Submission to the UN Working Group on Business and Human Rights for its report on Investors, Environmental, Social and Governance and Human Rights
South Centre
October 2023
The South Centre has contributed to an upcoming report by the UN Working Group on Business and Human Rights on Investors, Environmental, Social and Governance and Human Rights which will be presented to the Human Rights Council at its 56th Session in 2024. Greater uptake in ESG reporting must be accompanied by mandatory corporate due diligence, accountability & remedies.
Foreign Investment Flows in a Shifting Geoeconomic Landscape
By Danish
The economic shocks from the pandemic and rising geoeconomic tensions have triggered an accelerated restructuring of foreign investment flows in global value chains. As the previous determinants of foreign investment are rapidly changing, many new risks and opportunities abound for developing countries looking to attract FDI into their economies. This paper therefore looks at some of the important issues affecting foreign investment flows to developing countries both now and in the future. It then lays out some policy imperatives which can help countries ensure that the inbound foreign investment is responsible, sustainable and contributes to achieving the national development priorities.
The Right to Development: Principles, Realization and Challenges
By H.E. Mr. Ali Bahreini
The main theme of the 54th session of the Human Rights Council revolves around economic, social, and cultural rights, with a particular focus on the right to development. This article addresses the importance of the right to development, the Iranian perspective on it, and the impact of various challenges on its full and effective realization.
Promoting Jordan’s Use of Compulsory Licensing During the Pandemic
By Laila Barqawi
This paper addresses the difficulties in utilizing Article 31 bis of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) on compulsory licensing for the export of pharmaceuticals during the pandemic through the case study of Jordan. This paper also recommends that Jordanian officials seek to capitalize on the pandemic whilst the Jordanian Defense Law and Orders are in effect to include Emergency Use Authorization (EUA) as a direct ground for applying compulsory licensing, introduce clauses similar to those introduced by countries who have signed FTAs with the US, as well as deactivate harmful clauses within its national laws that prevent the application and utilization of a compulsory license. Further, Jordanian officials should seek the opportunity, considering the change of stance of the Biden administration towards compulsory licensing, to re-negotiate favourable terms in the Jordanian – US Free Trade Agreement (JUSFTA). Moreover, Jordanian officials should also form a syndicate that calls for the overhauling of TRIPS at Article 31 bis when an EUA is invoked in any country.
Least Developed Countries and Their Progress on the Sustainable Development Goals
By Peter Lunenborg
This Research Paper reviews Least Developed Countries’ (LDCs) collective progress on the implementation of the Sustainable Development Goals (SDGs), based on the available data on the indicators for the 169 SDG targets. It makes recommendations for LDCs and other States to consider advancing in relevant UN processes as well as the WTO’s.
LDCs made progress on 28% of the SDGs. This collective progress shows that these countries are far from achieving what were deemed achievable goals in 2015. With respect to trade-related SDGs, LDCs have not made progress on any of the five trade-related SDGs that mention LDCs specifically.
This paper does not delve into the causes of this gap, but it suggests that international cooperation and, particularly, the developed countries’ assistance, has been insufficient to address the needs of a large part of the world population that still lives in poverty and without hope of a better future. However, the Doha Programme of Action (DPoA), a development framework with targets specifically for LDCs -which overlap with SDG targets- appears to dilute several original SDG targets, in particular those in SDG 17 (Partnerships for the Goals).
Value Addition or Trade Misinvoicing: Coal Trading in the Asia-Pacific
By Manuel F. Montes and Peter Lunenborg
Statistics on coal trade between India, Singapore and Indonesia suggest that trade misinvoicing is used as a vehicle for illicit financial flows. At present this practice is not well addressed by the Organisation for Economic Co-operation and Development’s tax standards. Asia-Pacific countries should intensify cooperation on this issue. Other international organizations with a mandate in this area could also play a role, for instance the World Trade Organization. Ultimately, increased cooperation would help to achieve Sustainable Development Goal 16.4 which inter alia aims, by 2030, to significantly reduce illicit financial flows.
