The Handbook of Transnational Governance: Institutions and Innovations

-

Handbook of Transnational Governance

Handbool< of Transnational Governance Institutions and Innovations

Edited by Thomas Hale and David Held

polity

Individual chapters © their authors 2011; this collection © Polity Press. 2011 First published in 2011 by Polity Press Polity Press 65 Bridge Street Cambridge CB2 lOR. UK Polity Press 350 Main Street Malden. MA 02148. USA All rights reserved. Except for the quotation of short passages for the purpose of criticism and review. no part of this publication may be reproduced . stored in a retrieval system. or transmitted. in any form or by any means. electronic. mechanical. photocopying. recording or otherwise. without the prior permission of the publisher. lSBN-13 : 978-0-7456-5060-9 lSBN-13: 978-0-7456-5061-6 (pb) A catalogue record for this book is available from the British Library. Typeset in 10.5 on 13 pt Swift by Toppan Best-set Premedia Limited Printed and bound in Great Britain by MPG Books Group Limited. Bodmin. Cornwall The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of goi ng to press. However. the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate. Every effort h as been made to trace all copyright holders. but if any have been inadvertently overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition. For further information on Polity. visit our website: W\vw.politybooks.com

Notes on Contributors Preface 1.

x xxiii

Editors' Introduction: Mapping Transnational Governance Thomas and David Held

Part I

vHClU;::;C"

in 1

Networks Introduction

2.

37

TIle Basel Committee on

39

Kevin 3.

Financial Action

Force

45

Ian Roberge 4.

Financial Stability Board

50

Randall Germain 5.

The Group of

55

Kirton 6.

Global Forum on and of for Tax Purposes

Tony Porter and 7.

LA'L",VHU....

U'''H'_'- &

Santa Barbara's Bren Environmental Science & and co-founder of the Center for International Environmental Law. In 2005, Mr Zaelke published Making Law Work: Environmental

and Sustainable Development

(with Kaniaru and a two-volume of the best literature on environmental compliance and the publication includes 'What Reason Demands: Making Law Work for Sustainable by M. Stilwell and O. Young. Mr Zaelke also directs IGSD's reducing black carbon, to the Montreal I.'ri,;-r,rr. CAjfJCULUJ.U5

xxi

Our world is changing, and with it institutions that govern us. vr'T"'! International legal have them as rights and obligations in contexts as diverse as human rights agreements and bilateral investment treaties. These actors provide techniset and Corell monitor (Keck and Sikkink 1998), lobby decision makers (Mazey and Richardson 2006), make regulatory decisions (Blithe and even 'enforce' them by, example, naming and shaming and Sikkink Hale 2008b). All of these actions may be taken either as the of entities, or without any state involvement at all The 1970s work on transnationalism considered non-state actors central of world politics. Nye and Keohane, for write that a of complex are the transnational bonds that non-state actors create (Nye and Keohane 1971). Other writers go further, that global should be conceived of not as a system of state-to-state relations at but rather as a 'complex a of actors Ferguson et al. 1976), theorists and other neo-Marxist also attention on the political role of multinational corporations. However, rise of neoliberal institutionalism in the 1980s lessened interest in non-state actors. So lost from the debate did transnational actors become by the mid 1990s, it to edit a volume entitled Back In, which sought to reassess the non-state actors on state (Risse-Kappen 1995). In contrast to the politics argues these interactions are not part of the domestic process which state are but an essential element of the international politics that determine state behaviour. This renewed interest in transnational actors led to more Keck and Sikkink (1998), studied how transnational networks of activists could wield power in the international

Editors' Introduction

system by powerful states to their cause. Kaldor and colleagues documented substantial of civil society actors in global politics Still, while the 1990s work on transnational activism itself from its 1970s predecessors the assumption that the only sophistication, much of it way transnational actors might influence global politics, or at the way, is by states to their cause. In many issue areas. however. actors influence international institutions directly, subverting the that keeps ULeU""" power in the hands of member to domestic - but also as direct is one realm in which this phenomenon has become Betsill and Corell (2008). for example. that in many international environmental fora NGOs are best of not as observers but as functionally in many ways, to diplomats, in that 'perform many the same functions as state delegates: they the interests their engage in information "'A'. . H."H,~"-, policy advice'. on multistakeholder participation in United Nations (UN) summits in this volume speaks exactly to this question. The European Union (EU) is also cited as a common target of direct interest group According to and Richardson (2006), 'the national formation process is "shaped political (Moravcsik 1998: but ... domestic groups are also cHI;a}',"'u l.f1rJ'p'nf'tl.rJ.•Pt1tlV at the level and see that level their own . Their analysis available to interest groups to lobby either lights the through states or around them. and demonstrates how a strategy with all relevant actors, supranational allows lobbyists to manage The literature on transnational actors' m mtergovernmental fora leaves unresolved the issue of whether such is 'allowed' by states and institutions (Tallberg 2008) or 'seized' non-state actors much the literature on environmental and the EU). Are NGOs equivalent to diplomats, as Betsill and Corell would have or does increasing NGO partICIpation efficient the state? Should we agree with Raustiala that the fact 'that NGOs are now more

9

10

THOMAS HALE AND DAVID HELD

pervasive in international environmental institutions illustrates the expansion, not retreat, of the state ... ' (Raustiala 1997)7

The divide between what Green neurial' authority also remains mechanisms created by actors themselves et al. Hall and 2002; Falkner Kahler and Lake 2004; MattH and Blithe 2004-5; Graz and Wilke 2008). Some of these with and assistance authorities; privateers. 2 range from to set the food sanitation standards that form the 2009, 27), certification schemes that label or social (Vogel by the Gates Foundation, led to the standardization of health """joan... " (chapter 23). Green's (2010) the environmental realm numerical evidence that has grown ;)It';Hllll.-,,,,,,'n as well (Abbott and Snidal 2009), A seeking to enhance its reputation with credible regulation may need to make to NGOs to achieve goal, while a corporation that does not trade on its social credentials will not. (Neo)Marxist theories also focus on explanatory power of est competition. These theories tend to see global governance as, to alter Marx's phrasing, the executive committee of the global ",,-'v,-,,',,-, Innovations in transnational governance, because often a role to transnational rfYrntYr" the interests of creates power structures to facilitate the extraction of surplus workers and the global (Callinicos 2002). Some writers stress the role of capitalist actors multinational corporations in this process (Bornschier and Chase-Dunn 1985), while more structural theories emphasize the abstract forces of global (Hardt and Negri 2000; Van Apeldoorn 2004). The O'rr\Hl1-h capitalism in the world thus explains the rise of institutions and their bias toward the interests of nf\uTAr1'11 Western economic actors and their Third World compradors, There of course, much variation this cannot account for e.g. the form between, say, the trade and the finance or the different levels of success achieved in different environmental issues. It is insensitive to the potential of interests between workers and in the North and in the South. Nonetheless, the central these theories - that global the powerful governance tends to reflect the interests in powerful states - is J.u'o;;aILH)'HClJ.

theories

ask what types of arrangements Ideational or constructivist appropriate, and actors believe to be These socially determined how these beliefs change \~'~'hh"­ in which actors operate, and so 'construct' the political behaviour. are the variable for results from changing ideas about how political institutions be organized. Two can link beliefs and ideas to institutional may reflect dominant '-AI-'J.Cl.HU.U;;

21

22

THOMAS HALE AND DAVID HELD

way to solve collective action democratic welfare state in the by extensive public interventhe predominant statist mentality. organizations a view that COlllloe'ten bureaucracies were the best way to solve governance LUetU'::ll);::."";). This view then shifted a later with the that would CHLUL'U.HF',

or solutions to institutions at the transnational associated with this However, ideological for public versus governance are interlaced with material and thus may be difficult to from the competition model discussed above. Another mechanism could be simply the development and 'discovnew ways of addressing certain Just as innovations emulated competitors and diffused are been copied and so too have innovations in spread. and Pattberg argue that microsocial processes of learning and norm diffusion are a driver of new governance in the environmental (Dingwerth and Pattberg transnational ones, U_'-H"'VA'JF.'.'-J, HH_AWWU.,F.

can also occur across levels governance. A number the transnational governance mechanisms exhibit institutional with each other and with domestic cognates is 1996). For example, the global carbon trading dioxide market created to address modelled on the air in the United States. The same is true for product labelpartnerships ling schemes (Abbott and Snidal 2009), and transgovernmental networks and 2006). That all these mechanisms have grown more common both and during the same period that interdeis not their only driver. and the Ideational theories seek to governance institutions as a way to understand the meaning hold for social actors 2007). Such beliefs - e.g. regarding how legitimate or an institution is are seen the processes that lead to institutional as drivers Scholars have Habermasian discursive make governance more by

Editors' Introduction

to reasoned deliberation Payne Several of the innovations in this volume, such as the 'info-courts', seek to create precisely this effect (Hale

Historical approaches Historical approaches connect the nature of governance arrangeand the economy. often shifts in on and causal processes similar to the theories listed but emphasize the historical in which these factors play out. In this changes in governance come as of a transformation'. For example, Polanyi's landmark of that title describes the of and the vn:!ce'oeo them. He argues that both the modern nation state and modern capitalism required each other in order to function, and should not be thought of as 'market' and 'state' but rather as an social structure (Polanyi 1944). Along lines, Murphy gives a neo-Gramscian tion of the evolution of global governance. In his view the world rr';W~L"­ solutions. Such assessments present for social sci.. entists, because they require us to how the case might have differed under another governance institution. We can gain some traction on this when an institution can be compared to other, similar this is often not the case in global politics, as Accordingly, thoughtful, sis is typically the best way to assess J",',.. ,,".,r the bifurcation of the and that international relations scholars have moved away from. the insights this research seeks matter just academic reasons. The world is transformation as globalization raises new than political institutions to address them. Innovations in are HHue.ti

global

Financial

,\LfLrnn::,v

Bom·d

states (in this case the US and it was unable to retard the IT,'r,ur1·n of either financial asset bubbles or unsustainable account imbalances among its member states. In the end, a global framework of financial governance can nation states and national in their and where refuse to tread governance like the FSF cannot lead. The 2008/9 global credit crisis has neither changed nor the roles played by governance organizations. In the case of the FSF, has been an interesting ment, which is a move to more closely with the upgraded version of the G-20 that as a central of the international response to the crisis. Whereas the Asian crisis of 1997/8 resulted in the creation of the G-20 at the level of finance ministers, by 2008 after a decade of strong economic ITl'rn.rr·n among several market C'-'JU'Vll,UC,,,, India and Russia so-called 'BRIe - an argument had emerged for it to be hardened into a heads-of-state group. This idea tumultuous autumn of 2008, and it was only a small how the FSF might also leI this new configuration of Thus it was that the new Leaders G-20 directed the FSF to expand its membership and rename itself as a Board from 2009, exactly ten years after the FSF was first created. The mandate of the has not in any tant respect from that the FSF. It is still involved in international standards and vulnerabilities. It has also been charged the G-20 to work closely with the IMF to better surveillance to the emergence financial risks, In this it remains to be seen whether the FSB will be any more (or given that none its

The FSB and Financial Governance there are many who the efforts of transgovernmental organizations such as the less doubt whether any kind of consensus-oriented governance organcan actually rein in the practices of private financial institutions (Underhill and especially where there are arbitrage opportunities to within the context of unclear lines of national ", ...r,rfl,rn,,rIT 2004; Panitch and

53

54

RANDALL GERMAIN

If the FSB is an

~"'-'dUVL undertake coordinated actions and harmonized The latest debate concerns what the roles and relationships of the G-8 and G-20 will be The G-8 and G-20 could continue to meet separately, could combine their meetings, or could fade away. Some argue that that the G-8 adds something that the G-20 cannot - the shared values individual and social advance. With non-democratic Saudi Arabia and China as full members of the it is poorly positioned to take political action on North Korea, Myanmar and elsewhere. as the G-8 long has. The G-20 also yet to address in a serious way many issues on the G-8's such as global health and biodiversi ty.

Future Directions much like the G-20 and Group of Seven ministers since 1999. The G-20 would focus on core and economic issues. while the G-8 would address social and ones. The two groups could meet around the same time and as did in Canada in 2010 - or they could out with the G-8 summit still taking place in the summer and the G-20 in the autumn as in 201lo The G-20 could the G-8 (Martin 2008). There would need to be on how this would happen, what format it would follow, who would host and in what order. and what the agenda would be. Since the G-8 has included a wider number of participants, members of the G-20. If these countries are included and treated as they might be more willing It would be necessary for the G-20's it to make large, 'G' group, the G-20 over as the that the G-8 lacks. But some of the G-8's compact, to come to a consensus and tiveness could be lost. It remains to be seen how the G-20 Summit will evolve and how effective it will be. Thus in its crisis phase, the summit has proven to be a successful and governor. Its ability to be ~~"UJ>~ adaptive and has allowed it to function in the face of the economic crisis. And its ifnot and will allow it to evolve. AiT,Art-1UA

3The G-7 includes all the members of the G-8 except Russia.

The Group

59

References A. and J. Kirton (2010). 'TIle "Great Recession" and the Emergence of the G20 Leaders' Summit'. Rising Rising Institutions: The of Global Governance, ed. A. S. Alexandroff and A. F. Cooper. DC: Institution Press. Beeson, M., and S. Bell (2009). 'The G20 and International Economic Governance: (~rr"'Tn{>r'lU Collectivism or Both?, Global Governance 15: 67-86. C. F. (2004). '''The G20 and the World Economy". Statement to the of the G20. March 4'. World Economics 5(3): 27-36. and E. M. Truman (2005). 'The United States and Boyer, J. wU''-',h'L'", Market Economies: or Partners'. The United States and the World Economy: Foreign Economic for the Next ed. C. F. and the Institute for International Economics. DC: Institute for International Economics. De Brouwer, G. (2007). 'Institutions to Promote Financial Stability: Reflections on East Asia and an Asian Fund.' The International the IMF and the G20: A Great in the M. Uzan et aL Houndmills: Palgrave Macmillan. Fues, T. (2007). 'Global Governance the G8: Reform for the Summit Architecture', Internationale Politik und Gesellschaft 2: 11-24. Y1WctIL'",.

at the annual convention 20-24 February.

J.

(2001a). in Global Governance.' in the Twenty-First Century, ed. J. Kirton,

Effectiveness and Global Order: G8 Governance J. Daniels et al. Aldershot:

J. (2001b). Global Economic Governance: The the G7 and the International Fund at Dawn'. New Directions in Global Economic Governance: Managing Globalisation in the Twenty-First Century, ed. J. J. Kirton and G. M. von Aldershot: J.

(2005). 'Toward Multilateral Reform: The G20's Contribution', Multilateral Institutions from the A Leaders 20 ed. J. English, R. Thakur et al. Tokyo: United Nations University Press. J. (2008). for the G20 Leaders Summit on Financial Markets and the World . The G20 Leaders Summit on Financial ed. J. Kirton. Toronto: G20 Research f/ptfW'Yn1110'

60

JOHN KIRTON

J. (2010). 'The G20 Finance Ministers: Network Governance'. Rising Rising Institutions: The of Global ed. A. S. Alexandroff and A. F. Cooper. DC: Institution Press. Kirton, J., and J. Guebert 'A Summit of Substantial Success: The Performance of the G20 in Washington in 2008'. G20 Research Group. Available at www.g20.utoronto.ca/analysis/2008performance090307 . (accessed 2010). Martin, P. (2008). 'Time for the G20 to Take the Mantle from the G8'. Growth, Innovation, Inclusion: The G20 at ed. J. Kirton and M. Koch. London: Newsdesk Communications. 1. (2007). The G20 after no. Washington, DC: Institution Press. Available at www.brookings.edu/papers/2007/1017developmenLaspx 2010). Porter, T. (2000). 'The the Financial Forum, the G20 and the Politics of International Financial at the annual convention of the International Studies Association, Los 15 March. Available at February 2010). M. Uzan et al. (2007). 'The International Monetary Convention A Public-Private Exploration of the Future of the International Monetary . The International System, the IMF and the G20: A Great in the ed. R. M. Uzan et al. Macmillan. (2000). the Global Economy Government Networks'. The Role of Law in International Politics: in International Relations and International ed. M. Oxford: Oxford University Press. Slaughter, A.-M. (2004). A New World Order. Princeton: Princeton University Press. A.-M. (2009). 'America's 88(1): 94-113. A.-M., and Hale (2010). Networks and Powers' States, Institutions: The Global Governance, ed. A. S. Alexandroff and A. F. Cooper. Washington, DC: Brookings Institution Press. Soederberg, S. (2002). 'On the Contradictions of the New International Financial Architecture: Another Procrustean Bed for Market Economies?' Third World Quarterly 607-20. 1. (2005). 'Asian Financial The Problem of in Global Financial Governance'. Global Governance 11 (October487-504. 'South Africa: Beyond the in Global Governance'. Reforming Multilateral Institutions from the A Leaders 20 ed. J. '-'''F,''J'', R. Thakur and A. F. Tokyo: United Nations University Press.

