Taking full advantage of the technical assistance, aid and capacity building assistance under the TFF will be key for Caribbean SIDS in their implementation efforts.

The Case of Mauritius 

As the Indian Ocean island of Mauritius was the first SIDS to ratify the Agreement, it provides useful lessons for Caribbean SIDS. Seizing the opportunity to boost its competitiveness, Mauritius has received assistance from the International Trade Centre and UNCTAD, including for the establishment of the Mauritius National Trade Facilitation Committee. One can read about the Mauritius experience here.

Conclusions

Despite the high costs and challenges of implementation, trade facilitation reforms pursuant to the WTO TFA have the potential to bring many benefits to Caribbean SIDS. By streamlining the flow of cross-border trade, the ratification and speedy implementation of the TFA by Caribbean SIDS and their trade partners will allow Caribbean exporters to capitalise on the market access openings available in foreign export markets, thereby boosting Caribbean SIDS’ export competitiveness and GDP growth, with spillovers for income and job creation. However, regional exports will still need to meet SPS and technical standards which for many exporters still remain significant barriers to trade.

Ratification and full implementation  of the TFA by all CARICOM states could also improve Caribbean regional integration by easing transaction costs of exporting across CARICOM states. Implementing these reforms also send a strong signal to the business community of these countries’ commitment to improving their business environment.

Full realisation of the benefits of the TFA will not be automatic and the degree will largely be contingent on the pace and depth of implementation of the Agreement by  Caribbean governments and their trading partners and on stakeholder buy-in. Stakeholder holder consultation and strong coordination between public and private actors will be crucial for the formulation of implementation plans and the monitoring and assessment of the impact of the reforms. In this regard, lessons can be learnt from the Mauritius experience. Trinidad & Tobago and Belize have already made the step by ratifying  the Agreement. It is hoped that other Caribbean SIDS will soon follow suit.

The full text of the Trade Facilitation Agreement is available here:

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. Please note that the views expressed in this article are solely hers. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Trans-Pacific Partnership Agreement in Review Part I: The Investment Chapter

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Alicia Nicholls

The Trans-Pacific Partnership Agreement is the largest regional free trade deal concluded to date, creating a free trade area which encompasses 12 Pacific-rim countries and which accounts for 40% of global GDP. The TPP in its preamble speaks of the goal to establish a comprehensive regional agreement that promotes economic integration to liberalise trade and investment, bring economic growth and social benefits, among other things. However, like NAFTA over two decades ago, the TPP Agreement has been mired in controversy from its embryonic stages, with opinion sharply divided on whether it truly advances global trade or whether it sets the clock back on development issues such as labour rights and the environment. This article attempts a sober look at some of the main provisions of the investment chapter of the TPP and is the first in a series of articles which will examine some of the key aspects of the Agreement.

Framers of International Investment Agreements (IIAs) have to play a delicate balancing act between protecting the rights of investors while at the same time preserving the right of host states to regulate in the public interest and in the interest of fulfilling policy objectives.

The TPP’s investment chapter shares many striking but unsurprising similarities with the US Model Bilateral Investment Treaty (BIT) 2012. It includes a long list of definitions followed by substantive provisions detailing investor rights and finally a separate section on procedural provisions providing for Investor-State Dispute Settlement (ISDS).

Definition of “investment”

The definition of “investment”  in the TPP Agreement is broad akin to that in the US Model BIT 2012. It defines an investment as “every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk”. It outlines some of the forms which an investment for the purposes of the Agreement may take. The definition of “investor” is standard and does not merit much discussion for present purposes.

Treatment

The TPP includes national treatment and Most Favoured Nation treatment clauses, which are standard clauses in nearly all IIAs. The National treatment provision (Article 9.4) provides that parties are to accord to investors of another Party and their covered investments treatment no less favourable than that they accord in like circumstances, to their own investors and their investors’ own investments with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. It establishes pre-establishment rights, which is typical of US BITs and US-modelled IIAs.

