European Economic and Social Committee
REX/410
Investment
Brussels, 20 March 2015
RECORD OF THE PROCEEDINGS
of the
European Economic and Social Committee
on the
Role for sustainable development and civil society involvement in stand-alone EU investment
agreements with third countries
_____________
506th plenary session,
held in Brussels
on 18 and 19 March 2015
_____________
Meeting of 19 March 2015
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Agenda item 12
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REX/410 - EESC-2015-01175-00-00-CR-REF
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EN
-1-
The president moved that the Committee turn to agenda item 12 - adoption of an opinion on the
Role for sustainable development and civil society involvement in stand-alone EU
investment agreements with third countries
The preliminary work had been carried out by the Section for External Relations (president: Mr
Zufiaur). The rapporteur was Mr Peel.
The section had adopted its opinion on 24 February 2015 by 74 votes to 4 with 9 abstentions and no
amendments had been tabled.
During the Plenary session, the rapporteur, Mr Peel, presented the Section Opinion being the second
EESC opinion related to investment (since the latter had become the EU competence under the Treaty
of Lisbon). The main objective of the opinion was to establish whether the EU standalone investment
agreements currently negotiated with China and Burma/Myanmar (and in the future possibly with
other partner countries) will include sustainable development chapters with a monitoring mechanism
involving civil society. The opinion also recommended the parameters for such a chapter including
provisions on environment and labour standards, as well as on civil society monitoring mechanisms,
building on example of the recently negotiated and implemented EU trade agreements. The rapporteur
also highlighted challenges related to civil society involvement and a possible need to invest in
capacity building and using the existing dialogues with civil society.
The following members participated in the general debate:
Mr Boyle expressed support for the Opinion and stressed importance of introducing an amended
reference to the ECO/272 Opinion on Public Private Partnerships (PPP) in which the Committee had
been generally supportive for the PPP, had flagged however some concerns which remain valid.
Ms Pavić-Rogośič highlighted importance of civil society involvement at all stages of negotiations on
investment agreements and in their implementation. She indicated also the possible need for capacity
building activities to strengthen civil society organisations. In her view, the agreements should
support sustainable development of the EU and partner countries and should also promote Corporate
Social Responsibility (CSR) to be taken up by investing companies.
Ms Pichenot stressed the need to well define the scope of a sustainable development chapter to be
included into the future investment agreements. She also recalled importance of internationally
recognised guidelines and principles in the area of socially responsible investment. Provisions related
to Corporate Social Responsibility should be included in every investment agreement.
Mr Fornea stressed that all EU investment agreements with third countries should ensure that foreign
investors will respect the applicable EU legislation, including in the area of labour (e.g. social
dialogue) and environment.
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-2Mr Kallio supported the Opinion and acknowledged that it was a challenge to define the scope of the
future sustainable development chapters given the diversity of partner countries with whom the EU
negotiates. The new investment agreements will be broader in scope than the traditional ones and
provisions on civil society involvement (addressed in the Opinion) will represent one of those new
elements.
In response, Mr Peel thanked the Study Group for fruitful discussions and comments, in particular
concerning civil society involvement. He also stressed the need to define the scope of sustainable
development chapters in the future standalone investment agreements and to promote the EU values
and standards in relations with partner countries, including by means of investment agreements.
The Plenary considered afterwards the amendments tabled in advance:
Mr Boyle had tabled the three following amendments:
Point 4.4
Amends as follows:
Facilitating public-private partnerships (PPPs) here will be essential. Any investment
agreement must ensure that the regulatory environment encourages facilitates inward
investment into government procurement and in PPPs, backed by long-term predictability
and sustainability. Companies equally need to plan long-term, especially if their investments
are to succeed. Failure on either side suits nobody. Robust government and private sector
players need to develop new synergies and learn new forms of engagement. There should be a
key role for civil society input here too, particularly at the level of the social partners.
Point 1.6
Delete second sentence as follows:
We also note that, especially given the UNCTAD1 estimate that some US $7trillion will be
needed for investment over the lifetime of the SDGs, and that at least a third of this will need
to come from the private sector, the role of the private sector will a key factor in any
Investment agreement. We regret that investment related issues have become more politically
contentious, notably concerning the key issue of investment protection (being covered by a
separate concurrent Committee Opinion). The Committee nevertheless reaffirms that the right
of the EU and other states to regulate and pursue legitimate public policy objectives
(including health, safety and environment) is paramount.