Global Forum on

6

Global Forum on Transparency and Exchange of Information for Tax Purposes Tony Porter and Ver6nica Rubio Vega

111e and of Information for Tax established in 2000 by the Organisation for Economic Co-operation and (OECD), had 2010 become the transnational venue for tax evasion. Tax An estimated $6.2 trillion is public policy by individuals from developing countries, of billion per year, to those C;"".lHJ.r; the $103 billion per year countries receive in foreign aid (Oxfam 2009). Developed countries similarlyexperience tax losses: the US government has that tax havens cost 53 billion in forgone tax revenue annually (Addison 2009: 707). The combination of the of Ull,dlH_C and the persistence of the sovereign state system has made control of tax evasion extraordinarily difficult. Yet, as OECD . . cu·rPl-" Angel Gunia stated in 2009 address to the GFTEITP in Mexico at which the institutionalization of GFTEITP took a a dramatic step forward: 'What has in the tax area over the 10 months is less than a revolution! ... The threshold of tolerance tax evasion has to zero: The GFTElTP is interestnot just for its important practical in tax evasion, but also for what it can tell us about transnational governance innovation. Five lessons stand out.

Network Structure First, the GFTEITP is a quintessential of a transnational policy network, policy instruments such as standand yet it has been traditional state-centric organizations or The OECD has been a pioneer innovations that have now become widespread in transnational governance. These include peer review, the of informal among officials, HU).'"-UUV....

61

62

TONY PORTER AND VER6NICA RUBIO VEGA

and the creation of mechanisms to include and all have been UlL,w.Hl.t:, in 1961. More recently the OECD has to with actors other than its member states by networks devoted to disseminating best in various areas. The GFTEITP as one such Global Forum from 2000 to 2009, when it was further institutionalized. It international especially the Model Agreement on Exchange of Information on Tax Purposes in 2002. For many years the OECD and the GFTEITP have pressure on countries standards on and of information lists of non-compliant jurisdictions. reports have become more detailed and specific over 87 countries 2009, and has increased By 2009 over 100 tax information had been signed and dozens more were under negotiation 2009). All 87 tax dictions surveyed had committed to the internationally but 22 from Andorra to had not L'-J.aL.lVLL0

-,.- .. ----J toward compliance. in Mexico in attended by 178 and ~JJ.~.H~·U the GFrEITP. agreed to make the more independent from the OECD, to establish self-financing mechanisms based on member contributions, to invite new members committed to its and to establish a secretariat (which the OECD will and a Peer Group, a Review Group to develop for mandatory peer reviews with puband follow-up, providing the GFTEITP with a more institutionalized structure than the other Global Forums. While consensus, the peer review process will aim to ensure 'that no one jurisdiction can block the adoption or publication Council2009a: The GFrEITP's own decision to was reinforced by a of the OECD Council the GFTEITP in its new form on a basis (OECD Council 2009b).

legitimacy and Inclusion second lesson from the GFTEITP is how its greater and inclusion than OECD initiain the 1990s, the tives has on its long experience in tax began to become heavily . The involved in addressing tax evasion and 'harmful tax

Global Forum on

harsh criticisms from offshore centres, which that tax policies were the of each individual state. The offshore centres for them when many OECD countries had similar tax policies. This combined with the G. W. Bush hostility toward the idea of harmful tax of the OECD's as a club of

for instance done South and the need to help developing with capacity The Steering of the GFTEITP include non-OECD countries as Vice-Chairs. This inclusiveness is an ingredient of the GFTEITP's success.

Continuing Role of the State and Intergovernmental Organizations The third lesson from the GFTEITP is despite the state power and traditional institutions are still in interaction with the informal GFTEITP. The OECD is a (IGO) with powerful member states, and its for the GFTEITP was cruciaL The from Clinton to Bush to Obama had impact on the governance of transnational tax matters, reflectthe power of the US. The G-20's endorsement of the GFTEITP's work especially when the G-20 leaders' April 2009 a toolbox counter on transactions aid and investstance was to later in the year in Pittsburgh, where the G-20 stated they 'stand to use countermeasures against tax havens from March 2010' This greatly the of the threat that powstates could take measures to penalize transactions with nonjurisdictions. of differentials in power is evident not in the pressure on small tax to but also in the unfortunate of specific of the standards. The standards countries to sign twelve or more tax information ,-,-,u,-,U,"" to be compliant, and since these have tended to be bilatto favour powerful countries that have a favourable

63

64

TONY PORTER AND VER6NICA RUBIO VEGA

However, all these power politics are either by or with other more transnational aspects of the GFTEITP. Although the OECD is a IGO, the GFTEITP itself is a network many As such, powerful states do not always their way. For in the US administration transnational tax governance but not decisively - the OECD's work even the Bush years (Ault 2009: 770-2). The GFTEITP involves commitments that work against power differentials, such as commitments to 'ensure that its members participate on an 2009a: 1), and to assist weaker states

Crisis and Innovation The fourth lesson is how the GFTEITP experience reinforces the rec:ogm,~ea connection between crisis and policy innovation, since 2008 played an important in the against tax evasion. In addition mobilizing for '-"'"'''l',L that are typical in crises of all types, there were effects Governments were extraorchallenges in having to reduce the debt at a time when their recoveries were anger at bank bailouts and bonuses had focused attention on the perceived unfairness of the incomes and corporate revenues, on the one and on the other. As the G-8 leaders noted in their 2009 Declaration: 'In this time, the protection of our tax base tax fraud and tax evasion are all the more the extraordinary fiscal measures to stabilize the world economy and the need to ensure that economic is conducted in a fair and transparent manner: the crisis had not in the centres, their lack and were easy to connect the crucial role that these had in about the increased the political pressures of the GFTEJTP. '-VAUHHUHUC>LJ

Future The fifth lesson is while weaknesses persist in the form has certain advantages in

its these. The

Global Forum on Transparency

wealmess in the standards is the that tax authorities requesting information from another jurisdiction must have a documented reason to an individual or firm and must limit their to that case. This has been characterized by the OECD as 'fishing this greatly weakens the tax evasion usually concealment of exactly the of information that the authorities would need to document suspicions to request assistance. At the same the character of the GFTEITP provides opportunities for further innovation to address these weaknesses. The GFTEITP and the institutions associated with it have in shared norms about tax sovereignty 2009). Much as in other issue areas, such as the environment or war crimes, there is an understanding that states have responsibilities to the global community and to citizens in other states that go beyond their to not interfere with the of other states. The character of the GFrEITP will understanding to be strengthened more effecthan negotiations and other more formalized mechawhich tend to freeze Additionally, of the GFrElTP for sub-sets of states to go beyond standards and higher standards their own upward pressure on the standards forward momentum is evident in the GFTEITP, for instance in its commitment to continue to ~~IJ~.U'-' the number of agreements on the exchange of tax information, through the of new of unila teral and multilateral measures, in addition to the ones that were most important. Moreover, the OECD has made clear that a jurisdiction cannot simply at the minimum twelve bilateral agreements to be compliant but must 'continue to even after it has reached this threshold' 2009: 10).

References Addison, T. V. (2009). 'Shooting Blanks: The War on Tax Havens'. Indiana Journal Global Legal Studies Summer): 703-27. Ault, H. J. (2009). 'Reflections on the Role of the OECD in International Tax Norms'. Brooklyn Journal Law 34: 757-81. A (2009). 'Sovereignty, Taxation and the Social Contract'. Minnesota Journal of International Law 18(Winter}: 99-143. Gurria, A (2009). 'Remarks at the Global Forum on oflnformation'. Available at

65

66

ANDREAS NGLKE

,00.html

a\..~",-"",,,,-, 17 December

2009).

R. T.

'Ending the Tax Haven Scandal'.

1-11.

OECD (2009). 'Overview of the OECD's Work on Tax Evasion: A Brief. Available at (accessed 17 December 2009). 'Summary of Outcomes of the of the of Information for Forum on Transparency and 2009'. Available at Held in Mexico on 1-2 17 December

7

Accounting Standards

Overview within the all had to base their accounts on International Financial Since 2008, these standards have also been ..,r-r'£~r.,.""" Standards Beside the twenty-seven EU member states, by the US other countries use IFRS. These standards are devised by about Accounting Standards Board a organization with fifteen full-time members that is located in London and directed as well as funded by the International (IASCF), a private company in the Delaware. TIle lASCF is traditionally financed by the Big companies (PricewaterhouseCoopers, Deloitte and Ernst & Young), although the lASCF basis has become much during the last years. TIle IASB features

As of

International

Standards Board

innovations. It standards as well as other documents on usually days. this period everyone can submit a comment letter that will be published on the IASB site and will be taken as an in the process within the IASB committee network. All of the IASB, as well are held in and are as most meetings of the IASCF webcast. five years, the IASCF Trustees have to undertake a formal review of its in many countries - in Given that IFRS Germany, for example, the accounting standards contained in the Handelsgesetzbuch we may consider this recent development as one of the most of public within international politics. Like securities and governance principles, lFRS are one of the twelve Standards for Sound Financial overseen by Financial Board.

Development innovations in transnational governance, the has been able to nearly accepted norms, whereas several earlier attempts international such as the the Union A number of authors have the institutional of the International Accounting of the IASB, within Standards Committee / IASe, the this process. In the IASC was formed to ease British Union. British accounting bodies were accession to the afraid that would lead to a transfer to UK (Hopwood 1994: 243). While this never became a mixture (the EU accounting German the IASC still its position, most notably by institutional (Martinez-Diaz These partners include the International Federation of Accountants / IFAC of Securities '-'V.UHLU",,, as well as the of the Financial Stability Board. The endorsement by lOSCO and, by other international (lOs) such as the World Bank and the IMF were crucial in the rise the IASB toward a nearly standardsetter 2005). For these the of IASqIASB proved to be an effective way of

67

68

ANDREAS NOLKE

behind the rise of the Union. process with its endorseUH'~'V'" amplified the the Big Four These observations are also broadly in line with other recent studies on the U'-\"~"'~Vi'-U,":''',U within the IASB. Other authors the dominance of rr".. rD,CO,,,_ tatives from Anglo-Saxon countries 2008) and ofIOs that are close to the held these (Dewing and Russell 2007).

Impact Globally

standards clearly indicate a major contribution, since they substantially ease financial transactions across borders. In contrast to many other cases of transnational such as social reSDonSllDll "'-"'-,,,.... ,,, IASB norms are not very broadly implemented and (although the latter relies on However, the substantive impact of the evolution of standards is more controversial and N6lke the Fair Value to IASB has in contrast to the prevailing in Continental Western an asset to its current market price. On the one hand, the Fair Value approach favours a short-term-investor toward the with the more in Continental Western Moreover, of significantly contributed since it forced banks and other

69

70

ANDREAS NOLKE

assets, frequently them to ,,-,,,\."H5 to additional write-downs. The so far been to revise its stance on Fair and instead proposes minor modifications to the standards that determine the value of financial assets (N6lke 2009). However, one result of the sub-prime crisis was the of a Monitoring that links the IASCF Trustees to a number of public market authorities. Whether this modification substantially increases public over the priva te IASB remains to be seen.

References Botzem,

S.

'Transnational Governance from a

(2008).

Standardiza tion: Point of View' Graz and A. N61ke.

ed. J.-c. London and New York: L P., and P. O. Russell (2004). "_L'UUJCLUJLL5,Auditing and Corporate Governance of Listed EU before and after Enron'.

Transnational Private Governance and its

289-319.

Dewing, I. P., and P O. Russell (2007). 'The Role of Private Actors in Global US, and International Governance and Convergence of World'. The Politics Corporate Governance Studies in Global Political ed. A. London and New York: eds. Globalisation Godfrey, J M., and 1V'""""LL

source for the overall assessment issued by the IAIS, the ICPs, is Financial Sector Assessment conducted on a the IMF and the World Bank. Assessment of the basis LU",-HL

in the self-assessment exercise on behalf of the fifty this statement is not supported by any numerical evidence. See IAIS

78

DONATO MASCIANDARO

in Fund surveillance and the Assessment on of Standards and Codes with this assessment Three documents on the IMF and the World Bank in 2001, 2003 some other details on the

acceptable followed by to the assesincluding some had emerged only in among insurance of development of the insurance sector in the assessed varied substantially, and the degree of of the ICPs also changed accordingly, being in those having a more developed insurance sector than in those a less developed one. Another LU.'"""F. was that the self:assessment consistently gave the IMF and World Bank assessments. supervisors better marks As of December assessments had taken place, which still revealed common weaknesses in a number of areas. The 2005 is of since it was produced after the revision of the ICPs in 2003 and because it still represents the most to the overall implementation of level. At that moment a weaker level of observance of standards than in the banking sector could still be observed. differences in the level of observance across the major weaknesses in the areas of the supervisor and asset risk these surveys on the ICPs' implementation the IAIS has also surveys on of other standards, in the Cf()SS-O()raler and cross-sector cooperation and information ofInternational Financial prlev€~m:mg, detecting and in insurance (2007) and disclosure standards (2008). A general sion which may be derived from the analysis of these is that there is a broad among countries in respect of the ilCO>lUF'T

in

Conclusion that the process ofinternationalization of the insurance has noticeably increased the role of the WS and its In today's market, international regulatory efforts start directly at the international so that a top-down approach is gradually replacing former bottom-up process of Several areas have been deeply influenced this of internationalization. As noted above, the first MoUs in 1997 to the more recent MMoU, have found it increasingly 11C'LC"''''V'~t>T'~ CaC1Vl.l.The close and exclusive Coc)p(!ranon and industry in the ICH has led critics to argue that the ICH is to a large degree determined by the to reduce the regulatory burden for Abraham and Reed 2001; WHO even "O"'-"'HlJ,

2007: xvi).

for Environmental

networks, such as the International Network enable

Informal cooperation on common environmental concerns can help resolve transenvironmental problems, create efficiencies in the development of tools and programmes, create a level the regulated industries among and ultimately political will needed to reform weak tal standards.

Contribution Transgovernmental Networks Strengthening Environmental Compliance and Enforcement Transgovernmental networks can enhance environmental As Slaughter need rules without power but with actors who can be held to account a variety mechanisms. In this context, a world order based on alongside and even in international institutions, holds 2004: 10).

11.1

Environmental

~"'I""~" __

and enforcement are the foundation for the

rule of law. good governance, and sustainable

95

96

DURWOOD ZAELKE, KENNETH MARKOWITZ, MEREDITH R, KOPAROVA

INECE a case in In 1990, thirteen countries and international attended the first Workshop for Environmental Compliance and in Netherlands, The Workshop resulted other, broader conferences and ultimately in an to launch a unique network of:

•

awareness of the of and enforcement; • strengthening capacity ment and secure compliance with • developing for enforcement

INECE is now a

and from more than 140 countries who are the NGOs and academia. What is the shared commitment among participants to the with laws to protect human health and the environment. INECE is by an Executive Committee (EPC) which defines INECE's cooperative efforts and makes decisions to realize the INECE mission. The EPC is composed of no more than persons with balanced the world, international organizations including UNEP and the World the for Economic Co-operation and Development (OECD), Commission, and NGOs. INECE is an is not L!';r1"ll'In and monitoring of trans boundary movements waste through seaports.

Regional Networks INECE has a long history of supporting the development of J..IU':UH.-

Transnational

with a justification to move from to catch-all strategies (Edwards and Gill 2003: The flexible character of crime continuously cal authorities and law enforcement organizations the vast volume of serious and Boer et al. national crime makes it difficult for law to their material and human resources to crossborder Boer and Spapens In many countries, pressure has been such that the more and local crimes have been at the expense of attention to law cooperation. This that international rl'i,'ont'r individuals within the national it has been difficult to establish crossteams or a mutual legal assistance sufficient priority within the law (Rijken and Vermeulen 2006), and because and misunderstandings about the and initiatives. anl-A1"'r'alC'n

Strategies for Transnational Policing can Several transnational ventures illustrate that countries have benefited from each other's and One major strategy is international which is seen by many as the core of transnaFor each police about the criminal, his movements, his and his market is a crucially important condiHence, several law have embraced intelligence-led policing as their dominant modus In terms of police governance, this agreement about the distribution of funds that are to be invested in intelligence and systems, but, more importantly, about the of (which is appreciated as a valuable or between different in the sector. Mutual trust between public and as regulation is not be handled rl'iT·T'p,~' been to adopt networked on the fringes of structures.

