Business and Human Rights Forum a Step Backward

Published on December 6, 2013

USCIB and two of the global business groups with which we are affiliated – the International Organization of Employers(IOE) and the International Chamber of Commerce (ICC) – represented business at the second annual United Nations Forum on Business and Human Rights, December 2-4 in Geneva. A number of USCIB member companies also attended, including BP, Chevron, GE, Google, Hess, Microsoft, Nestlé and Procter & Gamble.

The annual UN forum is designed to bring business, government, civil society and other stakeholders together to discuss the status, opportunities and challenges of implementing the UN Guiding Principles on Business and Human Rights.

According to Adam Greene, USCIB’s vice president for labor affairs and corporate responsibility, this year’s discussion was much more negative and critical towards business. The consensus developed by John Ruggie, the former UN special representative for business and human rights, during his mandate is fraying and may collapse if left unaddressed.

In addition, the obligation of governments, under the UN Guiding Principles, to protect human rights continues to be minimized, with nearly all of the attention focused on companies’ concomitant responsibility to respect human rights.

The forum concluded with a number of statements that the UN Guiding Principles have not worked and that the UN should develop a legally binding treaty on multinational enterprises. The government of Ecuador plans to organize a meeting to push this proposal forward at the next meeting of the UN Human Rights Council.

Read more in the IOE news release on the forum.

Staff contact: Adam Greene

More on USCIB’s Corporate Responsibility Committee

At OECD Forum USCIB Spotlights Prerequisites for Green Investments

Published on December 6, 2013

USCIB’s Norine Kennedy addresses the OECD green growth forum.

Norine Kennedy, USCIB’s vice president for energy, environment and strategic international engagement, took part in the OECD Green Growth and Sustainable Development Forum on December 5-6 in Paris. Representing the Business and Industry Advisory Committee to the OECD (BIAC), she spoke on a panel on “Unlocking Private Sector Investment in Green Growth.”

Kennedy highlighted the importance of providing enabling frameworks and policies that work in synergy with trade and investment rules. “Policies to green economic activity have to emphasize multilateral approaches, and function in globalized markets to enable business to deliver the full potential of innovation and economic prosperity,” she said.

The BIAC delegation also updated the forum on the International Business Green Economies Dialogue
(GED) initiative, indicating its ongoing work to provide business views and foster thoughtful discussion of how to design greener economic policy approaches into the UN Post 2015 Development Agenda and SDGs. GED Chair Brian Flannery led a discussion on supporting investment in clean energy infrastructure, in which both government and private sector speakers considered the synergies between public-private sector partnerships, overseas development assistance and regulatory and market signals. (Click here to see slides from Flannery’s presentation.)

The overarching theme of this year’s GGSD Forum is encouraging and leveraging private investment for green infrastructure and technologies, including innovation policies. BIAC has worked with the OECD Green Growth project since it’s inception, engaging on the broad range of themes that this horizontal program encompasses, such as green taxes, green jobs, green procurement and green technologies.”

Staff contact: Norine Kennedy

More on USCIB’s Environment Committee

WTO Deal in Bali Would Unleash Benefits For All Business Tells Ministers

Published on December 3, 2013

WTO Director General Roberto Azevedo described the role of the business community in pushing for a deal as absolutely critical.

The business community is putting pressure on World Trade Organization members to seal a trade facilitation deal at this week’s WTO ministerial in Bali, Indonesia.

Speaking to a high-level meeting today between business and ministers in Bali, Victor K. Fung, chairman of the ICC World Trade Agenda initiative, urged business to continue pressing their governments to conclude an agreement on trade facilitation in the next three days.

At the same time, ICC Chairman Terry McGraw, who also serves as USCIB’s chairman, and some 80 other global CEOs issued an open letter to governments, published in the Financial Times, emphasizing that a trade facilitation deal could boost global GDP by upwards of three percent.

