Australian Financial Review – April 28, 2015
The Obama administration is pressuring the government of Australian Prime Minister Tony Abbott to back away from plans to target American technology multinationals with higher taxes in next month’s federal budget. USCIB’s Carol Doran Klein is quoted.
USCIB members and government officials gathered in Washington, D.C. on April 15 and 17 for meetings on human rights, labor policy and corporate social responsibility. USCIB’s Corporate Responsibility Committee and Labor & Employment Policy Committee met to discuss business priorities through 2015 at Baker & McKenzie’s offices in Washington.
Laura Chapman Rubbo (Walt Disney) chaired the Corporate Responsibility Committee meeting on April 15, while Ed Potter (Coca-Cola) chaired his last Labor & Employment Policy Committee meeting before retiring this summer. USCIB members and staff honored Potter for his three decades of service representing American business at the International Labor Organization.
At the Corporate Responsibility Committee meeting, members reviewed work on human rights metrics for businesses, ongoing efforts on corporate responsibility reporting in various international forums, and received updates on the United Nations Sustainable Development Goals as they relate to corporate responsibility, as well as progress on the United States National Action Plan (NAP) on responsible business conduct, consistent with the UN Guiding Principles on Business and Human Rights. Members also attended a stakeholder dialogue on April 16 on the U.S. NAP, to which USCIB provided comments.
On April 17, USCIB members and staff toasted Potter’s last Labor & Employer Policy Committee meeting. During the meeting attendees discussed the 2015 ILO conference, updates on forced labor and human trafficking laws and further updates on the UN guiding principles. Members also heard from Sarah Fox, special representative for International Labor Affairs at the U.S. Department of State, who discussed priorities for business and her unique role focused on labor issues outside of the Department of Labor. She briefed members on the coordination of labor issues across government agencies, and specifically discussed their work on the labor chapter of the Trans-Pacific Partnership (TPP).
USCIB’s Labor and Corporate Responsibility committees will reconvene in October.
USCIB represented the Global Business Alliance at a stakeholder dialogue at the United Nations about the Post-2015 Development Agenda negotiations on April 24 at the UN headquarters in New York.
Ariel Meyerstein, USCIB’s vice president for labor affairs, corporate responsibility and corporate governance, made the case for greater private sector engagement in the UN’s Sustainable Development Goals, and particularly on Financing for Development, aimed at mobilizing private capital to support international development.
“The private sector stands willing to help move us from ‘billions to trillions’ in development and be the partner in sustainable development the global community needs in the post-2015 development era,” Meyerstein said during the stakeholder meeting in the lead-up to the UN’s Third International Conference on Financing for Development in July. The purpose of the meeting was to involve stakeholders, including civil society representatives and the business sector, in efforts to coordinate between the Financing for Development negotiations and the Sustainable Development Goal negotiations, which are proceeding along separate tracks. The session also canvassed views on the calls since Rio+20 and most recently by the Secretary-General and others for a technology transfer facilitation mechanism, which is currently contemplated in the Zero Draft of the Financing for Development Outcome Document and reflected in the Means of Implementation for the Sustainable Development Goals (Goal 17.6).
Meyerstein reminded delegates that the Global Business Alliance has placed special emphasis on the UN’s goals on governance, inclusive economic growth, and infrastructure and innovation. He noted that polices that foster open trade, intellectual property rights protection and enabling frameworks for investment are necessary for achieving the technology transfer needed for development. Governance frameworks that support innovation are also critical.
“Indeed, a focus on governance and capacity-building at all levels, including through transparent and inclusive national multi-stakeholder engagement, will help catalyze, coordinate and amplify the impacts of all resource streams and help direct them in ways that will leave no one behind,” Meyerstein said. “The good thing about governance is that Member States don’t need to wait for July or September to get started.”
View Meyerstein’s intervention on UN Web TV (~2:01:00).
Read USCIB’s SDG Priority Papers:
USCIB staff made a strong business case for the Trans-Atlantic Trade and Investment Partnership (TTIP) this week at policy conferences in Washington, D.C. and New York. TTIP is a proposed trade agreement between the United States and the European Union, expected to spur economic growth and create jobs on both sides of the Atlantic. The U.S. made promising progress on its trade agenda last week with the introduction in Congress of Trade Promotion Authority, legislation that makes it easier for the U.S. to negotiate and implement trade agreements like TTIP.
In New York on April 23, Norine Kennedy, USCIB’s vice president for strategic international engagement, energy and the environment, gave a presentation at a TTIP stakeholders forum titled “Environment, the UN Post 2015 Development Agenda and SDGs: Synergies for TTIP, Trade and Business.” She noted that the U.S-EU trade agreement plays an integral role in the global economic infrastructure being built in 2015, which will be indispensible to international cooperation on sustainable development and shared prosperity embodied in the United Nations Post 2015 Development Agenda, currently under discussion at the UN this week.