109

110

MON

BOER

law enforcement agencies have embraced networked structures as well as instruments and that focus on the ation. The adoption of a networked governance to the abolition of typical networked features are encouraged transnational liaison mobile or nodal policing, and the creation of international information and intelligence architectures. In the secondment of law to locations that harbour crime hubs is Liaison officers are stationed in a jurisdiction who act as intermediaries between the law enforcement authorities of two countries. role can be quite and facilitate mutual Ll"'.1cUH

a number of countries. relatively - in a liaison officer is seconded to another a few in the United States (Andreas and Nadelmann years had its the activities of liaison officers have widened from actions are often take before a factual record is even published. is no of environmental case, the CEC factual record that authorities had environmental law by approving the building of a for cruise ships in protected waters off island of Cozumel. The anyway. Fear of publicity and shame do not incentives environmental ""'-AH_CUL

procedural difficulties with the CEC NGOs tend to advance much further the process than submitted threshold oftechnical and administrative ,-dIJ 24 months after last disbursement; complaint without substance / to gain business advantage; complaints before other or review bodies

Procurement; substantially disbursed loan

corruption

after last disbursement, or if dealt with by peM or satisfactorily by other lAM Procurement; fraud and corruption; main purpose to seek competitive business advantage; complaints pending before other judicial bodies or lAMs cause to exclude; concerning 'adequacy or suitability of EBRD policies';

Procurement; fraud or corruption; complaints before other or review bodies

Institutional element

lAM

World Bank Inspection Panel

IfC &. MI(;N6

lOB

AsDB

EBRD

AIDB

Consultation and

Mechanism

Complaint

Mechanism

Review

I

Mechanism

Decision to authorize problem-solving exercise

Not

CAO determines

of

and

exercise

Decision to authorize

Panel

SPF determines determines of request, and decision to

efljI(IDllltY of

request; SPF decides to conduct nrr.hl,'m. exercise, but final recommendations must be Bank President

CAO has

authorrze; pfesident "lh,rn,.tt1 with respect to its embedsociopolitical context. Arguing tradition of Niklas Luhman, Mathias

within world

functional

a political a instead' (Albert 2007; also

legal ""'''-PTTl Albert 2002}. arbitration has been addressed within the research on transnationalized governance and on institutional change 2003; Djelic and Sahlinand Andersson 2006). In in institutionalized linklevel operates with ages between national and the that have been established to the that the facilitate trade and are products of the fabric of our contemporary period and e.g. Greif 1992; Hasenclever, Mayer et al. that actors who operate within also are not constrained by them but .... u'~U,.,.L'n them. This general focus has also resolution. Operating explicitly the attention herein shifts to the of competing claims

Transnational Commercial Arbitration

M. (2002). Zur Politik der Weltgesellschaft: Identitiit und Recht Kontextinternationaler Germany: Velbruck. Albert, M. (2007). 'Beyond Variation and Differentiation Relations through Transnational ed. C. Brutsch and im

B, L. (1998). 'How to Secede in Business Without Really Leaving: . Secession, Evidence of the Substitution of Arbitration for State & Liberty, ed. D. Gordon. New Brunswick and London: Transaction Publishers. B, L. (1999). To Arbitrate or to Litigate: That is the /";uf'orJl'llnJournal of Law and Economics 8: 91-151. ed. (20m). The Practice Law. New York: Kluwer Law International. H. J. Law and Revolution: The Fonnation the Western Legal Tradition. Cambridge, MA: Harvard University Press. H. J., and C. Kaufman (1978). 'The Law of International Commercial Transactions Mercatoria)'. Harvard International Law Journal 19(1): 221-77. H. J., and F. J. Dasser 'The "New" Law Merchant and the "Old" Sources, and Legitimacy'. Lex Mercatoria and ed. T. E. Carbonneau. Dobbs NY: Transnational Publisher. 1. (1992). Out of the Legal . Journal of Legal Studies 21: 115-57. L. (1996). 'Merchant Law in Merchant Court: Rethinking the Code's Search for Immanent Business Norms' The University of Pennsylvania Law Review 144: 1756-821. L. (2001). 'Private Commercial Law in the Cotton Industry: Cooperation Norms, and Institutions'. John M. Olin Law & Economics The University of S. (2009). 'Le international d'investissement'. 25 July 2005. Jusletter. Available at www.weblaw.ch/ ac(:es~;ea 25 January G.-P. (2002). 'Reflexive Transnational Law. The Privatization of Civil Law and the Civilization of Private Law'. /tnTcrinrj"/T 185-216. A (1996). 'On Market

and the of Institutions: The Case of International Commercial Arbitration'. '''''"{In,.n>> Economic Review 40: 155-86.

145

146

DIRK LEHMKUHL

J. B. Nations. London: Allen & Unwin. Cutler, A C. and Liberal Myths: Settlement in Private International Trade Relations'. of International Studies

377-97.

Cu tier, A C. (2003). Private Power and Global Authority: Transnational Merchant Law and the Global Political Economy. Cambridge: Cambridge Press. and B. Garth Dealing in Virtue: International Commercial ATbitration and the Construction of a Transnational Legal Order. Chicago: The of Press. eds. (2003). Globalization and Institutions: the Economic Game. Cheltenham, Glos.: Edward Elgar. M.-L., and K. Sahlin-Andersson (2006). Transnational Governance in Fields and their Dynamics. Cambridge: Order Without Law: How Neighbors Settle Disputes. Mi\: Harvard Press. R. C. 'The Aim of Order without Law'. Journal of Institutional and Theoretical Economics 150: 97-100. M. (2001). 'Fair.com? An examination of the allegations of

unfairness in the ICANN UDRP'. Available at www.udrpinfo.com/resc/ acoeSSE~a 25 Fair.com? An on Bias and the ]CANN UDRP'. Available at http://aixl.uottawa.cargeist! lacc:ess,~d 25 2009). and Coalitions in Medieval Trade: Traders'. Journal of Economic 49: Greif, A 'Contract and Economic Institutions in Early Trade: The 83(3): 525-48. A (1992). 'Institutions and International Trade: Lessons from the Commercial Revolution'. American Economic Review 82(2), Papers and of the Hundred and Fourth Annual Meeting of the American Economic Association (May, 128-33. A, P. et aL (1994). 'Coordination, Commitment, and Enforcement: The Case of the Merchant Guild'. Journal of Political 745-76. A, P.

Transnational Commercial Arbitration

D. (2003). Resolution in Transnational Trade: and Co-evolution of Public and Private Institutions'. Globalisation and Institutions: Redefining the Rules of the Economic Game, ed. M.-L. and S. Cheltenham Glos.: Edward

LC1UU.l\.Ulll,

D. (2006). Transnational Disputes: Commercial Arbitration and Linkages between Providers of Governance Services'. New Modes of Governance in the Global System, ed. M. and M. Ziirn. Palgrave/Macmillan. W. (2001). 'Private in a Global Economy: From to Arbitration'. International 919-48. P. R., D. C. North et al. Revival of Trade: The Law HH_"_'.'''H Fairs' of ICANN's Uniform rm1J(JY(""11.rpCenteL Available at http://dcc.syr. acc,eSSt~,,,,",,,< sure to second-hand smoke and on tobacco 2010a). Subsequent COPs in Bangkok in 2007 South Africa, in November 2008, have '''''_'''-''' for the November 2010

FCA: Civil Society and Tobacco Control The FCA was formed in 1999 to improve NGOs involved in the FCTC negotiation process, and to encourage other to participate, particularly those in As well as health-focused NGOs, the FCA includes environand women's organizations (Wipfli, Bettcher

The Framework Convention Alliance

et al. 2001). The Alliance's that of a 'watchdog' for the Convention which entails of tobacco control capabilities; for accession and implementhe its implementation; and promotion and global tobacco control campaigns. to assisting by low- and The FCA is particularly middle-income countries (LMICs) to participate in the process. Among other it has to tobacco control advocates from low-income them to be involved in the the Alliance's commitment but also the recognition that in many of the poorer countries which will most from an treaty, NGOs are at the forefront of tobacco control efforts (Hammond and Assunta 2003).

Involvement in Negotiations Granting of provisional official relations status to member NGOs by the WHO allowed the FCA involvement in Convention most the right, at the invitation of the chair, 'to make a statement an expository nature' (WHO 2000), which was generally restricted to a short statement at the end of a session. As in formal sessions was, proceedings' activities negotiations, (Collin, Lee et aL 2005), via its was its most significant contribution. Prominent input to INBs included provision of meticulous policy advice to via briefings, seminars and daily lobbying and communication through and press conferences and of reports on a range of related themes. this process the Alliance, 'remarkable acuity and comfor the FCTC (Warner 2008).

Current Focus Since the FCTe's entry into force in have included the FCA FCTC Monitor approach to evaluation that includes l>TtA,..1rc

200S, Alliance activities

159

160

ROSS MACKENZIE

obligations as Parties to the treaty Oategaonkar 2007). It has also analysed trade agreements and a range of tobacco industry activities. The FCA is closely involved in protocol development, and supported initiatives at the second COP meeting to commence negotiations on a protocol to curb trade in contraband and counterfeit tobacco products. Contraband poses a significant threat to progress on tobacco control, as suggested by the series of INBl meetings to formulate an Illicit Trade in Tobacco Products protocol. Work on other areas of urgency - including product regulation and disclosure, education, communication, training and public awareness, demand reduction measures, support for economically viable alternatives to tobacco production, and protection of the environment - were advanced in preparation for the fourth COP scheduled for November 2010 in Uruguay. Despite the crucial impact of the FCA in the ongoing FCTC process, the organization faces considerable financial uncertainty, and continues to work to resolve issues surrounding funding and mechanisms of assistance (Framework Convention Alliance 2008).

References Framework Convention Alliance (2008). FCA Bulletin 85. Saturday 22 November. Available at www.fctc.org/dmdocuments/Issue%2085%20 saturday.pdf. Framework Convention Alliance (2010). 'What is the Framework Convention Alliance?' Available at www.fctc.org/index.php?option =comJonten t&view=article&id =2&Itemid =9. Hammond, R., and M. Assunta (2003). 'The Framework Convention on Tobacco Control: Promising Start, Uncertain Future'. Tobacco Control 12: 241-2. Jategaonkar, N. (2007). Civil Society Monitoring of the Framework Convention on Tobacco Control: 2007 Status Report of the Framework Convention Alliance. Geneva: Framework Convention Alliance, 2007. Available at www.fctc. org/dmdocuments/fca-2007-mon-monitoring-report-en.pdf. Mathers, C. D., and D. Loncar (2006). 'Projections of Global Mortality and Burden of Disease from 2002 to 2030'. PioS Medicine 3(11). Available at http://medicine.plosjournals.decenturl.com/archive-1549-1676-3-11-pdf. Warner, K. E. (2008). 'The Framework Convention on Tobacco Control: Opportunities and Issues' . Salud Pilblica Mexicana 50(suppl. 3): S283-S291.

1 The four INB sessions on a protocol on Illicit Trade in Tobacco Products were held in Geneva in February 2008, October 2008, June/July 2009 and March 2010.

Global Fund to

Tuberculosis, and Malaria

D. Bettcher et a1. (2001). the Global Tobacco Mechanisms of Global Governance'. International ed. M. McKee, P. Garner et a1. Oxford: Oxford University Press. (2000). World Health 'J't,OU,"'U on the Framework Convention on Tobacco Control. First Provisional agenda item 7. A/FCTC/INB1/5. 29 nongovernmental in the Negotiating . Available at www.who.int/gb/fctcjPDFjinb1!e1inb5.pdf. World Health (2008). of the Third Session of the Conference of the Parties (COP3), November. Available at World Health Parties to the WHO Framework Convention on Tobacco 6-17 February. Available at www.who.intJfctc/cop/enj. World Health (2010b). of the Second Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control, 30 June-6 July. Available at www.who-int/ fctc/COP/second_session_COPjen/index.html.

Global Fund to and Malaria Johanna Hanefeld

AIDS, Tuberculosis,

the private sector and communities that represents a new to international health

History The Global Fund was created in the UN General Assembly Special Session on HIVIAIDS (UNGASS), which underscored the need for increased for combatting Since its creation in 2002, the Global Fund has become the main source of finance programmes to AIDS, tuberculosis and malaria. By 2010 the Fund had approved funding of more 8.7 for more than 550 in 140 countries.

161

162

JOHANNA HANEFELD

It AIDS globally, tuberculosis, and (Global Fund 2010). 60 per cent of Global Fund resources have been provided to countries in Sub-Saharan Africa, with the rest of n"1n,,,',,n South Latin and the Eastern and Central Asia; slightly more was devoted to East Asia & the Pacific, and ---r'---'J East and North Africa (Global Fund, 2010).

Structure and Operations a Secretariat in Geneva and awards to countries. It is a mechaagency, and the Fund has no presence in it Grants are made directly to countries who then sub-grant to others. PRs include ministries and tions. The Fund was one of the first international iU~C'-Uv,,,,-,,'af1 health as well as better health initiatives there is an ongoing devoted to monitoring the called the Global Fund Observer. This information, news and debate on all of the Fund: www.

References M., and M. Sysaal (2007). 'A Triclde or a Flood: Commitments and Disbursement for from the Global Fund, PEPFAR, and the World Bank's Multi-Country AlDS (MAP)'. Monitor. DC: Center for Global et aL 'The Global Fund: Great Lancet 364 (9428): 95-100. R., J. Cliff et al. (2005) 'Global Fund Country Comparative Analysis'. London School for Medicine'. Discussion Available at Carceres et aL (2008). 'Lessons Learnt from the of the GFATM Supported HIVIAlDS in Peru'; Available at www.ghinet. R. (2009). "The GAVI, Global Fund, and World Funding Platform. Lancet 374: 1595-6. Global Fund (2008). 'A for the Global Fund'. Available at www. ":l'-'~'-".''-U

10

2009).

165

166

MATHIAS KOENIG-ARCHIBUGI

Global Fund (2010). The Global Fund 2010 Results Innovation and Impact. Geneva: Global Fund. Hanefeld, j., N. et a1. 'How have Global Health Initiatives Impacted on Health A Literature Review'. WHO Commission on Social Determinants Health Network. Maximising Positive (2009). 'An Assessment of Interactions between Global Health Initiatives and . Lancet 373(9681): 2137-69. Murzalieva, G., J. Aleshkina et a1. Global HNjAIDS Initiatives and their Impact on the Health GHIN Final London: GHIN.

Omman, M. Bernstein et a1. and Health '''''TPn,,, Global Omman, N., M. Bernstein et al. (2007). AIDS: A of the Global Fund and World Bank MAP

Republic,

on AlDS

Uganda and DC: Center for Global

NJ'n,un,rJ'llV Country Study. Global Fund Starling, M., G. Walt et al. (2005). Tracking Study, Progress London: Global Pund.

20 Global Polio Eradication Mathias Koenig-Archibugi

The Global Polio the WHO as 'the

Initiative has been described health initiative in . It was to eradicate the year 2000. At the time of writing, the has not been attained the global incidence of polio has been reduced by over 99 per cent. The main drivers of the are the World Health (WHO), the US Centers for Disease International, but the initiative

children on National Immunization donors have contributed over billion to the

Global Polio Eradication Initiative

History Poliomyelitis is a viral infectious disease that can result in permanent paralysis and death. The development of polio vaccines in 1952 (by Jonas Salk) and 1962 (by Albert Sabin) resulted in the mass vaccination of children in developed countries and a drastic reduction of polio incidence in those countries. The successful eradication of smallpox, which was completed in 1977, stimulated discussions about which disease could be the next target for an internationally coordinated eradication programme. In the early 1980s there were significant differences of opinion among experts regarding the advisability of prioritizing polio for eradication. Two events were decisive for the launch of the GPEI. First, in 1985 the member states of the Pan American Health Organization committed themselves to the goal of eliminating the indigenolls transmission of polio in the Americas by the year 1990. This initiative was based on NIDs involving every child under five, and the surveillance of cases of acute flaccid paralysis (AFP) among children. The last case occurred in Peru in 1991 and the WHO certified the eradication of the diseases from the American region in 1994. Second, in 1985 Rotary International started a major fund-raising campaign to support worldwide polio immunization. In 1988, the representatives of WHO member states convening in the 41st World Health Assembly committed themselves to the goal of eradicating polio by the year 2000, describing it as an 'appropriate gift, together with the eradication of smallpox, from the twentieth to the twenty-first century'. As Shiffman, Beer et al. (2002: 227) note, after that the goal of polio eradication 'swept across the developing world like a tidal wave'. They argue that the combination of three factors - scientists pointing out that polio was a burden in less developed areas, health leaders understanding that the disease was eradicable, and several international organizations pledging support to fight the disease - ensured that government after government mobilized for an eradication campaign. As had been the case in the Americas, the main strategy for eradication was the use of NIDs.