Separately, McGraw joined UK Trade Minister Stephen Green in a joint op-ed
published by Reuters spelling out the potential benefits of a trade facilitation deal. “In addition to providing a major stimulus to the global economy, a deal would also reinforce the WTO’s central role in shaping the rules that govern world trade,” they wrote. “The challenges now facing global trade are formidable. Showing that the WTO can help by tackling them one by one — rather than in a mammoth undertaking — would be an important step forward and a model to build on.”

USCIB Senior Vice President Rob Mulligan is attending the Bali ministerial as part of the global business delegation to the talks. Last week, USCIB President and CEO Peter Robinson expressed disappointment that WTO members had failed to wrap up a Bali package before the ministerial. He urged ministers to “pick up the pieces and move forward as quickly as possible.”

At the Bali meeting, Fung said that sealing a deal on trade facilitation at the 9th WTO Ministerial, commencing today would benefit all countries by creating millions of jobs and laying the foundations of a level playing field for all countries to compete in world markets.

Fung and Gita Wirjawan, Indonesia’s trade minister, co-chaired the meeting organized by the International Chamber of Commerce (ICC) and the Indonesian trade ministry. Ministers and ambassadors from many key WTO member countries participated in the roundtable discussion.

“A trade facilitation deal would put multilateralism back on centre stage in the global quest for growth and prosperity,” Fung said. “For those of us who rely on the fairness, transparency and non-discriminatory nature of the multilateral system, a deal would be a victory for pragmatism and an important stride forward for creating a trading system that works for all. This is especially important for supporting the growth of small- and medium-sized enterprises and growth in the developing world.”

WTO Director General Roberto Azevedo told the gathering that a deal was in sight but would require political engagement and will at the highest level: “This is not a North-South divide and it is not a question of needing more time.” he said. “Either we get a deal done here, or we don’t.”

Azevedo described the role of the business community in pushing for a deal as absolutely critical. “In the last few weeks as momentum has picked up, governments began to pay more attention as businesses became more involved and people began to realize the importance of the package we have before us. Businesses saying that they want this deal, both in developed and developing countries, changed the environment in Geneva significantly and it can change the environment here too.”

A recent report commissioned by ICC has shown that the conclusion of a trade facilitation deal in Bali would generate annual world GDP increases of approximately $960 billion (U.S.) and would increase exports of developing countries by $570 billion. It would also create 21 million jobs, 18 million of which would be in developing economies.

From the President: Its Time to Clap with Both Hands on FDI

Published on December 1, 2013

U.S. officials say all the right things about inward investment. They must also support outbound FDI, which is critically important for U.S. exports, competitiveness and jobs.

By Peter M. Robinson

We were delighted when, in early November, the U.S. Department of Commerce spearheaded a very successful “Select USA Investment Summit” aimed at wooing overseas investors to our shores. But while it was truly heartening to have the Obama administration fully and publicly on board with a strong message that inward foreign direct investment (FDI) is good for the U.S. economy – for U.S. jobs, for our competitiveness, and for our communities – we could still do a lot more. The FDI glass is really only half-full in terms of administration policies, which seem to stress inward investment to the exclusion of outbound FDI by U.S.-based firms. We and the administration need to take a balanced approach to achieve the best results of this new push for FDI.

The Select USA Summit was a fantastic step in the right direction. It was great to have President Obama, Secretaries Pritzker, Kerry, Lew and Perez, plus U.S. Trade Representative Michael Froman and National Economic Council NEC ChairGene Sperling, all sounding a consistent pro-investment message. Leaders from USCIB member companies also spoke, including Andrew Liveris of Dow Chemical,Bill Simon of Wal-Mart USA, Joe Echevarria of Deloitte, Doug Oberhelman of Caterpillar, Bill Black of Fleishman-Hillard and others. They delivered a strong message, and we agree that the U.S. needs to jump into the fray at both the federal and sub-federal levels and compete to make America the most attractive global destination for FDI.

“Sayonara” to investment xenophobia

We are only eight years removed from the Dubai Ports World (DPI) debacle of 2005, when congressmen and senators from both parties sought to out-do each other in demonizing foreign investment in America’s infrastructure. The Bush administration seemed stuck in neutral, unable or unwilling to articulate coherent pro-investment policies. Some may even remember the anti-Japanese paranoia of the 1980s, fueled largely by xenophobia. We’ve come a long way from such narrow-minded thinking.