“Successful implementation relies on ambitious and wide mobilization of resources, both financial and technical,” Kennedy said. “A significant share of this mobilization will come from the private sector, and trade and investment are among the main ways that this mobilization will occur.”
She explained that USCIB and its member companies strongly support a successful TTIP conclusion, as that trade agreement will facilitate business’s contributions to sustainable development.
And on April 22, USCIB’s Vice President for Investment and Financial Services Shaun Donnelly spoke at a panel on Transatlantic Energy Issues during a day-long seminar in Washington, D.C. organized by George Mason University and Johns Hopkins University’s School of Advanced International Studies. Donnelly talked about the relevance of energy issues in TTIP, noting that energy has not typically been a free-standing chapter or even an area of focus in U.S. or EU trade agreements.
“Negotiators would need to be creative and flexible if they want to use the TTIP to address fundamental energy policy issues,” Donnelly said.
USCIB made the case for TTIP this week as the Senate Finance Committee approved Trade Promotion Authority on April 22.
The International Chamber of Commerce (ICC) called on global business leaders to intensify discussions with G20 governments and to emphasize priorities for trade, investment and servicing small- and medium-sized enterprises (SME) to grow the economy and generate jobs.
ICC Chairman Terry McGraw addressed 350 global business leaders gathered in Washington D.C. for a special B20 plenary session co-hosted by the World Bank Group. In his keynote speech, McGraw urged fellow business leaders to step up the dialogue with the G20 and press for adoption of B20 recommendations on trade and investment and on stimulating the contribution of smaller businesses to the global economic recovery.
“We must remember that the G20 is a coalition of 20 individual member governments,” said McGraw. “To ensure that governments hear and understand our priorities, we need to take a horizontal approach that addresses individual circumstances across the G20.
The high-level B20 plenary session featured interventions from IMF Managing Director Christine Lagarde, Word Bank Group President Jim Yong Kim, Deputy Prime Minister of Turkey Ali Babacan, and Rifat Hisarciklioglu, chair of B20 Turkey. Lagarde, who has participated in B20 meetings annually since 2011, when the G20 was held in France, reiterated the importance of business contributions to the G20 agenda and called for “continuing dialogue between the B’s [B20] and the G’s [G20].”
Babacan emphasized the importance of business engagement in the G20 process. “Governments alone cannot create growth or employment. No matter how much you increase government spending, no matter how much central banks go through a monetary expansion process, if the private sector is not onboard it is not realistic to expect sustainable growth, it is not realistic to expect real job creation. So B20 is very important for us and business involvement in our G20 agenda is of utmost importance,” he said.
The B20 plenary was preceded by the inaugural meeting of the B20 International Business Advisory Council (IBAC) which is chaired by Muthar Kent, CEO and chairman of the Coca-Cola Company and comprises CEOs and business association heads from each of the G20 countries.
“The objectives of IBAC are to ramp up our communications with G20 government officials and to improve continuity between [G20] Summits,” said Kent. “I’m happy to be able to support Turkey’s Presidency of the G20 and B20 and to advance the economic reform agenda that will be critical to increasing global growth, growth in trade, growth in job creation and growth in inclusiveness.”
B20 Turkey also invited ICC to serve as its international secretariat for the IBAC, to be chaired by ICC Secretary General John Danilovich.
“ICC has had an historic responsibility to convey business priorities to national and intergovernmental officials for decades,” explained Danilovich. “Serving as the IBAC Secretariat is a natural extension of this role and draws upon our experience as strategic partner to the B20 since the Seoul Summit in 2010. Our job will be to ensure that business priorities are included in the deliberations of the G20, as a collective body for global economic governance and in national capitals.”
The B20 meetings in Washington also included breakout sessions for the six B20 policy task forces: Infrastructure and Investment, Trade, Employment, SMEs, Anti-Corruption, and Finance. The meetings were used to provide mid-point assessments of priorities across the task forces and to begin finalizing the recommendations that will be presented to G20 leaders in advance of the Antalya Summit in November.
ICC G20 CEO Advisory Group deputies met ahead of the Task Force meetings to align priorities and outline a strategy for ICC’s contributions to the 2015 B20 process. The ICC group comprises over forty CEOs from major multinational corporations from most of the G20 countries who are committed to sharing real world experience for the G20 growth agenda.
“The ICC group forms the ‘corporate core’ of the B20,” said ICC CEO Advisory Group Director Jeff Hardy. “The B stands for business and it’s important that we amplify the priorities of the companies that drive global trade, investment and employment.”
The 2015 G20 Leaders’ Summit will be held in Antalya on November 15-16.