Structure The governance of GPEI consists in primarily technical bodies staffed by public health experts - the Advisory Commi ttee on Polio Eradication (A,CPE) and the Global Commission for the Certification of the Eradication of Poliomyelitis - and the Interagency Coordinating Committee (ICC), whose objective is to bring transparency and

167

168

MATHIAS KOENIG-ARCHIBUGI

accountability to funding from ments_ The effort is coordinated by an structured 'global team' The interaction between and within those polio bodies is governed by discourses about appropriate priorities and methods of eradication. An important feature of the GPEI is that the main organizations that are involved stand in a of accountabwith mechanism of accountabof autonomy of WHO of mainly interaction and managers, who often have been involved in GPEI for many years. The fact that cerns and are discussed and solved not mean that there are no open and formal and control. in polio eradication is discussed during the of the World Health ("\lVRA), which offer also a between donors and ent countries. The GPEI information that facilitates public which establish 'mileaccountability through the Strategic these stones', and the Annual Reports, which assess have been met and the toward each HLCUIC15'-U

The as Solution to a Transnational Cooperation Problem The eradication a disease particular challenges for transnational When the goal is to control a unilateral action by individual states may results. By contrast, eradication concurrent elimination of the disease on the eradication may from all countries. be to control for a number of reasons, notably that the cost may be the elimination of the need to vaccinate in the future. The necessity of international arises because policymakers may face two situations it may be in the interest a state to eliminate a (Barrett 2004). only if all other states have eliminated the disease its in their own territories. In this 'coordination situation, an eqUilibrium can be if states could be reassured that all other countries are also to eliminate the disease. Once such an assurance, they have no reason for not states

Global Polio Eradication Initiative

ing the disease themselves. What is is an institutional mechanism that can this assurance. a state's interest to A different situation arises when it is not eliminate a disease even if all have done so. This scenario may correspond to a of incentives (Barrett 2004). This possibility is eradication is a clear of a 'weakest-link' ducing a public if one state fails to eliminate the then the whole eradication effort fails ers' dilemmas requires institutions that are able to deter states 'defecting' and sanction them if fail to The ePEI extent. Several of the initiative reassure states that other states are also investing resources in the elimination of and thus contribllting to the effort: the WHA of 1988 and subthe commitment sequentWHAresolutions on polio of all states toward this by the ePEI provide a record ofthe activities and the system for certifYing that from polio provides important information to states. and credible reporting by an international agency does not only help to address the 'coordination but also in mitigating the prisoner's dilemma that states may in. The commitment to polio eradication made tions is not legally binding on states. enforcement powers of the ePEI are weak: are ess;enna to 'naming and shaming' that appear not to act decisively. But this source of influence can be An example is provided by the 2003-4 crisis COlnCE:rn polio vaccination was in Kano and two other northern Nigerian states. The ePEI team at the WHO was rC>'r\f'llrTc>11 ensure the resumption of the Islamic Conference (0lC) to pressure on the leaders of those states, and by that travellers from Kano vaccinated at the involved in the annual !:,,",b.'~~.~'b~ L\C .... Hl.lVlV};

2009).

The preceding analysis, which focuses on the to public goods, can several features ePE!. But two considerations need to be added. the ePEI is not tional solution to cooperation problems stemming preferences; it has also played an important role in those or rather a preferences in the first place. It has provided a complex and multilayered set of forums, where a number of """O&VAHl'.

169

170

MATHIAS KOENIG-ARCHIBUGI

health actors and other officials were socialized into a certain set of beliefs about health priorities. As Shiffman (2006: notes: a state may not a health cause such as polio eradithe cause because domestic health officials cation, but come to that other countries are and are to be left behind. Thus, we may a global policy framework that presumes a cross-national diffusion of ideas and as state and non-state actors learn from and influence one another.

Global Polio Eradication Initiative

Global polio eradication initiative Annual expenditure, 1988-2009 Financial resource requirements, contributions, funding gap, 2010-2012 ... .. ... ....----m

1000,-~m-- ~ ~ ~

~+

~+

.......~.

...................... ...........................

~-------------------------------

------------------------------~

---------~

. . . . . . . . . . . ----

200+-----------~·············-------·

100

+------.. . . . . .

20,1

~---

Global Polio Eradication Initiative annual ~"'>'~"~'"

1988-2009.

Volww.polioeradication,org/fundingbackground.asp,

Public Sector Partners

I

,00iO

500-1,000

Development Banks

Unit"d States of America United Kingdom

World Bank

Bill & Melinda Gates Foundation

250-499

100-249 Norway, UNICEF regular resources

50-99

United Nations Foundation

25-49

5-24 !nteT-American lJevelooJnent Bank, African nAvel,nornAlli Sank

1-4

20.2

DOllor profile for 1988-2012.

As of February 2010.

Source: www.polioeradication.orglfundingbackground.asp.

: Advantage Trust . International Red Cross and Red Crescent SOCieties. Pew Charitable Trust, W 8th, Shinn o·en, OPEC

171

172

MATHIAS KOENIG-ARCHIBUGI

such as Somalia and between 25 and 50 per cent of the real cost of elimination were incurred 111ey also estimated that between 1988 and 2005 polio-endemic countries have contributed at least $1.8 billion in volunteer time that this is a very conservative estimate.

Assessment of the GPEJ There were an 350,000 cases in cases were globally in 2009. The over 99 per cen t is a achievement initiative. cannot be achieved as long as there are any cases of polio at all. It is still uncertain whether and when the eradication can be reached. Over the years, GPEI has been the subject of a number of critinotably observers who question whether the substantial amounts of and devoted to could have been directed more effectively toward other goals. There is little doubt that polio has absorbed a share of health that is not in direct to its health. Shiffman (2006) examined the money forty-two donor organizations multilateral ment pharmaceutical companies and philanthropic foundations the twenty diseases causing the most disease Table 20.3 shows that there are very ratio among the diseases. 1 Polio is the disease that receives the most funds per DALY: it accounted for 0.04 per cent of the global burden, received 14.61 per cent of all direct grants. The accorded to is not problematic, if its eradication would be a relatively way to use funds for health 2 However, several have denied that this is the case. Taylor, Cutts et al. (1997) noted that most of the benefits of eradication will go to industrialized countries, whereas ratios different for poor countries. Mittal et aL (2005) maintain that polio eradication should not have

.Ht:HH.r

WHO and other measure and compare the of diswhich is an eases by means of the disability-adjusted life-year indicator that and information. 2 Or if the of polio eradication would allow heal th agencies to raise resources that otherwise would not be available for global health policies at all.

Global Polio Eradication Initiative

Disease

Percentage of of Total direct burden direct funding 1996-2003 (thousands of among 20 diseases amongllJ dollars) diseases 2,453.79

Polio Onchocerciasis

Trachoma

fever HIV!AIDS

Malaria

0.04

14.61

1,998,425

146,96

0,35,

8.17

1,117,553

138.07

0.04

0.90

122,858

54,79

0,22

1.93

263,851

54.49

0,03

0,29

39,877

51.51

0.Q2

0,20

27,736

21.27

0.64

2.18

297,667

20,37

0,14

0.45

61,704

9.25

31.13

46.21

6,320,599

7.94

0.58

0.74

100,594

5,]

1.78

1.46

200,059 936,423

4.69

9.10

6.85

4.58

1.38

1.01

138,751

3.92

14.30

9.00

1,230,574

Schistosomiasis

3,90

0.56

0.35

47,935

Leishman iasis

3.33

0,63

0.34

46,148

Intestinal nematode infections

3.30

0;75

0.40

54,539

Tetanus

1.65

3.27

0.87

118,415

2.40

328,357

Measles

1.14

9.06

Acute

0.58

25.98

227,338

·Donor f,unding is considered lor the 1996-2003 in deflated dollars, with 2002 as the base Burdens are measur€d tn DALYs the year 2000 for countries, Percentages are of total for the n'Venty dise1-UY£,aro 'vertical' and 'horizontal' to healthcare support. Vertical on one health or a small number of internationally defined and often and are time-limited. Horizontal approaches aim to the health systems of and are generally not bounded. of vertical that they do improve routine health services or even weaken them by human and material resources, while ofvertical expect them to have positive 'indirect' effects on other healthcare main in the debate are reviewed The WHA resolution that started the GPEI in 1988 mandated eradication of primary services, but whether this has occurred is still a matter of debate. The WHO itself stresses the positive of polio on other dimensions of healthcare For instance, it noted that the GPEI 'has been the largest bishment of the maintain that the other diseases such as meningitis, fever and yellow and that the vast pool of health workers built up by GPEI will become available for other immunization and disease activities (WHO/UNICEF 2005: 20,

Empirical studies seem to confirm the absence of major effects. Levin et aL (2002) examined sources and uses of funds routine immunization programmes and eradication activities in Cote d'Ivoire and Morocco the years 1993-8 and found that all three and most bilateral and multilateral donors continued to fund routine immunization programmes at levels to those before the GPE!. Loevinsohn, Aylward et al. (2002) the findings of three studies that the health system eradication had positive or although NIDs caused some disruption to health service delivthe NIDs conducted ery. Rani et aL (2004) examine the under the GPEI on the vaccination coverage under the expanded pro-

Global Polio Eradication Initiative

gramme on immunization in fifteen countries of Sou th Asia and Africa 1990-2001. found that NIDs were associated with in the EPI in some countries (India, Cote d'Ivoire a decrease in others and and no clear effect in the rest. In sum, existing studies that the net the GPEI on systems has been positive or at least neutral in most countries. But this does not address the more fundamental criticism that the resources on polio should have used the direct of routine and healthcare activities. Such hinges on the that such resources could have been raised without linking and its main modality, the attractive) NIDs. While the assessment this counterfactual statement is ex'Ce(Xllng;l) difficult, there are reasons to doubt that political leaders and millions of health worl<ers and volunteers would have similar levels of commitment in absence the prospect that aUJ"-"'," could be ridded another feared disease.

References L, M. Nakane et a1.

'Is Polio Eradication Realistic?' Science

312: 852-3.

R.

S. Bennett et a1.

mmes Have

When Do Vertical (Stand-alone) PrograWorld Health and and European Observatory on Health

Policies. A. Acharya et a1. (2003). 'Polio Eradication'. Global Public Aylward, R. Goods Health, ed. R. R. Beaglehole et a1. Oxford: Oxford Press. 'Polio Eradication: Mobilizing and and J. Linkins the Human Resources'. Bulletin of the World Health Organization 268-73. S. (2004). 'Eradication versus Control: The Economics of Global

Infectious Disease Policies'. Bulletin of the World Health

82(9):

683-8.

S. (2009) 'Polio Eradication: Strengthening the Weakest Links'. Health 28(4): 1079-90. Bonu, M Rani et a1. (2004). 'Global Public Health Mandates in a Diverse World: The Polio Eradication Initiative and the on Immunization in Sub-Saharan Africa and South Asia'. Health Policy "-,AIVCU'''''-.'''

327-45.

J., and H. Feldbaum (2009). 'Diplomacy and the Polio Immunization Boycott in Northern Nigeria'. Health 28(4): 1091-101.

175

176

JONATHAN KOPPELL

Levin, S. Ram et al. (2002). 'The of the Global Polio Eradication of Routine Immunization: Case Studies in Initiative on the Cote and Morocco'. Bulletin of the World Health 822-8. et al. (2002). on Health A Case Study of the Polio Eradication Initiative'. American Journal of Public Health 92(1): 19-23. Roberts, L. (2006). 'Polio Eradication: Is It Time to Give Up?' Science 312: 832-4. O. Mittal et aL (2005). 'Polio Eradication Initiative in the GPEI'. ofHea!th Services 35: Shiffman, J. 'Donor Funding Priorities for Communicable Disease Control in the World'. HealthPo!icy and Planning, 21: 411-20. Shiffman,J., T. Beer et al. (2002). 'The of Global Disease Control Priorities'. Health and Planning 225-34. Taylor, C. E., F. Cutts et al. (1997). 'Ethical Dilemmas in Current for Polio Eradication'. American Journal Public Health 87(6), 922-5. Thompson, K. M., and R. J. Duintjer Tebbens (2007). 'Eradication versus An Economic Lancet Control for 1363-71. WHO (2002). Immunization and 2002-200S Geneva: World Health ~L.hW'U""U Global Immunization Vision and Strategy. Available at (accessed 12 2011).

Internet and

U ......,AL ..........

Names

Jonathan for Assigned Names and Numbers has been a entity since its It is not a rrr""PlcnTTI agency or an international per se. Rather lCANN is a unique for the rules of and overseeing the Internet's Domain Name Essentially means ICANN is for that when Internet users enter W\vw.theonion.com in their web browser, they get the satirical news site and not a page devoted to onion This involves selecting and the companies that register and manage

Internet

I1rrll1r(lr1rm

for Assigned Names and Numbers

domain names, the rules for the settlement regarding domain names, and the physical maintenance the DNS infrastructure, ICANN holds these responsibilities of a contractual with the United States ..,.""'w,.'.., force behind the of the Internet and owner of the root servers which house its central Since its creation in lCANN has with different approaches to and in response to evolving responsibilities and criticism, even as it carries out its substantive mandate. Most ICANN announced that domain names will be available in non-Latin and that commercial will be scripts (e.g., allowed to their names as top-level domains (I.e" .canon can be a domain alongside .com or VJ.jt:;.,eUL,Q

Development of ICANN ICANN is an institutional ...."",-"u,,,,uu of a group of Internet V""I'''' who established the rules of the Internet. Under the Internet Architecture Board and (IANA), a mostly US government employees or researchers by government grants, set many the early the Internet under a series US government contracts and Most directly related to lCANN's responsibilities the an unincorporated entity that was name for Jon Postel - considered essentially an many the of the Internet and his IANA focused on the manner in names were assigned to many computers that were linked via computer networks; it still lCANN' (IANA 2010). This became exists as an entity known as the Domain Name and as the Internet became more widely used so too conflicts related to it (Zittrain 1999; Mueller 2002). Popular awareness first occurred in the late 1990s with when individuals trademarked brands as domain names (e.g., pepsi,com), but there were numerous other issues as well. There was little consensus, selecting new top-level domain example, as to the proper means names (e.g., .com and Postel and his colleagues moved to formalto resolve such He ize IANA as the organized the Internet Ad Hoc Committee, a group that together some but not all interested parties to hammer out a memorandum of but the government contractor

177

178

JONATHAN KOPPELL

the root servers refused to add the domains by the Ad Hoc Committee This impasse drew the US government into the conflict, the National and Administration (NTIA), a unit Commerce that had taken over of Internet-related contracts from the National Science Foundation. the proper form ofDNS govAfter a lengthy deliberation proposals was issued and lCANN was selected to DNS (Froomkin 2000). The transfer for was intended to create some distance between the US and the of the Internet. To facilitate this shift of responsibilities to a nongovernmental organiwere among the Network Solutions (the contractor that had the DNS servers) ICANN 2002). lCANN's primary rAI01r\"nt-prJ-P,rI areas, the international coral and fibre cables (laid on the ocean floor). As March ICRI adopted h"",..,t-,,_,,' decisions and resolutions on topics from to monitoring, to economic valuation of coral reefs, partners to information, undertake case studies and their results at ICRI on, ICRI also established Network (rCRAN) whose mandate is to assist in capacity for reef management in developing countries. To take one of its ICRAN was funded in million by the UN Foundation to establish sites.6 Partner take turns on a voluntary basis to host a small ICRI Secretariat for two-year The Secretariat has no permanent staff and is funded the hosting government. The perin addition to their regular res;ponSluH.a"_,, forms rCRI Past host countries include the United States, Sweden, the Philippines, the United Kingdom and the (ICRI rCRI is neither an international governance structure nor a policymalting body. Its expressly goal is to identifY and promote needed action without in policymaking and without or proposals. loose institution is an informal network of interested parties, an forum for like-minded actors to discuss coral reef share information, promote research, priorities and facilitate action. The initiative does not have a structure or and does not engage in action. It encourages stockholders to establish projects at the local community level. and information on the health of reefs, by increasing and capacity building.

5 ICRI decision texts available at sion.html. 6 C. Wilkinson, Coordinator of the GCRMN.

185

186

RADOSLAV S. DIMITROV

Scientific Cooperation Much of the international collaboration on corals is related to tific research. Concerted documentation of global coral decline in earnest in the Various review from that period that knowledge the health and values absent (Bryant, Burke et al. Responding in 1996 the the UNEP, the World International Union Conservation of Nature formed a to establish the GCRMN. Its is to collect, nate information on health and to states build research for coral assessment. The GCRMN has been the main operational unit and nent of ICRI, intended to monitor reefs' conditions and necessary data for management and Salvat 1998: 17). The GCRMN hundreds of researchers and formed a partnership 1998 with Reef a network of 5,000 volunteers whom scientists train in and vulnerabilities. only natural scientific uu.vu.uu decline, and excluded undermined governance processes as information on the and had little incentive to nrr,rA/"r vU.U''''~VJ'~, in 2002 the Global Socioeconomic Coastal Management (SocMon) was estabrelevant to policymakers.

Analytical Observations Country officials involved in ICRI see it as 'an advocacy group', erately intended as an arrangement that serves as a rary for most governments want to that way. From time to have been discussions on whether to formalize the but members have unanimously n,..,:>t"'''''''~'rl to stay with a and informal mechanism rather than engage in the burdensome task institutional and financial arrange-

7p.c., C. Wilkinson.