In recent years the inclusion of the Most Favoured Nation clause in IIAs has been controversial as it allows for treaty shopping. Investors who are claimants in disputes have sought to rely on these clauses to benefit from more favourable treatment provided by the respondent state in treaties with third parties. In Maffezini v Spain, a precedent was established where an investor was able to benefit from more favourable dispute settlement provisions in a treaty which the respondent state had entered into with a third party state. As a result, a few IIAs have opted to omit MFN clauses.

One of the criticisms which have been levelled at the TPP is that the MFN clause potentially negates any progress made on rebalancing the rights of investors with states’ rights to regulate by allowing investors to cherry pick from provisions in older and more investor-friendly agreements.

To their credit, the drafters of the TPP have sought to build in several safeguards. Firstly, at section 9.5(3) a carve-out is made exempting procedural provisions such as those in Section B (ISDS) from applicability of the MFN clause. Secondly, it uses the qualifier term “in like circumstances”, although a broad interpretation by an arbitration tribunal may still be possible.

Minimum Standard of Treatment

The minimum standard of treatment provided for under the TPP is similar to those found in bilateral investment treaties (BITs) and IIAs in general. Per Article 9.6, each Party must accord to covered investments treatment in accordance with applicable customary international law principles, including fair and equitable treatment and full protection and security.

The FET provision in many BITs has been the cause of headache for many states due to its vagueness. This has made it open to interpretation by tribunals which have tended to expand the scope of FET to encompass rights beyond customary international law standards. The proliferation of FET cases brought by investors under NAFTA’s ISDS prompted the NAFTA Commission to release an interpretative note which declared definitively that fair and equitable standard of treatment was no more than the minimum standard of treatment afforded to aliens under customary international law. This language was also included in the US and Canada model BITs.

The TPP drafters sought to mitigate this in several ways. Article 9.6(2) clearly states that the concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. For greater certainty, the framers go further to define what they mean by “FET” and “full protection and security”.

The framers also go to lengths to define what does not constitute a breach. Article 9.6(3) states that determination of a breach of another Article does not establish a breach of Article 9.6. Furthermore, neither the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor’s expectations nor that a subsidy or grant has not been issued, renewed or maintained, or has been modified or reduced, by a Party, do not constitute breaches of this Article, even if there is loss or damage to the covered investment as a result.

Expropriation and Compensation

One of the most pervasive threats posed to foreign investors in a foreign country is direct or indirect expropriation of their investment by the host state without compensation being paid. Similar to standard BITs, the TPP provides that state parties may take measures which directly or indirectly expropriate a covered investment but only in the circumstances outlined under Article 9.7(1) and with compensation.

Performance Requirements

In its preamble, the framers of the TPP talk about recognising the differences in the levels of development and diversity of economies of member states. However, how has this been borne out in the provisions? Performance requirements have been typically used by countries to ensure that investors add value to the local economy. These include requirements on the investor to buy local goods and services, set levels of exports of goods and services, technology transfer and domestic content requirements. The TRIMS Agreement prohibits trade-related performance requirements. However, it has been common practice for US-based FTAs to include prohibitions against all performance requirements. The TPP follows this approach. Four of the twelve parties to the TPP are developing countries.  This therefore will have an effect on those developing countries members of the Agreement as their ability to ensure investors make a contribution to their economies through the use of non-trade related performance requirements will be compromised.

Free Transfer

One of the basic assurances investors look for is the ability to move their assets, such as repatriated profits, freely and without delay into and out of the host country. A standard provision in BITs, Article 9.8 of the TPP protects this right and is subject to the exceptions in 9.8(4). Of concern is that no exception is included for where the host state is encountering exceptional economic or financial challenges, such as currency and balance of payments difficulties. The omission of an exception for financial and economic difficulties is typical of US treaty practice but some treaties such as some UK BITs allow a carve-out for this. Such a provision would be particularly useful for developing countries which are generally more vulnerable to balance of payments difficulties.

Special Formalities and Information Requirements

Article 9.13 of the TPP provides carve-outs from National Treatment and MFN for special formalities and information requirements. It includes a carve-out from the National Treatment provision, allowing a Party to adopt and maintain measures which prescribes special formalities in connection with a covered investment, such as residency requirements for registration and requirements that a covered investment be legally constituted under the laws or regulations of the Party, provided that these formalities do not materially impair the protections afforded by the Party to investors of another Party and covered investments under the Chapter.

