FGG MD ToC 2: Improved Trade and Investment

FGG’s goal is to ensure that trade and investment advances socially just, inclusive and environmentally sustainable development. Like Minister Ploumen, we believe that trade and investment can contribute significantly to economic opportunity and equality. But the current global trade and investment regime has helped create and exacerbate governance gaps that adversely affect society, expanding the rights of corporations while diminishing the policy options available to governments. Policies promoting trade and investment have overlooked the potentiality of negative impacts, putting them at odds with commitments on policy coherence for development (PCD). There is an urgent need to close these governance gaps and to increase policy coherence in general. We believe that this will redress the imbalance between the rights and obligations of corporations and the regulatory space available to governments to fulfil environmental and social objectives, including increased gender equality and respect for human rights. Redressing this imbalance is essential in achieving socially just, inclusive, and environmentally sustainable societies. As the Minister has stated in her policy agenda, the market is not perfect. We believe that governments must be able to regulate in society’s interest. Governments have an obligation to assess the impacts of their policies and take action or refrain from introducing a policy when there is significant risk or evidence of negative impacts. However over the course of the last two decades there has been a trend for governments to sign up to bilateral and multilateral trade and investment agreements that restrict their ability to implement policies that stimulate inclusive and sustainable growth, and create incentives for them to cast aside their obligations to citizens. In addition, existing policies on energy sourcing and financing constrain the space within which more socially just, inclusive and environmentally sustainable energy systems could emerge. This dynamic is aggravated by the inclusion of investor-state dispute settlement (ISDS) mechanisms in many agreements. These enable companies to sue governments for pursuing policies that may adversely affect future profits. Fierce competition for investment between countries further aggravates these problems, exerting downward pressure on wages and the price of natural resources. There is increasing interest, including in the Netherlands and the EU, in new approaches to trade and investment where benefits are shared more equally. The Netherlands is a key actor in the global debates on trade and investment and Policy Coherence for Development, and has set a trend that has been followed by many donor countries and international institutions. We believe that the government’s willingness to tolerate dissent and sustain dialogue with representatives of civil society around the world can lead to transformative change. Besides specific trade and investment policies, also policies related to agriculture and food security, energy and climate, raw materials use, transport and infrastructure, biodiversity and other areas, can have a significant impact on trade and investment flows and therefore on inclusive and sustainable development and on people in Low- and Lower-Middle Income Countries (LLMICs). Oftentimes, these links are overlooked. In order to achieve policy coherence for development, FGG will carry out joint analyses with partners looking at how key public policies drive investment towards or away from sustainable and inclusive food and energy systems, and a respectful relationship with the environment. Based on these analyses, which will include descriptions of new or existing alternative models, FGG and its Southern partners will develop a joint strategy to influence relevant policies. Satisfying global energy needs through fossil fuel extraction, including fracking, large-scale hydropower projects, nuclear energy, and industrial agriculture (such as flex crops and industrial tree plantations), constitutes one of the main sources of greenhouse gas emissions. It also generates unsustainable solutions that promote exclusion and increase people’s vulnerabilities. FGG focuses on demonstrating how existing policies on energy sourcing and financing (in both the North and the South) prevent more socially just, inclusive and environmentally sustainable energy systems emerging. At the same time they facilitate resource grabbing and extend corporate control over energy production. Our work creates options for the pursuit of models that represent real solutions to climate change, and that move forward, in a socially just way, toward the phasing out of fossil fuels. This dossier includes policies that are directly or indirectly related to climate and energy policies, such as policies on public energy provision and subsidies, financing and foreign direct investment, transport, infrastructure and growth corridors, extractives, agriculture, biodiversity, mining and raw materials production and use. FGG will strive to improve existing policies regulating activity around climate and energy, by strengthening community driven innovations aimed at providing for local energy needs and bringing lessons learned into policy discussions and interventions in key decision making spaces including UN Framework Convention on Climate Change (UNFCCC) and within EU institutions.