International Coral

187

and relevant international instiin tutions as a mechanism instead of a competing agency.9 France is the only that has a "T""rA,r"n for a more bureaucratized structure but they, too, want it to remain 10

The lack

intergovernmental policy should not be equated to an Efforts to promote sustainable coral manare unilateral national bilateral partand non-state initiatives (Dimitrov In December 2000, the US Coral Reef Conservation Act established a reserve in the Hawaii that contained 70 per cent of coral reefs under US 2002). On the other side of the world, 33 per cent of the Great Barrier Reef and associated are protected areas or no-take zones (Wilkinson 2004). And some individual countries help coral reefs outside their jurisdiction. in with the World Bank and launched the CORDIO project to the Ocean and seek ways to affected reefs. In addition to national and bilateral governmental NGOs are active in the field of coral reef UH''''H'.'- REEF, ,-,va",,< to name a for developing and marine areas in Southeast Asia and the Western Pacific. Yet the absence ofa formal L"'pHeBl.'-U

is Available scienof incentives for binding collective action by states

L'l.UUU

of international coral shows that the evolution of the international political process matches the local character of the issue. From the very ........ 1::>' participants defined to turn the ICRI a bottom-up process driven a deliberate In the HLP"

233

234

CHRISTOPHER WRIGHT

Conclusion The effectiveness of many new forms of voluntary business regulation often on the of transnational corporations to reputational risks In the case the Equator exposure to risks varies across and is therefore unlikely to consistent and uniform levels of compliance. most effectively organized network for staging civil Banktrack is underwith the Principles. In any case, it is an advocacy that seeks to maximize the impact of its scarce financial resources on environmental and social causes, with a mandate that is not particularly well suited to an function on its own. Since neither the EPFI nor the project is required the Principles to disclose loan agreements or monitoring is in any case severely a lack of While the obliges 'report publicly at least annually about its Equator implementation processes and taking into account appropriate considerations' (Principle 10), to date has not enabled any kind of external of prY'_lpupl decisions that affect the environment and local communities. while the Equator have new political for civil groups and able diffusion environmental and social commitments across both commercial and national financial they have and credible mechanism for to hold EPFls accountable

References ABN AMRO (2003). 'ABN AMRO's BTC Pipeline . ABN AMRO press Amalric, F. (2005). 'The Equator Principles

of its Participation in the 10 December 2003. Towards Center for Responsibility and Sustainability, Working Paper Series No. 01/05, University of January. Banktrack Mind the Credit Policies of International Banks. Utrecht: Banktrack. Caceres, v., and S. Ellis (2006), First Half Review: Equator Journal 17 Financing' . EIR (2003). a Better Balance: The Final of the Extractive Industries Review. DC: World Bank.

The Equator Principles EPFI (2004a). 'Joint Letter to World Bank President James Wolfensohn', signed by ABN AMRO Bank NV, Citigroup, Credit Lyonnais/Calyon, Credit Suisse, Dexia, HVB Group, ING group NV, KBC Bank NV, MCC SpA, Mizuho Corporate Bank Ltd, and Westpac Banking Corporation. Available at www.equator-principles.com. EPFI (2004b). 'Financial Institutions Call for Extension of Safeguard Review', joint letter signed by ABN AMRO Bank NV; Banco Itau SA; Bank of America, NA; Barc1ays pIc; BBVA, SA; Calyon Corporate and Investment Bank; Citigroup Inc.; Credit Suisse First Boston; Dexia Group; Eksport I;o'n and domestic declare to the government their ","""UAU"

Extractive Industries Transparency Initiative

extracting natural resources. This is done and voluntary but in a few cases also the via These host own declaration of revenues received. After the data have been checked and verified by independent bodies must be made The final decision to do so lies with the EITI International Board. and actor groups. First, counThe involves various extractive industries must take four basic actions to become 'candidates'; make a commitment to appoint a senior tion, make a commitment to work with to work with and release a work plan criteria and see BITI 2010b). After a period of two years at most on special candidates have to start a validation process in order to achieve the status of 'EITI ",,,n this has proven to be a complex and arduous are the establishment of a (true) multigroup, the of an independent EITI administrator, and the disclosure and of companies' payments and revenues. After an (approved) EITI has been made available, a process may follow, in which an auditor assesses the based on criteria in the Em Rules Book. The validator is selected by the multistakeholder group from a roster so thirteen companies accredited with EIT!. After the multistakeholder group has agreed to both the draft and final reports submitted the validator, it is the decision of the International Board to label a candidate country as EITI or not. If both the valida tor and the International Board conclude that no 'meaningful nr.rlO"1rAC has been made, the country will be de-listed from EIT!. This countries not to rlT'f'TT"ClrT from adorning un;:u-,-.,,, without stnvmg to meet its The deadlines were introduced in due to pressure from NGOs, especially the PWYP coalition. VU.L'-HU

'-VJlUI-' . .

The Struggle for Compliance The IMF has defined more than fifty countries as 'resource rich', a group that is home to two-thirds the world's poor. Currently, countries are either EITI candidates or Em Cameroon, Central U.VUUL~, Azerbaijan, Burkina

239

240

HELMUT WEIDNER

Mauritania, Sierra Leone, Timor-Leste, Yemen and Zambia (status February 2010). Twenty-two countries of this group became Candidates in 2008 and were required to . . V.H~.l'­ validation by 9 March 2010. In 2010, seventeen countries an extension of their for validation, and for sixteen of these '-£"'.'-U"""'H~

status does not mean that all have been fulfilled. It is rather seen as the proper process on the road to full revenue transAlthough almost all candidates failed to meet the three quite countries have as candidates and recently (February and April 2010) been were given the standard deadline for validation processes: namely Iraq and Chad. the decision on was deferred on of the (Tr\""''''", EITI 2010c).

The Impact of EITI Since its inception almost eight years ago, Em has become a institutionalized movement to promote revenue transparency for sustainable in resource-rich countries. EITI has in terms structures, networks and the like. However, there is only scarce or vague information about its goal-related perimpact of its activities on addressees formance, that tions, governments) and resulting outcomes, e.g. reduced corruption, improved governance, and strengthened of the whole system. Of course, must come outcomes can be measured. Since EITI is a young initiative, no and valid should be this early. evaluations ofEITI reveal some structural discussed in the (sparse) critical 2006; Ali and 2007; Hilson and Maconachie 2009; Oranje and Parham 2009; Gillies 2010). The various studies call for, inter involvement at the sub-national level in reporting and beyond the basic criteria of EIT! to address earlier and later stages of the

Extractive Industries Transparency Initiative

extractive value chain; consistency in the quality of data proand more vided companies and company payments; and developing an appropriate for EITI reports. NGOs often criticize the lack of a disclosure of revenue Global asked, 'Disclosure of key financial data is country, so should it be different in economies?' (Global Witness 2004: 7). NGOs - in this case major international call for disclosure of contracts related to of possible structural deficits the basic effects is assumed to lead to less corruption and better governance, with effects for all groups It is assumed that a voluntary process based on cooperation and to reach such disclosure. The success of this on the observance of rules by the various stakeholders but task of the and verification of norm In the case of EITI means the EITI Secretariat and the Chair of the Board. If other stakeholders' trust in their commitment to norms the entire of the process may as has been observed in similar processes in other areas Web leI' et al. 1995). Of course it is a general of multistakeholder cooperation that and a norm agreed upon in does not always a clear direction on how to n"','1r,>" However, one cannot escape the impression that the EITI management has stretched the rules in order to avoid sanctions by'delistcountries that obviously ing' them) against a of the process. This would do not meet the the fact that two countries have been able to become Em compliant thus far, while the majority of candidates have asked for extensions. The Secretariat and the Chair have stressed the obstato the measures, faith. these countries act in publicly raised serious have not doubts concerning the true commitment offailing NGOs have done Human Watch 2010). Instead mismatches between rhetorical coma critical, neutral analysis mitments and concrete rather vague statements are made about a 'learning process all' and that 'validation has taken

241

242

HELMUT WEIDNER

(see EITI 2010c). A director of Human Rights Watch, the Em International Board, sees the situation as 'Em is at a juncture', he warns, cautionbe to lower the standards for that actually are not interested in scrutiny Watch 2010). However, at recent in Berlin (15-16 the ErIl Board allowed sixteen of countries that missed the T",'rt_'lAOlT deadline for validation to extend their candidacies. the two small West African Guinea and Sao Tome and and 'delisted'. Under Em rules

control'. Whether the Board's decision will be NGOs will on the detailed rationale the critical statements of Human Watch and Revenue Watch on their websites: www.hrw.org and It is to be that a ~"U~ able to sanction the FIA are external means of direct pressure exerted and universities in response to Structures of stakeholder within the FIA are also weak. While a very indirect form of 'interest representation' for workers is enabled to some extent their participation in the PIA Board of US and human NGOs, there are no systems of direct which individual stakeholders can select, communicate directly with those their interests. the concerns remain largely the Board. FlA stakeholders in processes of Direct involvement is also The FIA has several events referred to as 'stakeholder consultations', which a broad range of holder have been able to engage in two-way, deliberative discussions with FIA and staff. However, such events are not and it is difficult to demonstrate either broad strategic priorities or policies of the Association. Rather, these events have typically been oriented toward and analysis of more specific locations. To the extent that influenced FIA has tended to occur via much more diffuse and informal nT'(,rA'OC within the wider Association's and specific activities has influenced processes of internal FLA For example, such ks were illustrated the significant role of external the FIA's Charter reforms in 2001-2. However, such tive' processes have remained dominated by Northern UUIf.'UljTT'Af'lrC

Environmental The FSCs environmental impact can be assessed in relation to four reduced-impact fire and pesticide use. With to biodiversity conservafound - based on an research of 129 reports from 21 - a number impacts in the key areas, including aquatic and zones, sensias well as tive sites and high conservation value and and Hewitt 2005). Other studies are more cautious when it comes to the measurable on biodiverthat 'FSC certification of conservation, but timber production can contribute to (Gullison 2003: to that FSC-certified analysis from Malaysia to conventionally forests) perform to the and richness of tree macro insects and mammals et a1. 2008). Case study research from Guatemala found that FSC significantly reduced and the incidence of and from a reduction in use of pesticides when compared to business-as-usual scenarios (Hirschberger 2005).

U.LI..:>U'Ut.,1.L

dimension

One of the most contentious issues within the forest is North/South dimension. in the concern that the FSC standards mainly from the North, and that the effects of

269

270

PHILIPP PATTBERG

the FSC could be harmful from a account. FSC certification is compared by some timber the 1980s (Smouts

On this

So far, the main result has been to boost the advantages of temperate forests on the timber ... Over 90 per cent ofthe FSC certified forests are and boreal forests. Conclusion: if you feel you must have FSC certified timber, Eastern European and North American wood, not that is not a boycott, it bears a close resemblance.

TIlis criticism is underscored by the fact that over four-fifths of the FSC-certificated wood still originates from and North America. from countries In certification gives advantage to requirements are already in-line with the FSC standards. In contrast, the situation for countries is different as countries from the South and the North are hardly alike. Whereas industrialized countries have to make relatively few to their existing forestry as a result of already high in most Northern developing nations have to make substantial investments in to meet the certification often in a disadvantage benefit from the success of the FSC much more than and Indonesia. Currently, wood originate from other countries. The that are naturally manifold, but include the demand wood in industrial which has been strongly in the same period. In short, timber from develhave difficulty markets in the OECD region {Gullison 2003: In addition, looking at the roundwood production from certified sources per region, the of certain geographic areas becomes painstakingly visible: zero per cent of certified roundwood came from Africa in the 2007-9 (UNECE/FAO VL'JU.'UL';;;'

global One concrete example of how the effects regulation can go their initial aims is the of private standards by A number of have adopted national tion that resembles FSC rules. FSC certification in G_t"Pl'TTI concessions of state-owned or exempts holders from particular forms of public control (Domask

Forest

."YWIJ.rlJ,nnJ

Council

2003: 176). For instance, Bolivian forest legislation introduced in 1996

l

!

that independent certification can monitoring of national forest standards {Conroy 2007: 81). The South African government the privatization forests to FSC and in Mexico and Guatemala is also Pattberg partially linked or adapted to FSC standards 2006: In addition, a number have enacted timber procurement policies that as the appropriate benchmark (Lopez-Casero Further to the FSC has induced a subcreation of numerous alternative and certification schemes in the sector. In the words of Auld, Gulbrandsen and colleagues {2008: 200): '[P]robably the most unintended outcome of the creation of the FSC was how around the world responded by their own national certification schemes: Evaluations of this outcome are mixed. VVhile additional programmes have increased the overall coverage of sustainable management around the globe, standards have allowed companies claims and to benefit from the general connotation certification to their Given the 'without substantive various competing labels in marketplace, it becomes increasingly difficult consumers to assess the claims made on behalf of the various certification programmes. In recent years, the arena governance has proven to be a for instruments and institutions of voluntary On this account, the Forest Stewardship Council comes close to the 'gold standard' in forest governance. However, while the FSC's democratic is widely conclusions about its concrete and measurable effects are straightforward. Next to imposing a severe market barrier on Southern producers and mixed signals to consumers as a result the many alternative certification schemes that have sprung up as a response to the FSC's initial success, a number positive effects are noticeable. In particular the steady growth timber in the market as well as the rather positive calling the FSC the most in forest governance References L. Gulbrandsen et a1. (2008). 'Certification Schemes and the on Forests and . Annual Review Environment and Resources 33: 187-211.

271

272

PHILIPP PATTBERG

Cashore, B. (2002). 'Legitimacy and the Privatization of Environmental Governance: How Non State Market-Driven (NSMD) Governance Systems Gain Rule Malting Authority'. Governance 15(4): 503-29. Conroy, M. E. (2007). Branded: How the Certification Revolution Is Transforming Global Corporations. Gabriola Island: New Society Publishers. Councell, S., and K. T. Loraas (2002). Trading In Credibility: The Myth and Reality of the Forest Stewardship Council. London: Rainforest Founda tion. Dingwerth, K., and P. Pattberg (2007). 'Wirkungen Transnationaler Umweltregime' Politische Vierteljahresschrift (PVS) 39: 133-56. Domask, J. (2003). 'From Boycotts to Global Partnership: NGOs, the Private Sector, and the Struggle to Protect the World's Forests'. Globalization and NGOs: Transforming Business, Government, and Society, ed. J. P. Doh and H. Teegen. Westport and London: Praeger. Forest Stewardship Council (2010). 'Global FSC Certificates: Type and Distribution, January 2010'. Available at www.fsc.orgjfileadminjwebdatajpublicjdocumenccenterjpowerpoints_graphsjfacts_figuresj Global-FSC-Certificates-2010-01-15-EN.pdf (accessed 23 February 2010). Forest Stewardship Council, and WWF-Germany (2002). Forest Stewardship Council: Political Instrument, Implementation and Concrete Results for Sustainability since 1993. Frankfurt: FSCjWWF-Germany. Gullison, R. E. (2003). 'Does Forest Certification Conserve Biodiversity?' Oryx 37(2): 153-65. Hirschberger, P. (2005). 'The Effects of FSC-certification in Estonia, Germany, Latvia, Russia, Sweden & the United Kingdom: An analysis of Corrective Action Requests'. Summary report, WWF European Forest Programme. Hughell, D., and R. Butterfield (2008). 'Impact of FSC Certification on Deforestation and the Incidence of Wildfires in the Maya Biosphere Reserve'. Rainforest Alliance, USA. Lopez-Casero, F. (2008). 'Public Procurement Policies for Legal and Sustainable Timber: Trends and Essential Elements'. Powerpoint Presentation to the Forum on China and the Global Forest Products Trade, Beijing, lS-19 June 200S, Institute for Global Environmental Strategies (IGES) Forest Conservation, Livelihoods and Rights Project. Mannan, S., K. Kitayama et a1. (200S). 'Deramakot Forest Shows Positive Conservation Impacts of RIL'.lTTO Tropical Forest Update lS(2): 7-9. Murphy, D. F., and J. Bendell (1999). 'Partners in Time? Business, NGOs and Sustainable Development'. UNRlSD Discussion Paper No. 109. Geneva: UNRlSD. Newsom, D., and D. Hewitt (2005). 'The Global Impacts of SmartWood Certification, Final Report of the TREES Program for the Rainforest Alliance'. Available at www.rainforest-alliance.orgjforestryjdocumentsj sw_impacts.pdf. Pattberg, P. (2006). 'Private Governance and the South: Lessons from Global Forest Politics'. Third World Quarterly 27(4): 579-93. Pattberg, P. (2007). Private Institutions and Global Governance: The New Politics of Environmental Sustainability. Cheltenham, and Northampton, MA: Edward Elgar.

Global Corporate Governance Principles

D. H. (2010). to Legitimacy at the Forest Stewardship Council'. Journal of Business Ethics 92: 279-90. G. (2004). Forest Certification and Governments: The Real and Potential Influence on Regulatory Frameworks and Forest DC: Forest Trends. Smouts, M.-C. (2002). 'Forest Certification and Timber The Hidden Agenda'. at 43rd Meeting of the International Studies New 24-27 March. (2010). 'Forest Products Annual Market Available at _FPAMR2009. pdf

Global Corporate Governance Principles Andrew Baker

Introduction governance is the set of and that allocate HH~AUH;; authority between managto the a legal structure of company law, securistandards and labour relations law and Shinn 2005). It has profound consequences for important issues such as job workers' rights, and wealth distribution in The formation of international corpoand edited by Organisation Economic and assessed by the World Bank, is often associated with efforts to promote convergence on an Anglo-American model governance oriented toward the promotion of shareholder value. However, in terms of content, the are eclectic and Moreover, they were formulated an inclusive consultative multistakeholder process, while the means by which are assessed has involved a mutually dependent process a form of policy dialogue that is designed to facilitate mutual by both assessed and assessor. Consequently, the principles are a tool for structuring an inclusive rather than

273

274

ANDREW BAKER

Corporate Governance In the early years of the twenty-first century, the question of how firms are governed rose to prominence on the political agenda following a spate of scandals involving companies such as Enron, WorldCom, Ahold, Vivendi, Hollinger and Parmalat. Corporate governance refers to long-standing questions of how large private enterprises should be governed and structured, how they should distribute and use their financial surpluses, to whom they should be responsible and accountable, and even what function they should fulfil in society. As giant global corporations operating across several continents have emerged over the course of the twentieth century, the impact of such decisions on the livelihood and welfare of billions of people around the globe has intensified. TI1e future savings, investment and pensions of ordinary citizens are bound up with the performance of these corporations as measured by share prices. Such developments have had the effect of widening the constituencies concerned with corporate governance and pushing the issue up the public policy agenda. Several studies have successfully demonstrated how corporate governance is inherently political - reflecting political choices and contestation, with profound distributional implications (Gourevitch and Shinn 2005; Overbeek, Van Apeldoorn et al. 2007). One of the key debates in the corporate governance literature concerns the issue of convergence, particularly toward an Anglo-American or outsider model characterized by the following features: a high reliance on equity finance; dispersed ownership; strong legal protection of shareholders (including minority holdings); little role for other stakeholders such as employees and creditors in company management; strong disclosure requirements; and a liberal approach to mergers and acquisitions. Forces for convergence highlighted by the literature include global investment flows and activist shareholders (Coffee 2002), political pressure from the dominant state, which may suffer negative externalities from divergence (Simmons 2001); international accounting standards (Perry and NolIce 2006),; and pressure and support from Anglo-American financial forces involving the construction of specific international principles for corporate governance (Soederberg 2003). It is the latter of these that is the concern of this chapter.

