Investment

Policy Brief 126, 23 February 2024

Leveraging ESG for promoting Responsible Investment and Human Rights

 By Danish and Daniel Uribe

The growing integration of Environmental, Social, and Governance (ESG) principles into investment frameworks and corporate reporting reflects a heightened recognition of the interplay between business operations and human rights. This Policy Brief examines the evolution of ESG investing, particularly its role in promoting responsible investment and embedding human rights considerations throughout business practices and supply chains. While ESG frameworks hold promise for enhancing corporate accountability and sustainability, challenges persist in effectively linking ESG criteria with human rights standards. It also shows that disparities in ESG reporting criteria and methodologies, compounded by a lack of shared understanding, pose obstacles to meaningful engagement with human rights responsibilities. The Policy Brief also delineates between ESG investing and reporting, highlighting distinct objectives and practices. While ESG investing aims to mitigate financial risks associated with environmental, social, and governance factors, ESG reporting focuses on evaluating firms’ exposure to ESG risks. The Policy Brief underscores the limitations of ESG frameworks in identifying and preventing human rights impacts comprehensively, emphasising the need for complementary measures such as mandatory human rights due diligence. Finally, the paper considers the need for greater coherence and consistency in ESG frameworks to foster responsible investment, promote human rights, and advance sustainable development goals.

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Research Paper 185, 13 October 2023

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.

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SC Contribution – Call for Inputs by UN SR on HRs & Environment, 14 June 2023

Response to the Call for Inputs by the UN Special Rapporteur on human rights and the environment

Should the interests of foreign investors trump the human right to a clean,
healthy and sustainable environment
?”

South Centre

14 June 2023

To realize the right to clean, healthy & sustainable environment and reduce ISDS risks, States need to align their FDI policies with human rights, climate action and SDGs, including via reform of the international investment regime.

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SouthViews No. 246, 5 April 2023

Preserving Regulatory Space for Sustainable Development in Africa

By Roslyn Ng’eno

Investment has an important role for achieving sustainable development in developing countries. Although international investment agreements (IIAs) can serve as instruments to promote such objective, protection oriented IIAs have undermined the ability of States to regulate in the benefit of the community. Likewise large financial reparations imposed by arbitral tribunals have increased the threat of regulatory chill in the face of major global challenges. Strengthening the right to regulate of States and addressing regulatory chill are key matters to consider in the reform of IIAs and the international investment regime. 

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Documento de Investigación 167, 27 de octubre de 2022

Análisis de las intersecciones entre cambio climático y derechos humanos

Por Daniel Uribe Terán y Luis Fernando Rosales

Los efectos del cambio climático en la vida diaria de las personas amenazan el pleno disfrute de los derechos humanos. El Consejo de Derechos Humanos ha adoptado dos resoluciones históricas en las que se reconoce por un lado el derecho humano a un medio ambiente limpio, saludable y sostenible (Resolución 48/13), y se establece por otro el mandato de un Relator Especial sobre la promoción y la protección de los derechos humanos en el contexto del cambio climático (Resolución 48/14). Aun así, parece existir la necesidad de que la CMNUCC y la estructura de derechos humanos de las Naciones Unidas mantengan un diálogo más amplio a fin de dar con una respuesta coordinada y coherente al cambio climático y sus efectos sobre los derechos humanos.

En este documento de investigación se analizan las intersecciones de estos dos sistemas jurídicos. Para ello, se identifica el modo en que las negociaciones relativas al cambio climático y la estructura de derechos humanos pueden contribuir a fortalecer la cooperación internacional. También se reconoce la necesidad de un debate internacional de mayor calado acerca de las relaciones entre los derechos humanos y el cambio climático, coherente con los principios de equidad y las responsabilidades comunes pero diferenciadas del CMNUCC.

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Document de Recherche 167, 27 octobre 2022

Analyse des Intersections entre le Changement Climatique et les Droits de l’Homme

Par Daniel Uribe Teran et Luis Fernando Rosales

Les effets du réchauffement climatique sur la vie quotidienne des êtres humains menacent la pleine jouissance de leurs droits. Le Conseil des droits de l’homme a adopté deux résolutions d’une portée historique, qui reconnaissent le droit de l’homme à un environnement propre, sain et durable (résolution 48/13), et nomment un rapporteur spécial chargé de la promotion et de la protection des droits de l’homme dans le contexte du changement climatique (résolution 48/14). Toutefois, un dialogue plus large entre la Convention-cadre des Nations unies sur les changements climatiques (CCNUCC) et l’architecture de protection des droits de l’homme de l’ONU semble nécessaire en vue de parvenir à une réponse coordonnée et cohérente au réchauffement climatique et à ses effets sur les droits de l’homme.

Le présent document de recherche analyse les points de convergence entre ces deux mécanismes en mettant en avant de quelle manière les négociations sur le réchauffement climatique et l’architecture de protection des droits de l’homme peuvent contribuer à renforcer la coopération internationale. Il reconnaît également la nécessité de discussions plus approfondies au niveau international sur les liens entre droits de l’homme et réchauffement climatique, conformément aux principes d’équité et de responsabilités communes mais différenciées inclus dans la CCNUCC.