More encouraging, the real story today is outside Washington – in America’s states, cities, and towns, where inward FDI is planting new “greenfield” manufacturing and services enterprises, and reviving established companies, creating good jobs and fueling economic growth as well as tax revenues and new infrastructure. We are clearly on an FDI roll, and it’s great to have the administration both celebrating it and doubling down to hone America’s investment competitiveness.

But we’re clapping with just one hand. A careful reading of high-level speeches and conference documents from the Select USA Summit suggests an administration still too timid when it comes to outward investment by U.S.-based firms. In today’s globalized, supply chain-driven economy with competition sharper than ever, the feeling I get is that some in the administration and on Capitol Hill still seem trapped in the old, tired “outsourcing/exporting jobs” mindset. U.S. firms, large and small, need to have the option of investing abroad to bolster their global competitiveness and grow good jobs here at home.

Outbound FDI drives exports, jobs, R&D at home

Several recent studies (including from USCIB and from the Peterson Institute for International Economics) show that increased FDI abroad by U.S. firms correlates with increased exports, job creation, R&D expenditures, and tax revenues here at home. Investing abroad is good for the U.S. economy: it’s the only truly viable national strategy for U.S. competitiveness in today’s global economy, in which 90 percent of the world’s consumers and 75 percent of global GDP exist outside U.S. borders. Our businesses need access to local elements of supply chains, to service outlets close to markets, and to key inputs and natural resources. Not investing abroad would force U.S. companies to compete with one hand tied behind their back.

There are numerous ways in which companies and the administration can utilize and support outward FDI, the most effective being agreeing on high-standard bilateral investment treaties (BITs). Far-reaching and inclusive BITs, including one with China currently under negotiation, will provide the groundwork for strong trade in both directions. Shaking hands with our partners on these high-standard treaties – the sooner the better – will give America a big advantage in spurring growth and jobs.

Nostalgia for the “good old days” when U.S. business had no international competitors, when we could make everything in America and ship it to the world, is certainly understandable. But nostalgia can’t drive U.S. economic policy making. We need U.S. economic policies, led by the administration, attuned to today’s economic realities, including the growth of global value chains. These have to include strongly pro-FDI policies – for both inward and outward investment.

Let’s get everyone pulling in the same direction, for consistent pro-investment policies to help American companies and American workers compete around the world. Let’s start clapping with both hands on FDI!
Peter Robinson’s bio and contact information

Other recent postings from Peter Robinson:

Making Sure the Business Voice Is Heard in International Agencies (Fall 2013)

A Trade Policy Renaissance (Summer 2013)

The UN’s Development Agenda: Business Steps Up (Spring 2013)

A Network Like No Other (Winter 2012-2013)

OECD Holds Conflict Minerals Forum in Central Africa

Published on November 19, 2013

Panelists at the forum in Kigalai, Rwanda. “The biggest challenge continues to be the de facto embargo caused by Dodd-Frank," said USCIB's Adam Greene (far left). — Panelists at the forum in Kigalai, Rwanda. “The biggest challenge continues to be the de facto embargo caused by Dodd-Frank,” said USCIB’s Adam Greene (far left).

For the first time ever, the Organization for Economic Cooperation and Development (OECD) brought its leading multi-stakeholder initiative on conflict minerals to the affected region in Central Africa.

The 6th OECD Forum on Responsible Mineral Supply Chains, held jointly with the UN Group of Experts on the Democratic Republic of the Congo and the International Conference of the Great Lakes Region, met November 13-15 in Kigali, Rwanda to review how responsible sourcing is working in practice in the region. Adam Greene, USCIB’s vice president for labor and corporate responsibility, played an active role at the forum.

The OECD initiative has become the key international process on conflict minerals – bringing together all the relevant players, including the OECD member governments, all the governments of Central Africa, local and international civil society groups and business representatives from the entire mineral supply chain from mining straight through to end producer or retailer. Additionally, the OECD initiative has produced the only internationally recognized due diligence guidance on conflict minerals, as well as two more detailed guides: one on tin, tantalum and tungsten (3T), and another on gold.