OECD Principles As corporations have become more global in their operations, they have been subjected to competing regulations, norms and practices

Global Corporate Governance Principles

(Overbeek. Van Apeldoorn et al. 2007). In response. efforts to build a global corporate governance regime have intensified and a variety of global standards and principles have emerged . The centrepiece of these standards is the OECD's corporate governance principles. In 1999 the OECD formulated principles for corporate governance at the insistence of its member governments. and later revised them in 2004 (OECD 2004). The process was distinctive for its wide-ranging outreach. These principles have come to be regarded as 'the international benchmark for corporate governance. forming the basis for a number of reform initiatives. both by governments and the private sector' (Jesover and Kirkpatrick 2005: 127-8). They also became one of the twelve standards and codes for international financial stability introduced after the Asian financial crisis. The OECD principles themselves and the process through which they were formulated have four distinctive characteristics worth reflecting on. The first of these is that the principles represent a compromise between institutional investors from the Anglo-American world and elites in emerging markets. with a few concessions thrown in for Western labour along the way (Rosser. 2008). The nature of the political compromises in the principles have reflected certain power differentials, for example international investor associations such as the Institute for International Finance (IIF) and the International Corporate Governance Network (ICGN) have had their views represented in the actual principles to a greater extent than groups such as organized labour. The political compromise represented by the principles is therefore more heavily tilted in the direction of investor associations pushing shareholder activism and shareholder rights. but political compromise is nevertheless a key defining feature of the principles. Second. the principles were put together through a process based on dialogue, inclusion, social partnership and compromise. An Ad Hoc Task Force on Corporate Governance. consisting of representatives from OECD member countries. and from the World Bank. the IMF, the International Organization of Securities Commissions. and the Basel Committee. and involving occasional appearances from private sector experts. was established to take the process of formulating international corporate principles forward. Views were also sought from the Trade Union Advisory Committee (TUAC) representing Western organized labour. and the Business and Industry Advisory Committee (BlAC) representing Western business associations. Consultations were also held with non-OECD governments. and submissions were obtained from the public via an OECD website. The 2004 revisions to the principles involved a yet more extensive series of consultations. including three major consultative meetings

275

276

ANDREW BAKER

with broad participation; two informal meetings with tives from international labour and for all interested to submit comments of the revised through an Internet submissions received from the of International Federation of Human Rights, the International Metalworkers Federation and the International Federation of Trade amongst others much of the revision of the principles in 2004 was driven OEeD members through the corporate governance particularly the Latin roundtable and a process of continuous critical refleca range of stakeholders which is overseen by OEeD OEeD staff treat the on state-owned enter-

crisis are underway. A final 2009, with the OEeD systems, executive standards and the remuneration of boards focus of this latest review was not to indicate that the and their were culpable and the 2008-9 financial crisis, but to how they can be or and to provide more detailed guidance on the issues to make the surroundlisted above. OEeD staff have the principles as inclusive as In short the have involved a continuous , or a by , process and a range of stakeholders. This process has a resemblance to Sabel's notion of mental that encourages deliberation, reasoning and the active incorporation of very localized information into broader governance processes, as decision learn from and correct one another (Sabel 2004). Benchmarl(s, such as the principles, provide common assembled from information, but are conbeing rebuilt as new is found and efforts are made to identifY the root causes of errors, with inclusive reason and to solve problems the content of the nature of the process

Global

(:IlY'l1llY'ntp

Governance

mises alluded to earlier. Key areas of concern for the principles are shareholder accountability and the responboards, all of which resonate with the Anglosibilities of American model (Rosser A stakeholder chapter was first included by the OEeD then withdrawn on the the Ad Hoc Task threats from the Austrian securing a stakeholder chapter was that two chapters were to shareholder interests the of shareholders and the equitable treatment of shareholders. Those forces connected to the model and the institutional investor community were more in determining the content the principles than the union movement, which suffered a notable defeat in not a chapter included on the behaviour and conduct of on were shareholder interests and the outside single on the form the inclusion of a stakeholder and blockholder have meant that concessions are made to insider models, For stakeholders and urr,rlrc>rc on supervisory as practice ment exercises, In and ambiguous. without

national cultures, preferences. As Jacqueline Best has pointed out ity' can political space for domestic actors and commonly standards, as to how international

or traditions and 'ambiguto manoeuvre in a of principles are

The World Bank and the Reports on the Observance of Standards and Codes Process The extent to which the OEeD principles are reflected in in particular national jurisdictions is assessed by a World Bank reports known as ROSes on the team, which

277

278

ANDREW BAKER

Observance of Standards and The World Bank publish,.."r,,,,..1rc on the extent to which the OEeD's ing individual HH_H/L~" were embodied in different jurisdictions, from 2000 at a rate of about ten a year (IMF I World Bank 2005). For Susanne OEeD's principles on shareholder than other types of place greater corporate governance, the through the Rose process for capital flight and investment strikes are not complied with 2003: there is little evidence that private have the ROSe reports in their investment decisions (IMF I of autonomy in form of a 'learning trying to use 'market discipline', as ministries and central banks after the Asian the are seen as for reform in financial crisis. assessed countries an iterative and reciprocal policy dialogue. In how the ROSe should operate, World Bank officials decided that T'AT'''''T'1rc should act as a development tool to in accordance with develop institutions, the overall macro As a consequence, considerations as development has come to financial governance ROSes. a rationale for The ROSes have become progressively longer and now contain more recommendations and advice, as countries with have entered into the process. that ROSes would be short and pithy, adopt a more diagnostic tool practice to a prescriptive reforms. Market participants remedial tool that also have actively a shorter reports, including a scorecard-style because this could more easily be factored into risk models I World Bank 2005). Quantitative measand annual as demanded by market parby World Bank staff. Bank staffhave the iterative process used to compile for a longer policy dialogue World Bank staff have largely resisted pressure from market actors and institutional investors, while a rather for the corporate govern-

Global

ance ROSC than that envisaged transparency advocates the Asian financial crisis. The ROSCs have come to as a mutual for both assessed countries and assessors, rather than a disciplinary tool of enforcement. The and power relations by the ROSC process are more and than many For ROSCs are authorities retain a power of veto over the publication of the final report, and they are not part of formal World Bank conditionality. Prior to formal publication assessment Bank to attain the approval of the host and a or precedes the publication of a ROSe. The corporate governance ROSCs remains constant at around 80 per cent (IMF f World Bank Nenova 2005) and most ROSCs retain a

the ROSC process takes the of a voluntary health on dialogue and mutual in which both the assessed and the assessors seek to obtain information and while the contents of the detailed for their own distinct purposes. Certain national will to use the ROSC T'Ar,roT'1rc to empower themselves vis-a-vis recalcitrant firms that may be to evade who may be to water down provision or restrict In this the World Bank's ROSC team can become the champion for the local securities commission in particular such commissions are sometimes but to the objective of CUHa..llL1U~ and regulatory fi·amework.

Conclusion that the OECD's governance model of pro .." " , . " convergence toward an governance is overstated. OECD and the World Bank have treated the as a tool mutual, reciprocal and pragmatic dialogue betvveen to facilitate rather than as a tool of ciples actually preserve some consequence of this is that the principles are most the introduction of some very selective and limited American systems, rather than a process

279

280

ANDREW BAKER

References

J. (2005). The Limits Ambiguity and the International Finance. Ithaca: Cornell University Press. J. (2003). Retrenchment: The

Politics of Corporate Governance Reform and the Foundations of Finance Capitalism'. at the of the American Political Science Association, 27 August. Coffee, J. (2002). 'Racing towards the Top? TIle Impact of Cross and Stock Market on International Corporate Governance'. Columbia Law Review

Gourevitch, P., and

J.

1757.

Shinn

The New Global Politics

Political Power and r·~.~~.,~ Control: Governance. Princeton: Princeton

·,v,.",wnrp

University Press. IMF f World Bank

The Standards and Codes Initiative Is it Effective? And How Can It Be Washington, DC: IMF f World

Bank. 'The Revised OECD of Governance and their Relevance to non-OECD Countries'. Corporate Governance 13(2): 127-36.

Kirkpatrick, G. (2009). 'The Governance Lessons from the Financial Crisis'. Financial Market Vol. L Paris: OECD. Nenova, T. (2005). 'A Governance Agenda for Countries'. Contaduria y Administraci6n 217. OECD (2004). 'OECD of Corporate Governance'. Paris: OECD. Overbeek, H., B. van eds. (2007). The Transnational Political et Economy of Corporate London and New York: Routledge. j., and A. Nblke 'The Political Economy of International Accounting Standards'. Review International Political 559-86.

A. (2008). 'The Political of Financial Reform since the Asian Financial Crisis: The Case of Corporate Governance'. Power and Politics after Financial Crises: Markets, ed. J. Robertson. London: Sabel, C. F. (2004). 'Beyond

Foreign Opportunism in

hTI'l,P'Y""ncr

Governance: Experimentalist Organizations, Learning and . De staat van de democratie: democratie voorbij de staat, ed. E. ~u"'~"~u and M. S. D. Ho. Amsterdam: Amsterdam University Press. Simmons, B. (2001). 'The International Politics of Harmonization: The Case of Capital Market . International Organization 589-620.

S. (2003). 'The Promotion of Governance in the Global South: Who Benefits from the New International Standard?' Third World 24(1): 7-27.

Initiative

Global Reporting Initiative HaHna SzejnwaId Brown

Introduction The Global Initiative (GRI) is the best-known set of lines for voluntary worldwide. GRI was created in 1999 two connected to two nongovernmental organizations (NGOs) in Boston through an alliance of multinational companies, financial sector, international and (but not governments). the limited resources, founders, GRI has been (by 2007 over 1,000 and other in structured their sustainability reports along the GRI guidelines), comprehensiveness categories of impacts are reported: social and (by 2009 three successive versions of the supplements). visibility (its annual royalty, heads of international governmental and non-governmental and global prestige example, the formal with the United Nations (UNEP)) and reputation de and Lessidrenska 2009; Brown, de Jong and Levy 2009). these successes, GRI has not reached of a standard and effective source of information firms' social and environmental performance. Competing standards and stakeholders like institutional investors and NGOs have largely not relied upon GRI to push firms for better These demonstrate the limitations of informationbased governance.

History

Goals

GRI rate

on the crest of the debate during the 1990s over corpo(CSR), the for the

PTn,AT'(T"rl

281

282

HALINA SZEJNWALD BROWN

and civil society in the forms of governance Uohn 1994; White Waddock 2004). GRl was until 2002 of a CSR network, member companies voluntarily and committed to voluntary in turn, emerged in 1989 from the Social Investment which was founded in 1982. Through these historical and the and organizations who built GRl was also a descendant of social movements of the 1970s and 1980s. GRI's explicit goal was to harmonize the numerous and sustainability reporting systems used at the and to create access to standardized, comparable and information about performance. Working within institutions and power relations, GRI's template was the US Financial l1'-'-VUH Standards Board (FASB), which GRl in reach

as 'win-win'.

empowerusers of reports to hold companies accountable for their and claims, and by creating an opportunity to influence influential set of rules. Modelling GRI on the familiar system reduced and to the accounting and consulting sectors as a new business opportunity (Brown, de Jong and Lessidrenska 2009). In to these instrumental goals, the GRI institutional entreand also (Maguire, Hardy et al. 2004; A"AVU'-~ creating an influential global based discussion on sustainability performance and I"Ynl",r-r",,, norms. This vision grew out of two widely (1) information and discourse and the financial sector to demand rr..'rn,'Or"::l such are an instrument of private holder are an effective to governance for The offered a much sought-after supplement to the 'commandand-control' and market-based environmental policies of the and 1990s (FIorini 1998; Tietenberg and Wheeler Graham The idea governance was prothe 1990s by the policy, academic and business Forest alike. (e.g. UN Global Compact; Ceres

Global Reporting Initiative

Stewardship Council) (Reinicke 1998; Reinicke and Deng 2000; Glasbergen and 2001; Ottaway 2001; Biermann 2007). In working within structures and power relations the GRl founders to build a new institution sustainable behaviours companies and other organizations worldwide (Brown, de and 2009).

Structure and Activities of GRI as an Institution The GRl Secretariat is a lean in Amsterdam. with the Board of Stakeholder I-JVHLU::" and oversees various groups, Council. There is also a group of that is one of the GRl's problems. Its exclusion of governments precluded access to funding, and after foundaGRl has become and its own de

Development and evolution of guidelines

1----__""'

Preparation and dissemination of reports

I----....Jo>l

\ I

I

I

I I

I

Codes of conduct

Government policies

I

Feedback

- - - - - - +-

Additional influence

GRI

r",,,,(wt1no-

Government policies

Verification

- - -.......,,..

35.1

I

\ \

\ \

Sustainability management standards

283

284

HAL INA SZEJNWALD BROWN

the institution l{"\n,ITH>nT

GRI of the 4,000

reporters who follow the Guidelines and more loosely (mostly large multinational from Europe, the US and Japan) levelled off around 2007 as that market became saturated. Since then, GRI's slower occurred mostly in Brazil, South Africa, Australia and new EU member states. 2007 the Secretariat has also invigorated outreach to SMEs. GRI has created a lively market international CSR consultancies and accounting firms who prepare and reports (e.g. SustainAbility, AccountAbility. and Deloitte&Touche, members of the CSR Some leading international consultancies have also "'H~,,"A" lize this market by developing holder engagement (e.g. M 1000, M 1010 or ISEA The use of GRI by their intended audiences has and however, very low. The shareholder activist responsible investors (SRI) treat GRI r"' ....'{"\r'r" than a principal source Street and major est in non-financial perro'rIIlarlce reports by NGOs, consumer zations, the media and even the competition) has been low. The key problem is that the information in GRI does not meet the very specific but diverse needs its issue-specific social activists to risk assessors ment community, and so on). the at GRI data - partly numerical and usefulness for benchmarking and most criteria (Kolk 2004; Additionally, the uneven quality as to what issues they address deter In short, GRI has not delivered on the standardization, efficiency gains and

Global Reporting Initiative

claim to issue GRI reports as a form of reputation management, brand protection and sustainability management, the latter including various formal standards and accreditation procedures (e.g. EMAS, SA 8000, ISO 14,001 and many others, national and international) (Palenberg, Reinicke et al. 2006). Table 35.1 summarizes GRI's organizational field: its activities and key actors. Three observations emerge. First, there is a strong overlap of actors participating in various areas. Second, the heaviest activity occurs at the supply end of the GRI reporting lifecycle, with very little at the user-end. Third, the most active and influential actors (not counting the GRI Secretariat) are large multinationals, leading accountancies and international consultancies, followed by UNEP and idea entrepreneurs. The latter term denotes individuals who identifY and frame problems and propose solutions. Idea entrepreneurs - who mostly represent international CSR consultancies and accounting firms, large multinational corporations and banks, and UNEP - are highly influential in setting the agenda, building legitimacy for ideas, and influencing policy debates. Collectively, these leading actors fill the ranks ofGRI Organizational Stakeholders and multistakeholder working groups, form coalitions, enter into partnerships with each other and with national governments and UNEP, publish influential joint reports, and influence policy debates relative to CSR and accountability. Through engagement in mUltiple activities in the organizational field, they frame the debate over what matters most and what should therefore be reported, and influence the outcome of any emerging consensus.