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Documento de Investigación 162, 11 de Agosto de 2022

El mecanismo multilateral permanente propuesto y su posible relación con el universo existente de solución de controversias entre inversionistas y estados

por Danish y Daniel Uribe

La opción de reforma del Mecanismo Multilateral Permanente (SMM) que se está debatiendo actualmente en el Grupo de Trabajo III (GTIII) de la Comisión de las Naciones Unidas para el Derecho Mercantil Internacional (CNUDMI) ha planteado una serie de importantes preocupaciones sistémicas para las reformas procesales de la solución de controversias entre inversionistas y Estados. El presente documento trata en primer lugar de situar los debates sobre la SaaaMM en su contexto histórico y contemporáneo. A continuación, examina el Documento de Trabajo 213 de la CNUDMI y las disposiciones legales que contiene, que constituyen la base de los debates actuales sobre esta opción de reforma en el GTIII. Además, explora la posible relación de esta propuesta de SMM con diferentes aspectos del régimen jurídico internacional vigente en materia de inversiones. El documento concluye proporcionando algunos elementos que requieren una mayor consideración en este proceso, especialmente para proteger los intereses de los países en desarrollo.

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Document de Recherche 162, 11 août 2022

Le mécanisme multilatéral permanent proposé et sa relation potentielle avec l’univers existant du règlement des différends entre investisseurs et États

par Danish et Daniel Uribe

L’option de réforme du Mécanisme permanent de règlement des différends internationaux en matière d’investissements actuellement en discussion au sein du Groupe de travail III de la CNUDCI a soulevé un certain nombre de préoccupations importantes concernant la réforme du système de règlement des différends entre investisseurs et États. Le présent document s’attache, dans un premier temps, à situer les discussions sur le mécanisme de règlement des différends dans leurs contextes historique et actuel. Il examine ensuite le document de travail 213 de la CNUDCI et les dispositions juridiques qu’il contient, qui constituent la base des discussions en cours sur cette option de réforme au sein du Groupe de travail. Enfin, il explore les liens potentiels entre le projet de mécanisme de règlement des différends et les différentes facettes du régime des accords internationaux d’investissement. Il se conclut sur les différents points qui nécessitent un examen plus approfondi en vue notamment de préserver les intérêts des pays en développement.

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Climate Policy Brief 28, 14 November 2022

Technology Transfer and Climate Change: A developing country perspective

 By Nicolás M. Perrone

The role of technology transfer in climate change negotiations is vital. If technology is to help us mitigate and adapt to climate change, the international community needs to ensure sufficient innovation and technology transfer. One of the main challenges of the technology transfer regime for environmentally sound technologies is that a private and market-led model may not meet global technology transfer needs. This policy brief suggests that governments should explore market, hybrid and non-market approaches to accelerate the transfer of environmentally sound technologies. Developing countries’ governments should also explore cooperative approaches to improve their bargaining power, reduce costs and ensure adaptation and innovation capacity in the developing world.

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Research Paper 167, 27 October 2022

Analysing Intersections between Climate Change and Human Rights

By Daniel Uribe Teran and Luis Fernando Rosales

The effects of climate change on people’s daily lives threaten the full enjoyment of human rights. The Human Rights Council adopted two landmark resolutions recognising the human right to a clean, healthy and sustainable environment (Resolution 48/13), and establishing the mandate for a Special Rapporteur on the promotion and protection of human rights in the context of climate change (Resolution 48/14). Nevertheless, a broader dialogue between the UNFCCC and the UN human rights architecture seems necessary to establish a coordinated and coherent response to climate change and its effects on human rights.

This research paper analyses the intersections of these two legal systems. It does so by identifying how the climate change negotiations and the human rights architecture can contribute to strengthening international cooperation. It also recognises the need for a more profound international debate on the linkages between human rights and climate change consistent with the principles of equity and common but differentiated responsibilities included in the UNFCCC.

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Research Paper 165, 4 October 2022

Evaluating the Impact of Pillars One and Two

By Suranjali Tandon and Chetan Rao

The proposed OECD Pillar One and Two reforms mark a significant shift in the way large multinational enterprises are taxed on their global incomes. However, while considering the reform at the proposed scale tax administrators must be able to compare the revenue gains with alternatives. This paper uses open-source data to provide tentative estimates of the impact of Pillars One and Two. The methodology has been detailed so that administrators can replicate it for comparison. Further, the paper provides an assessment from the perspective of developing countries of some of the key design elements of the proposals so as to understand whether they are administrable and to foresee possible challenges.

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Tax Cooperation Policy Brief 25, 30 September 2022

UN Model Tax Convention: Selective Territoriality – The Specter of Privileged Player in a Rigged Game

By Muhammad Ashfaq Ahmed

This paper lays out the chessboard on which taxes on international incomes from immovables are contested, bargained, and harvested as per pre-determined rules that are starkly tilted in favor of developed countries. This embedded and pronounced bias in the international taxes regime in favor of developed countries makes them a privileged player. The developed countries then make maneuvers to optimize on their economic gains at the expense of developing nations rendering it a rigged game setting. The paper derives its rationale from an exceptionally selective choice of territoriality on incomes from immovables, which was astonishingly not aligned with the expected reverse capital movement, that is, from developing to developed countries. The genesis and evolution of selective territoriality are traced through its various institutional development phases – League of Nations (LN), Organisation for Economic Co-operation and Development (OECD), and United Nations (UN). An overwhelming international consensus on selective territoriality on incomes from immovables notwithstanding, the UN’s role is brought into spotlight to argue that the developing countries may have suffered massively over the past one hundred years by instinctively believing in the UN Model Tax Convention’s (MTC) efficacy and blindly pursuing Article 6 in their bilateral double taxation conventions (DTCs). The inimical implications of herd-mentality on part of developing countries got galvanized in the particular wake of developed countries employing innovative optimization tools – citizenship/residence by investment programs, tax havenry, manipulable ownership structures, beneficial ownership legislations, and porous exchange of information regime – to maximize on the economic gains. The paper undertakes both normative and structuralist evaluation of selective territoriality to sum up that this is an unjust principle of distribution of fiscal rights at the international level particularly in asymmetric economic relationships, and can hold its ground only until developing countries attain full cognition of the reality and start raising their vocal chords in unison to dismantle it.  

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