It also makes a carve-out from the National Treatment and MFN provisions allowing a Party to require an investor of another Party or its covered investment to provide information concerning that investment solely for informational or statistical purposes. However, such information is to be kept confidential from any disclosure which would prejudice the competitive position of the investor or the covered investment.

Carve-outs for Regulatory Objectives

Investment Agreements are a balancing act between the rights of investors and the rights of host states to regulate in the public interest and in the interest of fulfilling policy objectives. Article 9.15 attempts to make a carve-out by providing that nothing in the Agreement should be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health or other regulatory objectives. However, what happens if the measure in question is not consistent with this Chapter. The inclusion of the phrase “otherwise consistent with this Chapter” is a loophole which potentially negates the efficacy of this carve-out.

Corporate Social Responsibility

The provision on CSR in Article 9.16 is rather weak; it is drafted in best endeavour language and is not enforceable. It simply reaffirms the importance of each Party to encourage enterprises operating in its territory or subject to its jurisdiction to voluntarily incorporate internationally recognised CSR principles into their internal policies. A stronger CSR provision would have been ideal here, particularly a requirement that investors comply with all applicable laws in the host State, comply with international labour standards and adopt environmentally sustainable practices.

ISDS

The most disdain for the TPP’s investment chapter has been targeted at the ISDS provisions. ISDS systems allow an investor to bring a claim directly against the host state. A feature of investment law, they are an innovation in public international law as there is no requirement for the exhaustion of local remedies and the investor can bring the claim directly without having to go through its state of nationality.

Critics argue that ISDS provisions only serve to give investors the ability to sue host States for introducing public policy legislation deemed to hurt their investment. The truth is that the majority of BITs have ISDS provisions. In this regard the TPP is neither unique nor more onerous. ISDS systems are more efficient, while the use of an arbitration tribunal instead of the local courts ensures that decisions are rendered fairly and free of political bias.

That withstanding, the ISDS has many well-documented flaws. ISDS cases are a costly exercise and have been a painful experience for those States which have found themselves on the wrong end of an arbitral award. However, UNCTAD data shows that of the 356 known cases concluded, 37 percent were won by the State, 25% by the investor and 28% were settled. Therefore, it is not an automatic case that the investor wins.

The TPP provides several options of arbitral forum and includes several provisions which attempt to address some of the criticisms made about the ISDS. There is the requirement that the parties to the dispute attempt to resolve the dispute through consultation and negotiation. Claims cannot be made after more than three years and six months have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged.

Lack of transparency has been one of the biggest criticisms leveled at the ISDS system as many arbitral proceedings and awards are not made public. Article 9.23 which deals with transparency in arbitral proceedings, provides that certain documents are to be made public “promptly”. What constitutes “prompt” is not defined and will likely depend on the circumstances. The tribunal is to conduct hearings in public, a marked departure from what is provided in most IIAs. However, Article 9.23(3) makes exceptions for protected information and information that may be withheld under the articles on security exceptions and disclosure of information. The TPP’s ISDS allows for the consolidation of claims arising out of the same set of events or circumstances.

In determining whether to make an award to the prevailing disputing party of reasonable costs and attorney’s fees incurred in submitting or opposing the objection.is warranted, the TPP provides that the tribunal is to consider whether either the claimant’s claim or the respondent’s objection was frivolous, and is to provide the disputing parties a reasonable opportunity to comment. If the tribunal determines such claims to be frivolous, the tribunal may award to the respondent reasonable costs and attorney’s fees.