Impacts GRI has been a successful institutionalization process by several measures. It has greatly contributed to the popularization of the concept of social impact indicators and materiality. It helped solidifY sustainability reporting as a taken-for-granted standard business practice, and led to the emergence of a thriving industry around it. GRI has institutionalized sustainability reporting as an expected behavioural norm, created a language in which it should be conducted (in particular, the category of social impacts), and criteria by which such reports and the underlying process should be judged. It has also inspired a heated policy debate over whether such reporting should be mandated through regulations. GRI's signature inclusive multistakeholder process for designing the Guidelines, and for obtaining external input in preparing sustainability reports, has become a template for organizations and partnerships worldwide for creating a

285

ACTllimES Adors GRI

**

Secretariat

Reporting

Report verification

**

**

Standards for verification

Use of

MNCs

Accoontandes & international consultandes Idea enlreOirerleUfS

**

** **

Multilateral org: UNEP International associations Investors

**

business

&

markets

'" *1

International activist activist

*7

Governments Or~r;mi7pd

labour

SMEs involvement 01 an actor in an the

moderatellow mvnlVl.mpnt that seems to

of

the entire group at high/moderate involvement by only some members of the group;

Global

pnnri"1rl

AV11"\"""'rl

Kimberley Process

sana I miners. Other initiatives, such as the DDI, were created for addressing these issues. What the Kimberley Process achieved was to raise global awareness. Finally, as mentioned before, the Kimberley Process is a voluntary regime. Hence, the success of the KPCS is dependent on political will as - at the international level - it is not legally enforceable. TIle recent success of the certification scheme is due to great public attention, voluntary leadership of committed countries, and peer pressure among the participants to comply with the regulation. NGOs are vital for ensuring that the Kimberley Process lives up to its expectations. With public attention being diverted to other international crises, the Kimberley Process still needs to demonstrate its long-term effectiveness.

Conclusion The Kimberley Process is an example of how transnational issues can be addressed by involving public and private actors in multistakeholder initiatives. Despite some criticism, the KPCS is now widely considered as a success. One of the reasons for its success has been its flexibility. As a politically binding regime, it started off with very soft requirements. Adopting a 'learning by doing' approach, the Process had the ability to make incremental enhancements whenever participants could achieve a new consensus on a specific issue. It now serves as a role model for other transnational governance initiatives regulating trade with natural commodities. For instance, the Extractive Industries Transparency Initiative (EITI) and the EU's Forest Law Enforcement, Governance and Trade Initiative (FLEGT) have reproduced some of the properties of the Kimberly Process.

References Berda!, M., and D. M. Malone (2000). Greed and Grievance: Economic Agendas in Civil Wars. Boulder, co: Lynne Rienner. Bernstein, L. (1992). 'Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry'. Journal of Legal Studies 115: 21. Collier, P. (2000). Economic Causes of Civil Conflict and Their Implications for Policy. Washington, DC: World Bank. Even-Zohar, C. (2009). 'Ian Smillie quits Kimberley Process'. Diamond Intelligence 28 May 2009. Global Witness (1998). A Rough Trade: The Role of Companies and Government in the Angolan Conflict. London: Global Witness.

307

308

THOMAS HALE

Grant, A. and 1. (2004). 'Global Governance and Conflict for Clean Gems'. The Diamonds: The Kimberley Process and the Round Table 93 July): 385-401. C. (2007). 'The Power of Socialization: Process'. Business and Politics Ind ustry in the Kantz, C. (2008). 'Precious Black Gold and the Extractive Industries: of Multi-Stakeholder Initiatives'. Accountingfor the Insti tutional International Relations London School of Economics. Kimberley? Conflict Diamonds and Africa Canada (2006). Paper Tigers. Ottawa: Africa Canada. Schefer, K. N. (2005). the Trade and Human Interface with the wro Waiver for the Process'. Human Rights and International ed. T. et al. Oxford: Oxford University Press. 1. (2004). 'Climb Every Mountain: Civil Society and the Conflict London: Diamonds Human ed. P. Smillie, 1. (2005). 'Lessons from the '_~ Process'. Profiting from Peace: the Resource Dimensions War, ed. K. Ballentine and H. Nitzschke. London: Lynne Rienner. C. (2004). Conflict Diamonds: The Process Certification Scheme'. International 11( 4): 697-708. H . U U .....

Marine Stewardship Council Thomas Hale Recent studies that will lead to the global collapse of species on which humans depend for food and livelihoods by 2048 (Worm, Barbier et aL This bleak outlook poses a serious concern for consumers, companies, and fishermen. The Marine Stewardship Council (MSC) is a certification body that sets environmental standards for Fisheries that meet the MSC may sell their under the MSC allowing customers to distinguish between sustainable and non-sustainable fish. In way the MSC serves as a voluntary, market-based mechanism. As of 2009, some 7 per cent world's edible fish sold certified under the programme, with a retail value of apPHJXlIIli:llelY billion (MSC

I

r

r,

I

f

,

I

Marine

IPlA,'IITtlUlm

Council

Origin The MSC enjoys a somewhat improbable in by the multinational food Unilever and World Wide Fund for Nature (WWF). The since 1999. WWF drew from its in creating the Forest (FSC), a similar programme in the sector, to generate the structure and mission of the organization. WWF pushed for the creation of MSC due to failure the multilateral governance International tion of fisheries dates at least to Ancient Rome (Allison 2001). "u,p",'r have centred around the UN Convention on the Law of the Sea (UNCLOS) and its related the FAO, and These latter bodies have fisheries some are to some are independent. UNCLOS, agreed in 1982 and in force after an enormous range of marine issues. most 0."",,,,,,,, nations a 200-mile exclusive economic zone enjoy to exploit marine resources, The FAO is the forum for fisheries policy within the UN CCll1Cl1L>

Under two treaties the Promote with International Conservation and ment Measures by Fishing Vessels on the Seas United Nations for the Implementation of the Provisions of the United Convention on the Law of the Sea ofl0 December 1982 to the Conservation and Management of Fish Stocks and Migratory Fish Stocks (1995). The FAO has eXltenLSl'v'e and Code of Conduct for Fisheries which is meant to a model for but not to bind them to practices. Adoption the CCRF have been promoted via Plans of Action on issues ranging from seabird conservation to shark conservation. Other major environmental also bear on most notably the Convention on Diversity through the 1995 Jakarta Mandate on Marine and Coastal and the on the International Trade of These did not for groups like WWF and Unilever. Green groups like WWF had long been concerned with the consequences of overfishing and were frustrated with efforts to push fisheries in a sustainable Unilever, which boasts inC'UC');,-

309

310

THOMAS HALE

about 20 per cent of the American and European frozen fish of on its business was also concerned about the UL~J~,""L, which relied heavily on frozen In the late 1990s many whitefish populations, such as were in serious decline, threatening the continuance of Unilever's low-cost frozen fish busiScott Burns, director MSC, 8 2007). lobbying to, create the FAO Code of Conduct, nongovernmental (NGOs) largely concluded that 'effective of is the exception rather than the rule' (p.c., for NGOs was less their inability to convince (1''''''''T'-n and more the of the measures that could achieved through a state-focused strategy. from and of fisheries standards has proven difficult. Moreover, VIWF's with the FSC gave it a clear model and base of knowledge on which to build the MSC. from the outset VIWF believed it needed to with a in order to create trust with Unilever, though in corporate bilityprogrammes, found VI/WF's independence an attractive enhancement to its VIWF's schemes up to with the FSC made it concerned that the MSC would also face competition. the has criticism both environmental groups abated following at the MSC) and some fisheries that the certification procedures were too costly. the MSC seems to have been able to prevent this discontent from its coalition, in part due to the initiative's market in Europe and the 2006 commitment the massive retailer Walmart to source all its US seafood from MSC fisheries within five years.

How the MSC Works The MSC is a kind of 'eco-label' - that is, a tool that is U.C,;H};,H"U. to consumers reliable information about the environmental quality of a product. The MSC sets standards tha fisheries must meet to be considered sustainable, and then requires independent certifiers to confirm that a meets standards before it may use the MSC Consumers provide the 'enforcement' co:ml)OIlerlt behind the standards, by favouring MSC products over non-certified alternatives.

Marine

.,>u'wara,n.1TI

Council

Standards The MSC Principles and Criteria Le. the standards which it fisheries - draw from the FAa Code of Conduct Responsible and were formulated in with various stakeholders 1996 to 1999. The three core are: 1. A fishery must be conducted in a manner that does not lead to and, for over-fishing or depletion of the must be conducted those populations that are in a manner that demonstrably leads to their recovery. 2. Fishing operations should allow for the maintenance of the structure, productivity, function and of the ecosystem (including habitat and associated and related species) on which the fishery 3. The fishery is subject to an effective management system that respects local, national and international laws and standards and incorporates institutional and frameworks that use of the resource to be and sustainable.

Fisheries that wish to sell their be accredited by a certified note that the MSC does not itself

or asked to take specific steps to come with MSC standards. Certified fisheries must ensure that their are fully in order to use the traceable throughout the entire chain MSC guaranteeing sustainability ocean to Certification is valid for a five-year and then must be renewed. of a Individuals who take issue with the have a fifteen-day period in which they may file an VU~\..L

firms. behaviour due to the lack of lation nrr\Cfr"T'n A research examining the intent and motivation of chemCare found that ical industry's social implementation of one of was opposing stricter and more 2007), Rather than a proactive Responsible Care has seen by some as an initiapublic health tive to oppose support for stronger and more and environmental and of chemical the National A US study Center found that, since Care accidents had not declined at member facilities and Bauler 2004). The study that the number of accidents increased in 2002, the chemical claimed to have increased and measures in the wake of 11 2001.

References

the Chemical DNV (2010), RC14001 &

Der Norske Veritas.

Rugmark Give!, M. (2007). 'Motivation of Chemical Industry Social Responsibility through Care'. Health 81(1): 85-92. A. Stanford, CA: Stanford University Press. Howard, j., j. Nash et al. (2000). 'Standard and Smokescreen? Implementation of a Voluntary Environmental Code'. California Management Review 42(2): 63-82. TCCA (2008). Care Status 2008. Brussels: International Council of Chemical Associations. ICCA (2009). Annual Review 2008-09: Worldwide Voice of the Chemical Industry. Brussels: International Council of Chemical Associations. A.. and M. Lenox (2000). Self·Regulation without Sanctions: The Chemical Industry's Responsible Care . Academy of Management Journal 43(4): 698-716. Phillips, D. (2006). 'RC 14001: An Integrated Digest May. Approach'. Prakash, A. 'A New-Institutionalist on ISO 14000 and Care'. Business and the Environment 322. 'Responsible Care: An Assessment'. Business & Society 39(2): 183-209.

Purvis, M., and J, Bauler (2004). Irresponsible Care: The Failure Industry to Protect the Public from Chemical Accidents. United States Interest Research Education Fund. and I. Montiel (2005). 'When Are Ramus, Policies a Form of Business & Society T. (2003). Care at 15 Years'. Environmental Science &

43

Rugmark Mathias Koenig-Archibugi

Rugmark1 is a market-based certification mechanism for hand-made carpets produced in India, Nepal and which is by a private governance structure that spans and developed countries. description is a transnational federation Rugmark production sites and provide assurances that nO labour has been in making Rugmark-labeUed carpets. Part of the IThis chapter covers Rugmark's structures and activities from its to 2007.

333

334

MATHIAS KOENIG-ARCHIBUGI

fees and importers is used for education and social welfare activities in the carpet-producing districts.

History Indian activists who, in the early 1980s, ~~,a"'~'fo,a~ child in a number of economic sectors, the By the early 1990s the Asian Coalition on Child Servitude (SACCS), Kailash LJH"H":U links with several German religious human organizations and with them he a consumer awareness on child labour. Initiatives in flanked in other Western National Consumers League and the International Labor in United Anti-Slavery International in the United Kingdom, and the India Committee of the Netherlands. Activists believe that the sales 'India's AV1C\A't'jyears, from exposure of abusive child labour involved in their producdeclined to 52 million in 1993: These undesirable from the point were severely hitting the ,H\.tU»U an essential source income. The from discussions that involved a range of actors: the were a group of Indian AV1">At',Al0" who were concerned about markets and formed a Carpet Without Child Labor (CMAWCL). the a programme of the German Agency, and SACCS. After initial discussions, a number of important and exporters and, more India's official Carpet L.'~'~N~" Promotion Council abandoned with CMAWCL, IGEP and which continued discussions and the labelcalled Rugmark. It was foundation status by the in September 1994. Nepal was created in December 1995 and 1997.

Structure and Activities consists of six distinct that work under a common Rugmark International. Three are

Rugmark

located in

nature, each national office ent way. in importing countries are, above all, Foundation India has two The functions: to run a without child in carpet-producing communities. There is some ambiguity the by the Rugmark label. Rugmark no child labour can take in knowing that a child's fingers did not make carpet' (www.rugaccessed 27 July 2006) and SACCS label called the RUGMARK the buyer! child accessed 27 July are allowed to work and thus by Rugmark rules. in consumer countries tend to be more cautious in their description the message the label. Rugmark Foundation USA and UK now more claim that 'the RUGMARI( assurance that no illegal child of a or rug'.

Impact of Rugmark The effectiveness of is not least because a range of criteria can be used to assess it. Rugmark been able to a number of 'internal' objectives, notably to increase the recand of and to increase the numbeT of number of the effectiveness as solving the problems that creation. To the extent that and initiative nT',nH'rr them from adverse consumer reaction to publicity about child labour in their industry, there are that it may have had some success, since sales of appear to be CrT',""',.",T' than the overall trend Annual Report more uncertain in India has been and

335

336

MATHIAS KOENIG-ARCHIBUGI

that labelled carpets are not produced with illegal child labour. Rugmark-registered looms are dispersed widely across a myriad of villages in the carpet belt, and inspectors face various logistical difficulties (bad roads, lack of street and house numbers in remote villages, etc.) that limit the number of looms they are able to inspect in a day. Rugmark India claims to have inspected 176,881 looms between 1995 and March 2006 (www.rugmarkindia.org!about!facts. htm, accessed July 2006). This amounts to an average of about 16,000 per year. If the looms were selected randomly, each of the registered 32,000 looms is likely to be inspected at most once every two years. Even assuming that the inspectors can rely on precisely updated lists of the looms that are active at any given time (which is doubtful), and that they account for half of all registered looms, each active loom is only likely to be inspected approximately once a year. The rarity of inspections and the difficulty of performing 'surprise' visits in the rural villages where most carpet looms are located have led many commentators to dismiss the claim that inspections can be performed effectively (e.g. Panagariya 1996; Betz 2001). This scepticism is shared by several prominent child rights activists operating in the carpet belt, such as Shamshad lilian and Swami Agnivesh. Moreover, a substantial number of Rugmark-certified looms are located outside the core carpet belt in eastern Uttar Pradesh, and their likelihood of ever being inspected is even lower. In addition, the ability of Rugmark inspectors to verifY whether children working on family looms (work that is allowed by Indian laws and Rugmark rules) actually attend school, and to ascertain whether minimum wages are paid to adults, is limited. However, a study conducted by the Institute for Human Development in 1999 and based on a sample of 5,545 workers showed there is a substantial difference between Rugmark looms and non-registered looms in the extent to which they are operated by hired child labour: only 1 per cent of workers in Rugmark looms are hired (and thus illegally working) children, while their number in unregistered looms is 7 per cent (Sharma, Sharma et al. 2000). This could suggest that the deterrent effect persists despite the low likelihood that hired child labourers will actually be discovered on looms. On the other hand, the proportion of the total workforce consisting of children working with their families is about the same on Rugmark looms and on non-registered looms (16 per cent). However, these data do not necessarily show that Rugmark has contributed to reducing the number of children employed in the carpet industry (as implied by Rugmark's promotional material - for instance, the 2004 Report of Rugmark USA states that 'RUGMARK's system of monitoring has been remarkably successful, with the

337

numbers of children on the looms steadily decreasing. estimate that child labour on South Asia's carpet looms has 1 million to 300,000 since the launch of RUGMARl( nine years Economists modelling of product that children may simply switch from labelled to unlabelled looms. For instance, Panagariya (1996) warned that: The separation of carpets the label need not move children out of the carpet numbers. It could create dual markets: a market for carpets made by children and a market for carpets made by adults. Thus, the made with child labour could continue, wages paid to children would decline due to the decrease in the of carpets made them.

initiatives aimed at children from are arguably based on a concern the children's quality rather than simply on the consumers' distaste for goods their work. Even if a scheme were to succeed in its aim by itself this does not an improvement in the of the children. It is necessary to consider the effects certification and welfare of children programmes of Rugmark on the in the carpet does not have a for children rOT·Tn.""" on the looms it moreover its impact may extend to non-certified looms, and there are no systematic data to assess this aspect of Rugmark's effecwelfare effect of Rug mark would tiveness. An evaluation a of the conditions of a representative of children whose working and status may have as a result of the existence of Until more systematic evidence is at least to some extent on For instance, Brown (1999) builds an economic model of child labour and concludes that: 'from an cal point of view, product L',p

References Asia Monitor Resource Center (1998). The Working Conditions of the Toy Industry in 1998. AMRC. Axelrod, and R. Keohane 'Achieving CoopleratlO,n and Institutions'. World Politics 38(1): 226-54. R. Sozialstandards durch Private Governance: AM>tw.?r;r"" in der Baden-Baden: Nomos. Biedermann, R. (2009). 'Private Governance in der und zur Durchsetzung einer Branch . Zeitschrift Wirtschafts- und Unternehmensethik 10(l}: 18-36. ICTI CARE Foundation (2004). 'International Council of Toy Industries' Code of Business Practices. The CARE Process'. Council under the of the Federation of Kong. Kindleberger, C. (1973). The World in 1929-1939. and Los luc>r~1T,,(T of California Press. U., and E. Strohscheidt (2009). A a Short Forward. Discussion paper of the German on the ICTI CARE Process. Aktion fair at Koplin,]., S. et a1. (2007). into Supply - The Case Policies and Supply Processes in the Automotive of . Journal Cleaner Production 1053-62. D. A. (2008). 'The Ethics of Global Chains in China ofEast and West'.Journal Ethics 113-20. M., V. G. dos Santos eta1. (2009). 'The Contribution of Environmental and Social Standards towards in Supply Chain Governance'. Journal of Business Ethics 89(4): 509-23. Olson, M. Die Logik kollektiven Handelns. Kollektivguter und die Theorie der 3rd edn. Mohr-Siebeck P. (2003). 'Labor Standards in the Global Economy: Issues for Investors'. of Business Ethics 223-32.