Unintended consequences of Dodd-Frank law

Reflecting the influence of the OECD process on this issue, the European Commission has indicated that proposed EU legislation on conflict minerals will be based entirely on the OECD Due Diligence Guidance, in an effort to avoid the unintended consequences of Section 1502 of the U.S. Dodd-Frank Act.

“The OECD forum meeting in Kigali was an important opportunity to assess how the due diligence guidance was working in practice in the region, strengthen regional programs and review ongoing challenges,” Greene said. “The biggest challenge continues to be the de facto embargo caused by Dodd-Frank, which created enormous disincentives for any sourcing from the region.”

Rwanda, for example, has implemented a country-wide chain of custody program that fully conforms with the OECD due diligence guidance, yet producers in the country still cannot find buyers in European or North American markets, because Dodd-Frank imposes the same burden on all sourcing from the region, regardless of whether it is responsible sourcing or not.

USCIB is working actively with the Business and Industry Advisory Committee (BIAC) to the OECD and business groups from Central Africa to promote responsible sourcing of minerals and to create incentives for sourcing that could potentially off-set the disincentives created by Dodd-Frank.

A range of companies – including Boeing, Ford, GE, HP, Intel, Lockheed, Motorola Solutions, Northrop, Siemens, Texas Instruments and UTC – and numerous industry associations are participating in the OECD initiative. USCIB has played a key role in helping to coordinate business participation in the process, and Greene has been elected vice-chair of the initiative’s Multi-Stakeholder Steering Group.

Materials from the meeting in Kigali will be posted on the OECD due diligence guidance homepage (click here). The next OECD forum will be held in May 2014 at OECD headquarters in Paris.

Staff contacts: Adam Greene

More on USCIB’s Corporate Responsibility Committee

Employers Urge ILO to Support Migration Policies in Light of Labor Market Needs

Published on November 15, 2013

Employer delegates attending an International Labor Organization meeting in Geneva last week on labor migration called on the ILO to support a broad-based approach to migration that takes into account labor market needs.

The meeting was attended by experts from each of the ILO’s tripartite constituencies – governments, employers’ organizations and trade unions – who were joined by observers from UN agencies and international bodies including the International Organization for Migration. Employer representation in the ILO is organized via the International Organization of Employers.

Among the issues on the agenda was follow-up to last month’s UN High-Level Dialogue on Migration and Development and ongoing work on a Post-2015 Development Agenda, in particular challenges and opportunities for the ILO. The meeting also addressed the effective protection of migrant workers, sound labor market needs assessment and skills recognition, and cooperation and social dialogue for well-governed labor migration and mobility.

“Demographic realities and business needs increase the need for greater labor mobility,” said Ellen Yost, a migration attorney with Fragomen, Del Rey, Bernsen & Loewy, told the meeting. “However, government policies around the world increasingly have the effect of restricting mobility. The employers’ group urges governments to recognize the importance of international labor mobility for economic growth, competitiveness and development and to adopt clearer, simpler and more consistent rules and procedures for easier cross-border movement of skills.”

Business Will Be at the Table in Lead-Up to Global Nutrition Conference

Published on November 15, 2013

USCIB is participating in preparatory meetings for the Second International Conference on Nutrition (ICN2), which will take place in the fall of 2014, at the UN Food and Agriculture Organization’s headquarters in Rome. The conference will be convened by FAO and the World Health Organization. Helen Medina, USCIB’s senior director for product policy and innovation, sends along the following report from the field.

During the meetings, delegates discussed the lessons learned from implementing nutrition-enhancing policies for the food system, economic development and poverty alleviation. They further debated which policies should be implemented to advance nutrition goals and address challenges such as malnutrition, “over-nutrition,” and non-communicable diseases – including those related to obesity – that are impacting countries at various stages of development.

Medina and other business representatives have met with government delegates from Brazil, Canada, Germany, Netherlands, the United Kingdom and the United States, as well as with David Nabarro, the UN’s special representative on food security. The core business message underscores the private sector’s know-how in the areas of innovation, science and technology, as well as good production and management practices. This expertise can increasingly be harnessed through effective partnerships with research institutions, farmers, policymakers and civil society.