The International Chamber of Commerce (ICC) has revised its DOCDEX rules, a dispute resolution mechanism specifically designed to address trade finance concerns. In addition to widening its scope to address any trade finance dispute, the new rules will also increase transparency and enhance time efficiency.
DOCDEX is a rapid, cost-effective, document-based procedure offering international bankers and traders a means to settle documentary instruments disputes – not only helping parties minimize the disruption caused by a dispute but also eliminating the need to settle the claim in court.
Decisions are reached by a panel of three independent and impartial experts, and later scrutinized by an ICC Banking Commission technical advisor. Crucially, decisions are non-binding unless both parties agree otherwise – freeing the independent experts from due process, and adding flexibility.
Daniel Schmand, head of trade finance and cash management corporates EMEA, Deutsche Bank and incoming Banking Commission Chair said: “Documentary disputes can severely impact, and often entirely halt, trade finance proceedings. And resolving them is not only a costly and lengthy process, it can also – if taken to court – irreparably damage relationships with trading partners.”
By quickly and inexpensively managing claims, DOCDEX helps minimize the disruption caused by a dispute – not only eliminating the need for protracted litigation, but also safe-guarding the partnerships that are so crucial to the banking and trade finance sectors.”
The recently revised rules – which come into force on 1 May 2015 – will significantly enhance the already advanced dispute resolution mechanism.
The revised rules will also enhance transparency – requiring ICC to publish redacted decisions in every DOCDEX case. Doing so will not only set a precedent for future cases, it will also allow ICC to analyze the panel of experts charged with forming a decision – ensuring they are both impartial and practitioners.
Finally, the 2015 revision provides that filings be made in electronic form – using standard templates available on the ICC website. While speed has always been a hallmark of the DOCDEX process – decisions are typically reached within 30 days of a claim – the change in format will help to streamline case administration and, therefore, further accelerate proceedings.
The ICC DOCDEX Rules and more information on how to use the service can be found at www.iccdocdex.org.
Senior representatives from two USCIB member firms were panelists at an April 20 joint meeting of the OECD and the World Bank Group on Investment Climate Reform in Washington. Keying off the OECD’s updating of its Policy Framework for Investment (PFI), a policy checklist for developing countries looking to attract more private Foreign Direct Investment (FDI), the seminar focused on ways the OECD and World Bank Group can cooperate to promote investment climate reform around the world.
USCIB and the Business and Industry Advisory Committee to the OECD (BIAC) have been active over the last 15 months as the ten year-old PFI has undergone a rigorous assessment and updating process. The OECD is on track to formally adopt the updated PFI at its annual ministerial in Paris in early June. The Bank Group and the OECD are strengthening their cooperation around the updated PFI as a tool to drive investment policy reform.
This week’s session included high level speakers from the OECD, World Bank, and U.S. government plus the Finnish and Myanmar co-chairs of the year-long PFI update process. The April 20 session included a panel of business representatives. Along with a Madagascar entrepreneur, USCIB members Kimberley Claman of Citigroup and Nicole Bivens Collinson of Sandler, Travis & Rosenberg P.A. spoke for the private sector. They laid out their perspectives on what international investors look for in assessing investments in developing countries. Their comments sparked a good exchange with other seminar participants, including USCIB staffers Shaun Donnelly, vice president for investment and financial services, and Eva Hampl director of investment, trade and financial services.
USCIB appreciates the contributions Claman and Bivens Collinson made to the PFI session at the bank this week as well as the contributions other members have made throughout the year-long review and update process on the PFI documents.
A small coastal tanker is hijacked by pirates in South East Asia every two weeks on average, a report from the International Chamber of Commerce (ICC) International Maritime Bureau (IMB) has revealed.
South East Asia accounts for 55 percent of the world’s 54 piracy and armed robbery incidents since the start of 2015.
After a steady drop in global piracy over the last few years, attacks rose 10 percent in the first quarter of 2015 on the same period of 2014.
Worldwide, pirates took 140 hostages in the first three months of 2015, three times as many as during the same period in 2014. A total of 13 seafarers were assaulted and three injured.
In West Africa, a hotspot for violent piracy, one man was killed in the hijacking of a fishing vessel off Ghana. Five crew members were kidnapped by Nigerian pirates in two separate incidents in addition to a small product tanker being reported hijacked.
IMB has recorded 23 ship hijackings in South East Asia since April 2014, with six taking place in the last three months. Most are carried out by armed gangs targeting small coastal tankers to steal their cargoes of fuel. Five tankers and an offshore tug have been hijacked in the first quarter.
“The frequency of these hijackings in South East Asia is an increasing cause for concern. There’s a risk that the attacks and violence could increase if left unabated,” said Pottengal Mukundan, director of IMB, which has been monitoring world piracy since 1991.