My verdict on the Investment Chapter

The investment provisions in the TPP are generally no more generous to investors than those found in most standard BITs, including the US Model BIT 2012. Indeed, in several cases the TPP’s framers have attempted to close some of the loopholes which have been so troublesome in older BITs, such as with the FET clause. There are some weaknesses and grey areas in the Agreement. The biggest concern is the MFN clause which if a liberal interpretation by an arbitral tribunal is given may ultimately undo a lot of the improvements made in the TPP by allowing investors to rely on more favourable provisions in other agreements concluded by the host state. While there are some exceptions and additions, the influence of the US model BIT 2012 on the language and content of the TPP’s Investment Chapter is quite strong. The TPP also falls into the same trap many IIAs do in that strong investor protections are not matched by strong obligations on the investor to adhere to local laws, follow environmentally sustainable practices or labour standards. Perhaps the framers missed a chance here to advance investment treaty practice on this. While the TPP is not as development-friendly as one would wish, its investor protections are generally no more generous than most traditional BITs. However, the real test will be in the Treaty’s operation once it comes into force.

More articles in this TPP article series are available here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can read more of her commentaries and follow her on Twitter @LicyLaw.

Access to Justice as a Linchpin of the SDGs: The Sustainable Development Implications of Barbados’ Judicial Backlog

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Alicia Nicholls

Access to justice has been recognised as a linchpin of the sustainable development goals (SDGs) which define the post-2015 global development agenda. Much ink has been spilt on Barbados’ crippling judicial backlog but very little has been said about the implications of this status quo for meeting sustainable development goals. Access to justice, recognised in SDG 16, is both an end and prerequisite for sustainable development as it is the means by which rights and development gains are enforced and protected. As a barrier to the access to justice, Barbados’ clogged court system has not only implications for the achievement of SDG 16 but can also undermine achievement of other sustainable development goals.

Barbados has a well-deserved and internationally renowned reputation as a constitutional democracy with strong institutions, respect for the rule of law and a high level of human development which far exceeds that of many fellow small island developing states. The endemic judicial malaise has been the subject of increasing concern and critique. The latest admonishment comes from the Caribbean Court of Justice, the country’s final court of appeal, in its judgment in Walsh v Ward et al, a dispute which originated in 1998. In what has become all too familiar, the CCJ at paragraphs 68 to 70 of the judgment criticised the length of time the case took and the hardships this delay has imposed on the litigants. The Court also noted that its frequent need to comment on Barbados’ excessive delays reveals that this is a “systemic problem”. On these points, there can be no disagreement.

The Nature of the Problem

In 2013 it was reported that there were over 3,000 cases awaiting trial and that there were 362 cases which were still undecided, some dating back to 1993. A plethora of reasons are usually posited for Barbados ’ backlog including late court starts and short court sessions, frequent adjournments, delays in judges’ delivery of written judgments, trial scheduling issues, misplaced files and/or incorrect filing of documents, lack of client/witness cooperation and the heavy workload of magistrates and judges. There is also no fixed time period for disposal of matters. In its 2008 judgment in Reid v Reid, the CCJ suggested “as a general rule no judgment should be outstanding for more than six months and unless a case is one of unusual difficulty or complexity, judgment should normally be delivered within three months at most”. There is no evidence that this suggestion has been adhered to.  These problems are further exacerbated by an increasingly litigious Barbadian society. In the above-mentioned report, it was estimated that between 1,700 and 2,000 new cases are filed each year.

The Sustainable Development Impact

Although there has been much criticism of Barbados’ judicial backlog, very little has been said about the sustainable development implications. Sustainable development, as defined in the Brundtland Report ‘Our Common Future’, is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Sustainable development depends on a tapestry of interconnected development issues, including poverty reduction, health and education and climate change. This diversity of issues is reflected in the 17 UN member agreed Sustainable Development Goals which succeeded the Millennium Development Goals (MDGs).

Access to justice was not explicitly part of the MDGs but has been recognised by UN Member States in the post 2015 development agenda as both an end and an enabler of sustainable development. Specifically, Goal 16 of the Sustainable Development Goals (SDGs) is to “Promote Peaceful and Inclusive Societies For Sustainable Development, Provide Access to Justice for All and Build Effective, Accountable and Inclusive Institutions At All Levels”.

Access to justice speaks to the populace’s ability to access and obtain redress through the institutions of justice in a manner that is fair, expeditious and equitable. It is fundamental to maintaining the rule of law and allows for the enforcement of rights, non- discrimination and accountability of decision makers. Judicial delays caused by a large judicial backlog limit the access to justice by ordinary citizens. Marginalised groups in society, such as the poor, elderly, disabled, children and victims of domestic violence and sexual abuse are disproportionately affected by judicial delays as they endure significant economic, social and mental hardship or in the case of the elderly, sometimes die before their matter has been satisfactorily settled. Each backlogged case therefore represents at least one victim for whom justice has been delayed and whose rights have not been protected.

