OECD investment treaty "will be greened"

"New consensus" emerges for strong environmental safeguards in international investment rules

An international treaty on investment being negotiated by member countries of the Organisation for Economic Cooperation and Development (OECD) looks certain to include stronger environmental safeguards, following talks in Paris this week.

The meeting brought together high-level officials for the first time since negotiations on the multilateral agreement on investment (MAI) began three years ago. It has revealed a "new consensus" on the need to include environmental language in the treaty, according to an OECD official, as well as growing pressure for environmental safeguards to be made binding.

The emerging consensus among negotiators is for a "three-pronged" approach. Environmental and labour safeguards will be written into the preamble and into several specific clauses of the treaty. In addition, the MAI will be "associated" with existing OECD guidelines for multinational enterprises, which highlight investors' responsibilities in the fields of labour and environment.

Key issues remain on the table, and in particular the "strength" of environmental clauses to be included in the body of the treaty. A new development in Paris this week, according to officials, is that there is probably now a majority of countries in favour of binding language, in particular among European countries. Debate on this issue during the high-level talks was "lively," an OECD official told ENDS Daily.

The move towards stronger environmental safeguards represents a significant victory for the environmental movement, which has waged a fierce campaign against the treaty. Led by the World Wide Fund for Nature (WWF), an international coalition of groups

has argued that the treaty will give multinational companies more power than governments and will undermine both national and international environmental rules (ENDS Daily 29 October 1997).

Following the Paris meeting, the treaty now looks likely to contain clauses preventing the treaty from overriding "normal regulatory powers of government". It will also contain a commitment by governments not to lower environmental or labour standards in order to attract or retain investment. Based on language first developed for the North American free trade agreement (NAFTA), the "not lowering standards" clause remains a focus of continuing discussions over how far it should be binding.

Though heartened by the new "admission" by governments that there are "serious conflicts" between the MAI and environmental protection, environmental groups are maintaining pressure for this spring's scheduled closure of talks to be postponed. "The full environmental and social consequences of the MAI [should] be assessed in a democratic manner," WWF said in a statement following the high-level talks in Paris.

Follow Up:
OECD, tel: +33 1 45 24 82 00. References: The full text of the draft MAI is available on the MAI home page.

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