The 1944 “Bretton Woods Agreement” gave birth to the new international financial system marked by the centrality of the US dollar which is a crucial pillar of the global power of the United States. Over the past eight decades, the asymmetry of the shrinking US economic weight in the world economy and growing dominant role of the dollar has become more and more glaring. The disadvantages of overreliance on the dollar have been keenly felt, especially by developing countries. The recent moves to weaponize the dollar and the payment clearance system have triggered another wave of reassessment by national states and enterprises of the role of the dollar and led to the hitherto most broad-based de-dollarization process covering from Southeast Asia to Latin America and the Middle East. De-dollarization has been incrementally taking place in different forms and led by BRICS and some commodity exporting countries. However, there are many challenges to meaningful de-dollarization. Overall, de-dollarization efforts, despite important progress, have been limited and partial. There has been progress in reducing overreliance on the dollar through foreign exchange reserve diversification and trade invoicing as evidenced by the decline in the dollar’s share of allocated foreign exchange reserves and the increase of trade invoiced and transacted in currencies other than the dollar. However, on aspects requiring the deep financial market and wide network such as foreign exchange transactions, issuance of debt and payment clearance, the dollar’s share has not suffered a decline. To reform the international financial system, the BRICS in particular should continue to take the lead in furthering the de-dollarization efforts.
The GloBE Rules: Challenges for Developing Countries and Smart Policy Options to Protect Their Tax Base
By Emmanuel Eze, Sol Picciotto, Muhammad Ashfaq Ahmed, Abdul Muheet Chowdhary, Bob Michel and Tommaso Faccio
The OECD global minimum tax of 15%, known as the Global Anti-Base Erosion (GloBE) Rules, have meant that developing countries need to consider what policy responses to take to ensure they collect the minimum tax and not cede it to developed countries. One option being promoted by the OECD is the “Qualified Domestic Minimum Top Up Tax” (QDMTT), with the claim that it will help developing countries collect the minimum tax of 15%. This Policy Brief points out that under the QDMTT MNEs can still pay zero taxes, it does not guarantee tax collection, it is complex to administer, it curtails national sovereignty in the form of the “peer review” mechanism and it is relevant mainly for tax havens which are destinations of profit shifting. The Brief then outlines policy options relevant for developing countries, namely Alternative Minimum Taxes (AMTs) and reform of tax incentives.
The 1944 “Bretton Woods Agreement” gave birth to the new international financial system marked by the centrality of the US dollar which is a crucial pillar of the global power of the United States. Over the past eight decades, the asymmetry of the shrinking US economic weight in the world economy and growing dominant role of the dollar has become more and more glaring. The disadvantages of overreliance on the dollar have been keenly felt, especially by developing countries. The recent moves to weaponize the dollar and the payment clearance system have triggered another wave of reassessment by national states and enterprises of the role of the dollar and led to the hitherto most broad-based de-dollarization process covering from Southeast Asia to Latin America and the Middle East. De-dollarization has been incrementally taking place in different forms and led by BRICS and some commodity exporting countries. However, there are many challenges to meaningful de-dollarization. Overall, de-dollarization efforts, despite important progress, have been limited and partial. There has been progress in reducing overreliance on the dollar through foreign exchange reserve diversification and trade invoicing as evidenced by the decline in the dollar’s share of allocated foreign exchange reserves and the increase of trade invoiced and transacted in currencies other than the dollar. However, on aspects requiring the deep financial market and wide network such as foreign exchange transactions, issuance of debt and payment clearance, the dollar’s share has not suffered a decline. To reform the international financial system, the BRICS in particular should continue to take the lead in furthering the de-dollarization efforts.
COVID-19, Future Pandemics and the Africa Care Economy Index
By Salimah Valiani
In Africa, the care economy has long been unrecognised. At least since the last major pandemic in Africa, HIV-AIDS, caring work has been severely undervalued in the continent, and the redistribution of caring work, from females in the home and communities, is next to nonexistent. Undoing this structural inequality is crucial to improve health and wellbeing of girls and women in Africa, to be prepared for future pandemics, and to realise Africa’s demographic dividend for the benefit of the majority. To achieve this, the Africa Care Economy Index is offered as a policy, advocacy, and accountability tool.
