We need sustainability assessments!

On the palm oil plantation Daya Labuhan Indah (DLI), Labuhanbatu, North Sumatra, Indonesia, chemicals are used.
Political article
Sustainability cannot become a request show. If the Federal Council takes it seriously, the monitoring of it should be built into free trade agreements as a matter of course.

In early November, Switzerland concluded negotiations on a free trade agreement (FTA) with Indonesia.[1] It had proved highly controversial in Parliament for the same reason as the one with Malaysia: it was and still is about the approach to be taken to palm oil, cultivated in Southeast Asia, and not very sustainably for the most part. Besides, there are ongoing FTA negotiations with India, Vietnam as well as the South American free trade association MERCOSUR (Paraguay, Uruguay, Argentina and Brazil), which is questionable from several points of view. As is usual in free trade negotiations, these too are taking place behind closed doors. This notwithstanding, the risks are known even in these cases: vulnerable sectors may not get sufficient protection, smallholder structures will be severely affected for the benefit of agro-industry, environmental problems caused by agro-industry could be compounded, and huge numbers of industrial jobs are at stake in South America.

When the overall conditions are right, trade agreements can have positive effects for the stakeholders. When they are not, however, the stakes are especially high for the countries in the global South. Trade agreements should not run counter to sustainable development. In addition to the economic and environmental dimensions, sustainability also encompasses the social dimension. The 2030 Agenda, a document on sustainable development approved by all UN Members, contains a number of goals and targets that are relevant to trade agreements. For example, Goal 8, of which several points address employment and working conditions, or Goal 17.15 requiring respect for each country’s policy space.

Clear words from the Control Committee

In July 2017, the Control Committee of the National Council (CC-N) published a report on “The impacts of trade agreements." The report’s first recommendation is a call for sustainability assessments. The call is founded on the principles of sustainability enshrined in the Swiss Constitution, the Sustainable Development Strategy and extensively on the 2030 Agenda. It is clear from the CC report that the Committee regards the lack of sustainability assessments as a clear case of lacking policy coherence: the Federal Council indeed underscores the importance of sustainable development, but its words are not being followed by action. To quote the CC:

“Against this backdrop the CC-N regards the hitherto principled rejection of sustainability assessments in advance of potential FTAs to be inconsistent with the Confederation's strategic guidelines. The Federal Council should have the best available information on which basis to decide whether an FTA should be concluded or not. Such information should, in the view of the Committee, in principle also include the findings of sustainability assessments where appropriate. Rejecting the conduct of such studies, so far for reasons of principle, is inconsistent with the Federal Council's emphasis on the importance of sustainability.”

The CC states that such assessments have always been rejected on grounds of inadequate methodology. It does not accept this argument, however, and points to the fact that both the EU and the USA conduct such assessments.

In its reply to the CC report, the Federal Council again proved unreceptive to this recommendation, rejecting it on the same grounds, again citing methodological shortcomings, data availability and the cost-benefit ratio, especially in the social sphere. It nonetheless stated its readiness, "instead of comprehensive sustainability studies, to carry out ad hoc, case-by-case environmental impact studies." Such studies are already enshrined in the 2013 "Green Economy Action Plan". They are a significant and welcome step in the right direction but are not sufficient. Such assessments should also cover the social dimension of sustainability.

The matter is complex, beyond doubt

Sustainability assessments for free trade agreements are not a new topic. In 2009 for example, National Councillor Carlo Sommaruga submitted a Motion calling for a sustainability impact assessment of the free trade agreement with China. The Federal Council rejected the procedural request, citing the level of complexity, the insufficiency of data, and high costs. It is true that EU-type sustainability impact assessments are costly and complex. But other models are conceivable. From a development standpoint, the credo of the UN 2030 Agenda – Leave no one behind – is paramount: it is crucially important to identify the most vulnerable groups and to explore the impacts of free trade agreements on them. Former UN Special Rapporteur on the Right to Food Olivier De Schutter, for example, developed Guiding principles on human rights impact assessments of trade and investment agreements, which address this concern. They were another step in the right direction, and would at least partly cover the social dimension.

This is also supported by Uruguay, one of the emerging countries with which Switzerland is currently negotiating a free trade agreement. Frente Amplio, the centre-left coalition now in government in that country, has drawn up guidelines for free trade agreements, calling, inter alia, for an ex-ante assessment of their implications for sustainable development.

Without delving into methodological and to some extent very technical details here, it can be said that there is certainly a debate about these methods. Those involved in the debate are perfectly aware that time and resources for such assessments are limited. The discussion therefore also raises the question of how best to set priorities with an emphasis on the most vulnerable groups.

Alliance Sud finds it dubious that for almost ten years now the Federal Council has been rejecting sustainability impact assessments citing methodological complexities, without itself striving towards developing such a method. After all, there is still no mention of this in the Federal Council's opinion on the CC-N report.

A wide range of players are conducting sustainability impact assessments or human rights impact assessments and are constantly refining potential methods. Instead of turning its back on this trend, the Federal Council should do its part to ensure that appropriate tools are applied that give due importance to all three dimensions of sustainability.

 

[1] Switzerland had the lead in the context of the negotiations on the European Free Trade Association EFTA, to which it belongs together with Norway, Iceland and Liechtenstein.