Furthermore, the private sector plays a critical role in further strengthening markets, economic growth and livelihoods, Medina said. While private-sector involvement is key, there is also a need for government collaboration, particularly in helping ensure greater policy coherence, such as reducing barriers to trade.

Initially, USCIB and other business groups were only invited to the first two days of preparatory meetings, but not to the closing session, which takes place today. However, several government delegates and civil society representatives expressed concern at this decision, saying the meeting needed to be inclusive and transparent during the plenary sessions and the overall process.

Medina said many delegates, including those from the Netherlands and Germany, emphasized that a multi-stakeholder approach – including the private sector and civil society – is needed to deal with today’s nutrition challenges, and that these groups should not be excluded from any part of the ICN2 technical discussion or any further talks on the subject.

In response to this strong reaction from the member countries in support for all stakeholders to be included, FAO and WHO reversed their decision and announced Thursday evening that all stakeholders would be able to take part in final discussions to prepare for ICN2.

As business representatives got ready to deliver a statement to the final day of discussions, Medina said the private sector applauded the decision. She said business has worked throughout the meetings to press for ICN2 organizers to develop mechanisms for the private sector to work with other stakeholders to map out a “farm to fork food system,” and to identify ways the private sector can utilize its tools, capabilities and expertise to contribute to advancing global nutrition.

Medina reports that the conference concluded today with a commitment by the FAO and WHO to propose a roadmap leading to ICN2 in November 2014 that will be inclusive of all stakeholders.

Key Results

The Rome meeting, which had the overall goal of preparing for ICN2 next year, reaffirmed the following:

ICN2 participants will need to build a common vision for nutrition at all levels.

Building institutional capacity and building nutrition as a national priority across all government sectors is needed.

Better data is needed for better policy making.

Inserting the idea of better nutrition along the value chain is important.

Aligning nutrition priorities with the priorities of a government’s food and agriculture system is key.

Steps that can be taken at the national and local level include:

Experimenting with different approaches to finding solutions.

Government should put emphasis on small scale projects that can be scaled up.

Outcomes of the meeting:

Member states have requested that they be more involved in the ICN2 process going forward.

In the next several weeks, the WHO/FAO will produce a “road map” for the process going forward.

The preparatory meeting did not fully review all the information that has been generated on the topic of nutrition.

The ICN2 process needs to take into account all stakeholders including the private sector and civil society.

Staff contact: Helen Medina

More on USCIB’s Food and Agriculture Committee

More on USCIB’s Health Care Working Group

A Business Perspective on Investment Incentives

Published on November 15, 2013

USCIB’s Shaun Donnelly, who spoke at a Columbia University conference on international investment, here briefs foreign journalists on the transatlantic trade talks.

USCIB Vice President Shaun Donnelly was one of just a few business panelists at the annual conference of the Vale Columbia Center on Sustainable International Investment, which took place November 13-14 in New York. The annual Columbia University conference has become a major gathering place for investment policy experts.

According to Donnelly, the roster of speakers at this year’s conference “was again tilted toward academics, NGOs and government officials – some, unfortunately, with noticeable anti-business biases when it comes to foreign investment policy issues.”

The topic this this year was “Investment Incentives: The Good, the Bad and the Ugly – Assessing the Costs, Benefits and Options for Policy Reform.” On the opening panel, Donnelly delivered a message on the important role FDI, both inward and outbound, can play in a country’s (or a state’s) strategy for economic development and job creation.

“Well-targeted incentives can help attract sought-after investors and bolster national competitiveness,” Donnelly said. “Not all investment incentives are good or accomplish their objectives but, similarly, not all incentives are somehow, as some critics charge, wasteful or an abuse of scarce taxpayer funds.”

Donnelly’s said investment incentives tend to be overrated as a driver of investment location decisions. “Internationally, major U.S. businesses’ investment decisions are generally driven far more by market realities, location, sound economic policies, rule of law, and political stability than by the size of an incentive package.”

