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Addis Ababa financing conference: Will the means undermine the goals?

As the co-facilitators of the Third Financing for Development Conference, to be held in Addis Ababa (Ethiopia) coming July released the first draft outcome document for negotiations (“Zero draft” or “the Draft”), RightingFinance issued a human rights assessment of it.

A key message emerging from such thorough assessment is that, without significant work on the core chapters, the agreement to emerge from Addis Ababa will frustrate the high expectations set for reaching the Sustainable Development Goals (SDGs) that are at the core of the new development agenda.

For almost four years, the United Nations and its member states have been engaged in negotiations and consultations leading up to the adoption of the development agenda that will replace the Millennium Development Goals. Last year, an extensive process by a working group at the UN put forward the 17 Sustainable Development Goals that will embody that agenda, and it is widely anticipated that they will be adopted in their current form in September.

Civil society has been demanding that the goals be aligned with international human rights law, and the resemblance between several of the goals and human rights commitments bears witness to that effort. But civil society organizations have also said repeatedly that alignment with human rights need not just apply to the goals, but also to the means to implement them.

One of the main tasks of the Third Financing for Development Conference is precisely the development of such means of implementation. But the assessment of the Draft based on international human rights law and principles revealed serious flaws that will need to be corrected in the coming negotiations or risk the means of implementation undermining all that is worthy of support and aligned with human rights in the SDGs agenda.

The examination carried out by RightingFinance covered the chapters on Domestic Public Finance, Domestic and international private finance, International Public Finance, International trade, Debt, Systemic Issues and Data and follow up.

RightingFinance expressed concern that the current draft seems to depart from the notion of a Global Partnership for Sustainable Development among Northern and Southern countries that was at the core of the Monterrey Consensus and Doha Declaration (on Financing for Development, 2002 and 2008 respectively). There is a difference between a partnership of governments and the notion the Draft now contains that “the fundamental responsibility for organizing this global partnership lies with governments.” Other formulations are bolder in this direction, like when the document refers to the need to rely primarily on domestic public resources, supported by international cooperation and partnerships” [to achieve certain SDGs].

The Draft often espouses the notion of public policies as needed to provide an enabling environment, policies and incentives for the private sector to “do the right thing,” but it never uses in that context the word “accountability.” In fact, it shies away from any attempt at strengthening the obligations of the private sector in a way commensurate with the role it expects it to play in financing, by for instance neglecting any support to the ongoing efforts to develop a binding instrument on the obligations of transnational corporations in regards to human rights.

Another example is the rhetorical commitment to support small scale food producers, which is accompanied by reference to the Responsible Investment Principles. This instrument was rejected by civil society precisely because it did not incorporate safeguards for human rights and sustainable food systems. A more suitable instrument for that would have been the “Voluntary Guidelines on Responsible Governance of Land, Fisheries and Forests,” which receives no mention.

By the same token, the Draft commits to “sustainable infrastructure” but it then endorses the G20 efforts on investment in infrastructure which are centered on large scale projects and seriously flawed from an environmental and social safeguards perspective.

While paying lip service to gender equality, there is a strong tendency towards the instrumentalization and commodification of women to improve profitability and competitiveness of business, a dangerous departure from recognizing the inherent entitlements of women as full and equal citizens and subjects of human rights.

Seven years after a global financial crisis that severely impacted human rights worldwide, and with the possible exception of credit rating agencies, the Draft lacks an honest assessment of the extent to which ongoing efforts on financial market regulation are stalled or even backtracking. For instance, addressing food price volatility requires use of effective position limits on traders, but efforts both in the US and European side are on a path to set position limits at levels that will make them ineffective. Ending “too-big-to-fail” financial institutions will not be achieved without reforming the structure of the banking sector that allows speculative-driven trading arms to be entangled with the more traditional deposit-taking and loan-making arms. But reforms in such direction, even in watered down forms such as the US “Volcker rule” continue to be postponed.

A positive aspect, on the other hand, is the Draft’s recognition that “there are limits to how much governments can individually increase revenues in our interconnected world. We thus commit to a global campaign to substantially reduce international tax evasion through more concerted international cooperation.” This is in line with the Special Rapporteur on Human Rights and Extreme Poverty statement that “States are undoubtedly hamstrung in their efforts to enact progressive taxation and combat illicit financial flows that could combat inequality and resource better economic, social and cultural rights realization.”

For the purpose of overcoming the obstacles developing countries have in raising adequate levels of revenue, it would be crucial if another measure contained in the Draft could be agreed in Addis. This is the commitment to “upgrade the [United Nations Committee of Experts on International Cooperation in Tax Matters] to an intergovernmental committee, to complement the work of other ongoing initiatives and further enhance the voice and participation of developing countries in norm setting for international tax cooperation.”

Another important call, though it could be strengthened, is that to “carry out negotiation and implementation of trade and investment agreements in a transparent manner to ensure that trade and investment treaties do not constrain domestic policies to reduce inequality, protect the environment or ensure adequate tax revenues”. RightingFinance pointed out that it would be useful to include the word “and” after “manner” (so it reads “in a transparent manner and to ensure”) since otherwise a strict reading of this phrase might give the wrong impression that transparent negotiation of treaties is all that is needed for them to not have the negative effects this sentence refers to.

In the same paragraph there is commitment to “strengthen safeguards in investment treaties, especially by proper review of investor-state-dispute-settlement (ISDS) clauses, to ensure the right to regulate is retained in areas critical for sustainable development, including health, the environment, employment, infrastructure (including electricity and transport), public safety, macro prudential regulations and financial stability.” Given the way in which investment agreements have affected the ability of governments to implement measures to protect human rights, this is potentially a very important achievement. However, it could be more in line with human rights commitments if –in addition to an explicit mention of human rights– it included also a commitment by all countries to revise and audit existing treaties for the purpose of identifying where such safeguards are not currently sufficient.

The SDGs represent an ambitious vision for the year 2030 and, in the case of several of them, a significant step forward in the enjoyment of human rights. But only if the means to get there are also human rights-consistent.

Read full human rights assessment of the Addis Ababa Zero draft.


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