349

350

THOMAS HALE

Sethi, P. (2003). Setting Global Standards: Guidelines for Creating Codes of Conduct in Multinational Corporations. New Jersey: John Wiley and Sons. Stein, A. (1982). 'Coordination and Collaboration: Regimes in an Anarchic World'. International Organization 36(2): 299-324. Tiemann, R. (1999). Ethische Branchenstandards: Ein Losungsweg fUr Unternehmen aus moralischen Dilemmata. Munich/Mering: Hampp.

46

United Nations Global Conlpact Thomas Hale The Global Compact is a multi stakeholder initiative through which transnational corporations pledge to uphold ten principles relating to the environment, labour standards, human rights and corruption. Sponsored by the United Nations (UN) and including a range of business, non-governmental, labour, and governmental representatives, the Compact aims to facilitate the adoption of social and environmental norms into global business practices through learning and dialogue. The Global Compact is the largest corporate social responsibility initiative in the world, though critics have questioned its effectiveness and accused it of aligning the UN too closely with business interests.

History and Purpose The Global Compact was announced by UN Secretary-General Kofi Annan on 31 December 1999 at the World Economic Forum in Davos. Annan called upon the assembled business leaders to uphold social and environmental principles as a way to underpin the global economy with shared social values. The UN, he pledged, would work collaboratively with transnational corporations and other stakeholders namely nongovernmental groups, organized labour and governments - to make responsible social and environmental practices part of global business standards. The Compact represents a new phase of the UN's engagement with business. During the 1970s and 1980s developing countries made efforts to regulate transnational businesses through the UN. While opposition from the developed world stymied these efforts, many elements within the UN continued to regarded transnational

United Nations Global Compact

corporations with suspicion due to their impacts on human rights, the labour standards and development. were equally of UN efforts to businesses, regulate them. The stated is to recast this one (Kell and Ruggie 1999) through a responsible in promoting UN prinIn this view, turning from a 'command and control' ciples and regulatory - for which the UN had neither the mandate nor the implementation to a cooperative framework the UN's greatest normative authority and convening power (Kell, Slaughter et a1. 2007).

How the Global Compact Works executive In order to the Compact the a business must send a letter to the UN stating the company's to the principles. The company then is expected to set 'in motion changes to business so that the Global and its principles become of strategy, culture . Such aim to ensure that and also u«u,-,up; "'''JV''''' Compact secreare published on website. Companies that to report are labelled 'inactive' and may be de-listed from the The Global is distinct most corporate codes conduct, schemes or other social responsibility initiatives. Instead of binding practices, the Compact is a vehicle through which their commitment to ten universal values derived from UN The idea is that the to encourage companies to and environmental and a learning forum to build their capacity to those responsibilities. Beyond the ten the Compact has promoted optional, more mandates in areas like climate change and water. It has also companies to with labour groups on a global basis. in three ways. The Global aims to promote the 'communications on on the website are meant businesses can use to learn each other's experiences. ::>elCOlIQ, the Global Compact hosts meetings in

351

of internationally

Principle 3: businesses should uphold the freedom of association and the to collective Principle 4: the Principle 5: the

forms of forced of child

human

recognition of the

compulsory labour; and

Principle 6: the elimination of discrimination in

Ci:>liJV.LHj-'VUUU'-UA,J

381

382

CHARLOTTE STRECK

2010-12 will be billion for the of a further $100 billion a year by be mobilized a variety of sources. The Accord establishes two bodies to assist with the of the .. ",u""",,,, commitments: a Panel under the COP to study the implementation of HHau...."""'" provisions, and the Green Climate Fund. The draft "'-"-VI.lal.Hn text that was not in Copenhagen further of a Finance Board for the finance mechanism under the Convention. 3 The Board would function as a body for the financing system; it would be accountable to the COP and would recommend rules for a balanced allocation of funds and guidelines to A Green Climate Fund would then be created by the COP as the main operational under the direct access to funds and with developed and proposed governance structure would the current one, regarding the GEF. to the mobilization of financial resources, the main of the text is on sector funding. While there is limited that the sector will be essential to financtechnology, and the needed to reduce UNFCCC remain of nonstate actors. If anything, in the months that led to the Copenhagen climate conference in December 2009, played down market solutions, private sector finance, or The Copenhagen states that wide of sources, and private' but reduces the reference to markets to a line. Private funding incentives. If such incentives are not set they will have to be constructed the national implementation of mitiin particular appropriate developing The the Kyoto Protocol proves how

Accord,

The

state

3FCCQCPj2010j2,11

2010, Annex III.

Financing Mechanisms Jor Climate Change Mitigation

the time of wri ting, it is certainly lacking due to the discrepant positions of states party to the UNFCCC. The recent climate negotiations have also seen a renaissance of the state and public finance, with the private sector playing little role in Copenhagen. Against this background and the absence of a strong international climate agreement, it is likely that single countries will enact financing schemes to reduce emissions on their territory, even in the absence of binding international commitments. Such a scenario might lead to a progressive polycentric approach in climate change actions, triggered not only by states but also by sub-state entities (Ostrom 2009). It is almost certain that local action rather than international mechanisms will provide a testing ground for new implementation arrangements that may give direction to international climate governance. This can create trust and examples that in the end will facilitate the ambitious climate regime needed to stabilize global temperature rise to not more than 2 degrees Celsius.

References Boisson de Chazournes, L. (2005). 'The Global Environmental Facility (GEF): A Unique and Crucial Institution'. Review of European Community & International Environmental Law 14(3}: 193-20l. Figueres, c., and C. Streck (2009). 'Enhanced Financial Mechanisms for Post 2012 Mitiga tion'. Policy Research Working Paper 5008. WaShington DC: The World Bank. Available at econ.worldbankorgjexternal/defaultj main?pagePK=64165259&theSi tePK=4693 72&piPK=64165421 &menuPK =64166093&en ti tyID=000158349 _2009072108207. GEF (2006). 'GEF Strategy to Enhance Engagement with the Private Sector'. GEF Council Meeting 6-9 June 2006, Agenda Item 23, GEFjC.28j. GEF (2009). 'Future Strategic Positioning of the GEF'. GEFjR.5j7/Rev.l, 2 March 2009. Green, J. F. (2007). 'Delegation to Private Actors: A Study of the Clean Development Mechanism'. Institute for International Law and Justice, New York University. Available at www.iilj.orgjpublicationsjESP52007Green.asp. Heggelund, G., S. Andresen et al. (2005). 'Performance of the Global Environmental Facility in China: Achievements and Challenges as Seen by the Chinese'. International Environmental Agreements 5: 323-48. Kingsbury, B. (2007). 'Environmental Governance as Administration'. Oxford Handbook of International Environmental Law, ed. D. Bodansky, J. Brunnee et al. New York: Oxford University Press. Kingsbury, B., N. Krisch et al. (2005). 'The Emergence of Global Administrative Law'. Law and Contemporary Problems 68: 1-15. Meijer, E. E. (2007). 'The International Institutions of the Clean Development Mechanism Brought before National Courts: Limiting

383

384

ANDREW HARMER AND CARLOS BRUEN

jurisdictional Immunity to Achieve Access to justice'. NYU

of

International Law and Politics 39. and 1. Gomez-Echeverri

'The Reformed Financial Mechanism of the UNFCCC: A Building Initiative Ostrom, E. 'A for with Climate -'''~''J-,­ no. WPS 5095. Available World Bank Research Worldng at http://econ.worldbank.org. Piiion Carlarne, C. (2008). 'Good Climate Governance: a Fragmented ofInternational Law Away?' Law & Policy 30(4): 450-80. N. Bird et a1. (2008). New Finance for Climate and the Environment. DC: Heinrich Boell Foundation and WWF. Streck, C. (2001), 'The Global Environmental - A role model for global environmental , Global Environmental 1(2), pp.71-94. C. (2005). 'Governments and Networks: Chances and a Missing Strategy'. A Handbook of Globalisation and Environmental Policy. Cheltenham, and Northampton (USA): Edward Publishing. c., and j. Lin (2008). Markets Work: A Review of CDM Performance and the Need for Reform'. Law: 409.

UNFCCC (2008). Update on Investment and Financial Flows, December 2008. Bonn: UNFCCC. World Bank (2009). 'Sta te and Trends of the Carbon Market 2009'. Available at web.worldbank.org.

Global Alliance

Vaccines and Immunisation

Andrew Harmer and Carlos

The Global Alliance for Vaccines and Immunisations (GAVl celebrated its tenth at the World Economic Forum in 2010, following a decade of vaccine for grammes since 2006, health systems strengthening Launched on 31 January 2000, this innovative public-private ship was largely creation of players

Global Alliance for Vaccines and Immunisation

the top level of the international health community.1 It succeeded earlier international child health programmes - such as the Taskforce for Child Survival and the Children's Vaccine Initiative (CVI) - in the advancement of immunization. GAVI's achievements are impressive. Between 2000 and 2008, GAVI disbursed approximately $2 billion to countries for vaccines, immunization programmes and HSS; it vaccinated 51 million children against diptheria, tetanus and pertussis; protected 213 million children with new and underused vaccines; and immunized 192 million, 42 million and 36 million children against hepatitis B, Haemophilus influenzae type b, and yellow fever, respectively.2 How it has achieved these results is the subject of this chapter. In the following pages we review three innovations that distinguish GAVI from orthodox approaches to immunization: its governance structure; its cultivation of innovative financing for immunization; and its recent support for HSS. For each innovation, we synthesize findings from recent evaluations of GAVI to illustrate where the partnership is performing well and where further reform is necessary.

Innovation in Governance Structure GAVI was initially an unincorporated public-private partnership hosted by UNICEF. Until 2008, it had a dual governance structure: an Alliance Board to steer the partnership, review country funding proposals and make recommendations to its financing arm, the GAVI Fund; and a Fund Board responsible for attracting tax-deductible Key actors advocating and driving the formation of GAVl included the Bill and Melinda Gates Foundation, the Programme for Appropriate Technology in Health (PATH), the International Federation of Pharmaceutical Manufacturers Association (IFPMA), the World Bank, the US Agency for International Development, World Health Organization (WHO) and the United Nations Children'S Fund (UNICEF). Other bilateral donors, civil society organizations and low-income-country governments were either less prominent in the early stages ofGAVl's formation or else became involved at a later point, though buy-in from relevant constituencies in some countries remains a problem. For a more detailed historical account, see Muraskin (2002, 2004). 2GAVl Alliance (2008) 'Achievements: 3.4 Million Future Deaths Prevented by GAVl since 2000'. URL: www.gavialliance.org/resources/15_EN_Achievements1_finaL2.pdf(accessed 5 February 2010); GAVl Alliance (2009) 'GAVl Disbursements to Countries 2000-2008 as at 31 December 2008'. URi: www.gavialliance.org/performance/commitments/index.php (accessed 21 February 2010). 1

385

386

ANDREW HARMER AND CARLOS BRUEN

______ J

,

51.1

GAVI Alliance stTIlcture.

Confusion over and led to a governance in 2008. TIle two Boards were merged but of the new Board's members remained independent of the to ensure that a significant voice in strategic decisions conflicts (see figure ~u~,,.,,,u of the Board also took its inspiration from the private as GAVI's Director and Public Partnerships board is not based on tion but on individual (Adlide, Rowe et a1. 2009). GAVI describes its new, unified Board as 'a forum balanced '-U~"'''''h' innovation and partner collaboration', which comboth public private sectors. expertise over tion, and despite the partnership's claim to value from civil it currently has just one representative from civil society on its Board. and one Alternate as 2008 Alliance, 'The GAVI Alliance UVUG.UVL":"

UC\..L".VJ,r<JlHIJlUL15

Global Alliance for Vaccines and Immunisation

Unlike traditional or bilateral programmes for GAVI was established with a small Secretariat and lean central country presence. GAVI engages at the Interagency Coordination Committees and Health Sector Coordination Committees (HSCCs). These are the coordinating bodies through which GAVI and GAVI also relies on technical inputs, and evaluations ofICCs noted that provide adequate technical support to and transparency issues and other weakto reduced partner involvement and et aL 2004). Despite these initial shown to function well in some regions and instance with to information sharing and coorGAVI applications. Yet challenges r"n of the very few that that have looked at the of UNITAID's funds and contributed to reductions in prices such as, for antiretroviral drugs In this with the Clinton foundation to lower prices ARV (Bowen, Palasanthiran et al. 2008: The CHAI/UNITAID collaboration has resulted in a reduction of prices ARV from $200 to $60 per year per United Nations on HIV/AIDS (UNAIDS) considers UNITAID as a 'major role' in scaling-up treatment programmes and the prevention mother-to-child transmission 2008: 136). It is still uncertain whether the pool and will be an effective tool for essential medicines. Even though several companies have their to joining such a pool, statements by individual express their reluctance and as such an instrument. Merck, stated that 'patent pools may playa role in accelerating the combination therapy in specific areas' but that 'they the of access to medicines' 2009). Even though see the UNITAID initiative as an toward closing the 'accessibility gap to life-saving drugs', admit that UNITAID 'is a promise' Kohler et al. 2010: 25). In general, both academic literature about UNITAID and documents the governance or impact of UNITAID are very sparse and de Lemos 2006). This might be related to UNITAID's character as a rather than policymaldng institution, whose main is to liaise with ance and disburse funds for their An,ar'lt", that other facilities such as, most notably, the International (IFF) Immunisation have attracted much more there appears to be an acute need to UNITAID's work in the context of and in to other global health financing institutions. d l l CH=L

References Bermudez, J. (2008). 'UNITAID: Innovative to Scale up Access to on Research for Health, ed. OGFo Medicines'. Global Forum: Paris: OEeD.

UNITAlD

A., P. Palasanthiran et aL (2008). 'Global in the Development and of Paediatric Antiretrovirals'. Today 13(11/12): 530-5. Chee, R. Fields et al. (2004). Evaluation MA:Abt P. (2003). 'Patents and Medicines: the between TRIPS and the Human to Health'. International Affairs 79(1): 139-60. House of Lords (2008). 'Diseases Know No Frontiers: How Effective Are in Their 1st of Session 2007-2008, ed. Seal London: House of Lords. Merck (2009). 'Statement on UNITAlD Patent Pool'. Available at merck.

2010). Morris, K. (2008). 'Global Initiatives to Promote Wider Access to Medicines'. Lancet InfectiOUS Diseases 535. F. W. Governing in Effective and Democratic? Oxford: Oxford Press. C, and G. de Lemos (2006). 'UNITAlD: Innovative and Collective Financing System for the Fight against ADS and Tuberculosis'. Medicine 583-4. UNAlDS (2008). 2008 Report on the Global AlDS EpidemiC. Geneva: UNAlDS. UNITAlD (2008). '2008 Annual Report'. Available at www.unitaid.eu/ images/news/annuaLreport_2008_en/pdf 25 February 2010). UNITAlD (2010). 'Achievements'. Available at www.unitaid.eufen/ Achievements.html 25 2010). J. C Kohler et al. (2010). a Dream: Policy Goals Related to Improving Drug Access'. Open AlDS Journal 4: 25-7.

399

Index

Page numbers in italics refer to tables. n indicates footnote. Aarhus Convention 317 Abbott. K. W. and Snidal, D. 20, 22, 39 accounting see International Accounting Standards Board (lASB) Adlide. G., et al. 386 Africa conflict diamonds and Kimberley Process (KPCS) 302-3 , 305. 306-7 environmental compliance (INECE) 99-100 health initiatives 164-5. 192-3 multinational enterprises (MNEs) 319-20 African Development Bank (AIDB) 123-4.131-6 AlDS/HIV see Global Fund; UNITAlD Albert. M. 144 Alexander, D. 190 Alexander. K. R.• et al. 39 Anheier. H. K.. et al. 8 Annan. K. 350 antitrust agencies see International Competition Network (ICN) arbitration bodies 14, 15-16, 115-16 see also commercial arbitration;

specific bodies Asian Development Bank (ADB/ AsDB) 72n, 123-4, 131-6, 205 Asian financial crisis (1997/8) 51.52, 53. 56,275,278 Asmal. K. 202 Auld . G. L.. et al. 271 Aylward. R. B., and Linkins, J. 170

bank regulation see Basel Committee on Banking Supervision (BCBS); Financial Stability Board (FSB) ; independent accountability mechanisms (lAMs): regional development banks; Joint Forum on Financial Conglomerates Banl