Judicial delays also deny accused persons, who often have to wait on remand for years before their case is heard, their constitutional and human right to a fair trial in a reasonable time. According to Prison Studies, about 40% of Barbados’ prison population consists of persons awaiting trial. A large prison population puts a strain on the public purse, resources which could be better used for social development programmes.

Access to justice is also undermined where there is no public confidence in the system. If public utterances are anything to go by, the Barbadian public appears less than satisfied with the current state of the judicial system. Persons who do not have the confidence in the judicial system are more likely to take matters into their own hands.

The current backlog not only threatens the access to justice for citizens but can hurt economic activity and thereby undermine economic development (SDG 8). Expeditious case processing and resolution are important in a commercial context where time is money. Economic and reputational costs associated with lengthy delays in the settlement of matters are problematic not just for big firms, but are even more costly for small and medium sized businesses which may lack the revenues to stay in business while awaiting a decision. Any investor seeking to do business or invest in a country wants to be assured that it has prompt access to the local courts in order to enforce contractual rights and that it will not waste resources or possibly go out of business due to inordinately long waiting times. In the Doing Business Report 2016 Barbados currently ranks poorly (164 out of 189 countries) on the efficiency of the judicial system at resolving commercial contracts before the courts. These are indicators which investors consider and have implications for Barbados’ attractiveness as a place to invest.

What is being done?

There have been numerous attempts over the years to unclog the judicial backlog problem with very limited success. Among the initiatives have been the new Civil Procedure Rules, the requirement of case management conferences, the creation of special purpose courts, the on-going removal from the computer system of “dead” cases, the addition of three more judges and the Chief Justice’s practice direction on backlog reduction. There are also more recent on-going regional initiatives like IMPACT Justice and the JURIST project which seek to address the justice system as a whole, including facilitating much needed digital access to all the Laws of Barbados and court decisions.

But are the steps far enough? Alternative dispute resolution has been proposed as a possible solution, a suggestion supported by this Author in an article in 2012. The pre-action protocols provide that parties  to a dispute must engage in “genuine and reasonable negotiations with a view to settling the claim economically and without Court proceedings”. The Court Annexed Mediation Pilot project has been unrolled in the High Court and some of the magistrates courts. However, Barbados still has no Mediation Act or a mediation board. The solutions so far have not been enough to deal with the scale of the problem. Therein lies a critical issue; what is the scale of the problem?

Official judicial data is woefully lacking on critical indicators such as time to resolution of cases before each court, the size, age and composition of the backlog in each court, the number of outstanding judgments, the average time each judge takes to render a judgment, and average stay on remand. In an effort to allow for comparative measurement of progress for countries, the UN will be developing global indicators during the next year to facilitate data gathering for each goal and target. Countries are expected to formulate their own indicators based on their own unique circumstances. Data on these indicators would provide local authorities with a comprehensive understanding of the scale, nature and causes of the backlog problem which would assist in the formulation of performance goals and the type of interventions needed. Without this any changes would simply be cosmetic.

Additionally, we the Barbadian public have heard of many judicial reform initiatives but very little on what they have achieved thus far. Progress reports on the impact of these reform initiatives should be published to help restore public confidence in the system.

An efficient and effective judicial system is essential for upholding the rule of law, safeguarding rights and ensuring the smooth functioning of democratic processes, all of which are needed for sustainable development. The long shadow of Barbados’ case backlog creates pressures on the courts, delays the process of justice and redress, particularly to the disadvantaged, and erodes public confidence in the system. Delays in the settlement of commercial cases can hamper business activity, potentially undermining economic development. Targeted interventions based on a data-supported understanding of the nature and causes of the problem are needed, while public reporting on gains made should inspire public confidence that change is on its way.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. The Author wishes to thank everyone who provided insight for this article but any errors or omissions are solely those of the Author’s.