Malaysian authorities have detained one gang of hijackers now awaiting trial. IMB has commended this action and calls for a stronger, coordinated regional response to clamp down on piracy in South East Asian waters.
The country with the highest number of attacks is Indonesia, accounting for almost 40 percent of 2015 attacks, with two vessels hijacked and 19 vessels boarded. IMB reports that the overwhelming majority of incidents are low-level, opportunistic thefts, although the attackers here are usually armed with knives, machetes or guns.
With eight reports in the past three months alone, Vietnam has seen an increase in armed robbery incidents. More and more thieves are breaking into ships at anchor in and around Hai Phong and Vung Tau.
The IMB Piracy Report shows zero incidents for Somalia in the first quarter of 2015. However, it advises shipmasters to follow the industry’s Best Management Practices, as the threat of Somali piracy has not been totally eliminated.
USCIB joined over 60 business associations urging Congress to include investment protections, particularly investor-state dispute settlement (ISDS), in Trade Promotion Authority legislation, which was introduced last week.
ISDS, a legal instrument that allows investors to use dispute settlement proceedings against foreign governments, has been mischaracterized and politicized by trade opponents. USCIB and other business groups have advocated for strong investor protections in U.S. trade agreements, which promote greater opportunities for American businesses and workers in the global economy.
“ISDS is a strong enforcement tool that helps ensure that American businesses and their workers will be treated fairly overseas,” wrote USCIB and 61 other business organizations in a letter sent to Congress today. “This mechanism is an essential part of high-standard U.S. trade and investment agreements and should remain a high priority trade negotiating objective in the renewal of Trade Promotion Authority.”
The letter’s signatories represent millions of companies of all sizes from every major sector of the American economy. The letter notes that dispute settlement is necessary for protecting American companies’ foreign investments, and it points out that ISDS panels only enforce international commitments to which each country has voluntarily agreed; ISDS panels cannot overturn any country’s laws or regulations.
USCIB has been working with member companies and other trade associations to highlight the benefits of strong investor protections in TPA and in America’s on-going trade agreements, including the Trans-Atlantic Trade and Investment Partnership (TTIP) with the European Union, and the Trans-Pacific Partnership with Pacific-rim countries. USCIB also partnered with Bloomberg last week to convene a timely conference on the benefits of TPP, bringing together key players in the global trade and investment debate.
Last Thursday – a momentous day for trade, as the introduction of bipartisan Trade Promotion Authority (TPA) legislation in Congress sparked new life into ongoing trade negotiations – USCIB partnered with Bloomberg to convene a timely conference, “The Trans-Pacific Partnership: Setting New Rules for Trade in the 21st Century,” at the United States Institute of Peace in Washington, D.C.
Sponsored by Visa, and produced in partnership with Bloomberg Government, Bloomberg BNA and the National Foreign Trade Council, the conference brought together key players in the global trade debate, including U.S. Trade Representative Michael Froman, two key members of Congress and an array of trade experts from the U.S. and other TPP negotiating parties, the business community and other areas.
Reps. Pat Tiberi (R-OH) and Sandy Levin (D-MI) from the House Ways and Means Committee offered a spirited debate of some of the most contentious aspects of the TPP negotiations, including provisions to open up the Japanese market for U.S. auto and agricultural exports, investor-state dispute settlement, and the inclusion of labor and human rights benchmarks for U.S. trade partners.
Ambassador Froman, breaking away from key Senate Finance Committee hearings to brief conference participants on the latest developments. He said negotiators were in the “final innings” of the talks, but noted that “some games go into extra innings,” and that most of the most contentious issues are yet to be fully resolved. He said progress on Trade Promotion Authority would send a positive signal to America’s trading partners, and would be “a critical tool to move the trade agreement forward.”
USCIB Senior Vice President Rob Mulligan took part in a panel discussion of business priorities for the talks, which also featured former Florida Congressman Jim Bacchus, who now heads the global practice group at Greenberg Traurig and chairs the International Chamber of Commerce’s Trade and Investment Commission.
Mulligan observed that, with the growing use of global value chains by business to reach global markets, it is critical that TPP address impediments such as localization requirements, restrictions on cross-border trade and customs barriers that impede the smooth operational of global value chains.
Other conference panels looked at critical issues remaining in the talks, views from other TPP parties, and the broader international economic implications of a TPP agreement. Additional speakers included Under Secretary of State Cathy Novelli, New Zealand Ambassador to the United States Mike Moore (former director general of the World Trade Organization), and Phil Karsting, administrator of the U.S. Foreign Agricultural Service. A number of USCIB members took part in key panel discussions. (Click here for the full agenda and list of speakers.)
USCIB is on the steering committee of the U.S. Business Coalition for TPP, which is pressing for an ambitious and market-opening agreement that can set a high bar for future trade agreements in the region and around the world.