new global economic powers and the environment dr. peter bosshard policy director, international...
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New Global Economic Powers and the Environment
Dr. Peter Bosshard
Policy Director, International Rivers
Beijing, April 18, 2011
International Rivers
For 25 years, mission to protect rivers and communities
Offices in the US, Brazil, India, Thailand, Africa
Work to support local NGOs, improve decision-making, find sustainable solutions
Global Dam Building Today
• Western companies no longer #1: Sinohydro with
50% of the global market?
• Chinese companies with more than 250 projects in
68 countries
• New dam builders from Brazil, India, Thailand,
Iran, Russia and Vietnam
Example for new economic South-South cooperation
A New Era of South-South Cooperation
• South-South trade “the most dynamic segment of
world trade”
• South-South investment growing faster than other
investment flows
• Southern companies have become dominant
actors across the developing world
Outline of Presentation
• Some trends and figures
• Benefits and risks of the new South-South
cooperation
• Emerging guidelines on enterprises and the
environment
• Remaining challenges
Some Trends and Figures
Motives of New South-South Cooperation
• Southern companies have acquired the technology to
compete globally
• Search for new markets in other developing countries
• Efforts to access natural resources
• Global integration of production
Growth in South-South Trade
• 46% of all developing country exports goes to
other developing countries (2006)
• South-South trade makes up 17% of all global
trade (2006 – 3x more than in 1996)
Financial Flows Follow Trade
• Leading role of export credit agencies, but Southern
commercial banks also expanding around the world
• Financial Times : in 2009-10, loans from China
Exim Bank and CDB ($110 billion) bigger than
World Bank Group ($100 billion)
Developing Country Foreign Investment
Increase from $1 billion (1984) to $229 billion (2009)
China: increase from $1 billion (2000) to $48 billion (2009)
Box: foreign investment from Brazil, China, India (stock)
Southern Transnational Corporations
• UNCTAD: 28% of the world’s 82,000 TNCs
from the South
• Forbes: 18 of the top-100 TNCs are from the
South
Benefits and Risks
Benefits
• Increased demand for natural resources has
boosted economic growth in Africa
• Investment in infrastructure helps achieve long-
term development
• New trade and investment partners reduce
political dependence on Northern governments
Risks
• New investment has a strong focus on
environmentally sensitive sectors (oil and gas,
mining, timber, hydropower etc.)
• Late comers on the global market look for new
places to invest – often in environmentally
sensitive regions
Guidelines for foreign investors
Early International Guidelines
Since the 1980s, social and environmental guidelines
by World Bank Group, OECD etc.
Interference with national sovereignty? But many host
countries don‘t have strong legal framework. And
investors have a self-interest in avoiding social and
environmental problems.
Shared Global Standards
• Convention on Biological Diversity
• Agenda 21, UNEP Finance Initiative
• World Bank safeguard policies
• Equator Principles for project finance
Business and Human Rights
“Protect, Respect and Remedy” framework: adopted
by UN Human Rights Council in 2008, Guiding
Principles discussed in June 2011.
Requires policy commitment and due diligence
procedures for enterprises, including “meaningful
consultation” with stakeholders
Outlook
Remaining Challenges
Progress has been made, but challenges remain:
• Guidelines need to be adopted and implemented in
practice
• More attention on small and medium companies
• Need for more transparency („sunshine is the best
antiseptic“)
Concluding Statement
“TNCs need to do more to factor in the
development dimension and the public interest
in their decision-making, and to find the right
balance between the ‘bottom line’ of business
shareholders and the ‘bottom line’ of
development stakeholders.” (UNCTAD 2010)
Thank you!
Peter Bosshard
Policy Director
International Rivers
(m) 152 1035 3542
(o) +1 510 848 1155