Several business representatives in the audience commended Donnelly afterward for scoring at least a few points for the business team in FDI policy discussions.

State of play in the U.S.-EU negotiations

While in New York, Donnelly also met with a number of foreign journalists on the business community’s outlook on the Transatlantic Trade and Investment Partnership negotiations, in a program organized with the State Department’s New York Foreign Press Center. Click here to read a transcript.

With tariffs between the United States and the European Union already relatively low, discussion centered on non-tariff barriers, regulatory cooperation and conditions for investment. Donnelly said American business hoped that trade and investment liberalization via the TTIP, as well as the Trans-Pacific Partnership, would provide a much-needed spur to liberalization at the global level via the World Trade Organization.

Donnelly also called out regulatory cooperation as an area of potentially large gains for businesses on both sides of the Atlantic, identifying auto safety standards and chemicals regulation as examples of areas where commonly agreed or mutually recognized standards could significantly ease cross-border business between the world’s two largest economies.

Staff contacts: Shaun Donnelly

More on USCIB’s Trade and Investment Committee

Business Gives Last Push to Seal Bali Deal and Salvage Doha Round

Published on November 12, 2013

(Click here to enlarge this infographic)

A prime opportunity to further liberalize multilateral trade presents itself next month when ministers from 159 countries converge at the 9th Ministerial Conference of the World Trade Organization in Bali.

In the home stretch to the crucial negotiations, the International Chamber of Commerce is urging all WTO members to seal a trade facilitation deal that would contribute to economic growth and job creation by simplifying administrative procedures and standards that dictate how goods cross borders or how they are handled in customs.

The conclusion of a WTO agreement on trade facilitation at the 9th WTO Ministerial Conference in Bali is one of five business recommendations put forward by business through the ICC Business World Trade Agenda (WTA) initiative launched in March 2011. The initiative set out to consult CEOs and senior executives in all major regions of the world in a bid to outline priorities for a practical and forward-looking trade policy agenda.

“Moving forward with the WTO’s trade facilitation agreement should be a top priority given the substantial potential benefits,” said ICC Chairman Terry McGraw, chairman of McGraw Hill Financial [now S&P Global] and also chairman of USCIB. “After years of stalemate on the global trade agenda, there is now a real opportunity to achieve a meaningful result that increases market access and creates openings that unleash more opportunities for higher growth throughout the world.”

USCIB Senior Vice President Rob Mulligan will be among the ICC and other business representatives attending the Bali ministerial.

ICC has called on WTO members to show political will at the highest levels to reach an agreement on trade facilitation and to make commitments and compromises that recognize the common interest in success and the collective cost of failure.

One ICC study has found that reaching an agreement on trade facilitation could not only boost global gross domestic product by $960 billion (U.S.) but also increase exports of developing countries by $570 billion and of developed countries by $475 billion. A further benefit would be the associated creation of 21 million jobs, 18 million of which would be in developing economies.

ICC Launches Research Papers on Innovation and Intellectual Property

Published on October 31, 2013

The International Chamber of Commerce unveiled the first in a series of research papers on the interface between innovation and intellectual property (IP) today at a conference in Brazil co-organized by ICC and the Brazilian National Confederation of Industry (CNI).

The series of five research papers will provide insights on how IP interacts with decisions, transactions and processes related to technology development and dissemination.

Daphne Yong-d’Herve, chief intellectual property officer at ICC, said the research project aims to contribute to a better and more concrete understanding of the innovation-IP interface. “An improved understanding of how IP is actually used in innovative processes will help inform discussions taking place today among governments, businesses and other stakeholders on how to design frameworks and measures that will help stimulate innovation and growth,” she said.

The first paper, “Enhancing IP Management and Appropriation by Innovative SMEs,” addresses how innovative small- and medium-sized enterprises (SMEs) can improve their performance through better management of their intellectual assets.

Further papers will explore issues relating to: innovation and knowledge exchange through global networks and partnerships, the evolving geography of innovation, IP in innovation for non-commercial purposes, and diffusion channels for technology and know-how.