1
UNCTAD WIF Press Release, Geneva 14 October 2014.
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-3Point 1.6.2
Amend as follows:
"The Committee also emphasises that gGovernment procurement will need to be covered by
any investment agreement, along with public-private partnerships (PPPs), governments
working alongside the private sector. The Committee has previously stated that PPPs "could
be an important instrument for implementing … strategies, assuming they are correctly
calibrated and communicate with interested parties"2. Any investment agreement must
therefore ensure that the regulatory environment actually encourages facilitates PPPs."
Ms Pichenot had tabled the following amendment:
New point 1.6.4
Add new point:
The Committee calls for the sustainable development chapter of any investment agreement
between the EU and a third country to promote responsible investment. To this end, such
agreements should encourage public and private financial institutions to voluntarily declare
that environmental, social and governance impact data, known as "ESG criteria", have been
factored into their analyses and responsible investment decisions.
To promote a commitment on overall performance, the sustainable development chapter
should first clarify this commitment by referring explicitly to international SRI standards such
as the United Nations-supported Principles for Responsible Investment (UNPRI) or the
sustainability framework of the World Bank's International Finance Corporation (IFC), and
second, call on financial institutions and investors to publicly subscribe to one of these
standards and to hold themselves accountable on this.
Group II had tabled the following amendment:
Point 1.6.2
Amend as follows:
The Committee also emphasises that government procurement will need to be covered by any
investment agreement, along with public-private partnerships (PPPs), governments working
alongside the private sector. The EESC policy on PPP was the subject of ECO/272 issued on
21 October 2010. Although the opinion was generally supportive of PPP, it also flagged up
certain concerns, which are still very relevant. The Committee has previously stated that
2
OJ C 271, 19.9.2013, p. 144–150
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-4PPPs "could be an important instrument for implementing … strategies, assuming they are
correctly calibrated and communicate with interested parties"3. Any investment agreement
must therefore ensure that the regulatory environment actually encourages PPPs. Any
investment agreement must therefore enable the possibility of public investments and PPP.
Both have to guarantee that the goals on sustainability are met.
The following compromises have been adopted:
Point 4.4
Further to justification provided for the amendment, the Rapporteur proposes the following as a
compromise:
The word "encourages" can be replaced by another verb, however in order to avoid a repetition (the
verb "facilitates" proposed in the amendment is already used in the first line), the preference would be
to use e.g. the verb "enables".
"Facilitating public-private partnerships (PPPs) here will be essential. Any investment
agreement must ensure that the regulatory environment encourages facilitates [enables]
inward investment into government procurement and in PPPs, backed by long-term
predictability and sustainability. Companies equally need to plan long-term, especially if
their investments are to succeed. Failure on either side suits nobody. Robust government and
private sector players need to develop new synergies and learn new forms of engagement.
There should be a key role for civil society input here too, particularly at the level of the
social partners."
Point 1.6
The Rapporteur proposes the following as a compromise:
Delete the second sentence (as proposed by Mr Boyle) and replace it as follows:
"We also note that, especially given the UNCTAD4 estimate that some US $7trillion will be
needed for investment over the lifetime of the SDGs, and that at least a third of this will need
to come from the private sector, the role of the private sector will be a key factor in any
Investment agreement. We regret that investment related issues have become more politically
contentious, notably concerning the key issue of investment protection (being covered by a
separate concurrent Committee Opinion). Investment protection is a key issue, but is being
covered by a separate concurrent Committee Opinion. The Committee nevertheless reaffirms
3
4
CESE 4374/2013 (Voleš).
UNCTAD WIF Press Release, Geneva 14 October 2014.
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-5that the right of the EU and other states to regulate and pursue legitimate public policy
objectives (including health, safety and environment) is paramount."
Point 1.6.2
The rapporteur proposes the following as compromise:
The Committee also emphasises that Government procurement will need to be covered by any
investment agreement, along with public-private partnerships (PPPs), governments working
alongside the private sector. The EESC policy on PPP was the subject of ECO/272 issued on
21 October 2010. Although the opinion was generally supportive of PPP, it also flagged up
certain concerns, which are still very relevant. The Committee has previously stated that
PPPs "could be an important instrument for implementing … strategies, assuming they are
correctly calibrated and communicate with interested parties"5. The Committee has also
previously stated that PPPs "could be an important instrument for implementing
development … strategies, assuming they are correctly calibrated and communicate with
interested parties"6. Any investment agreement must therefore ensure that the regulatory
environment actually encourages PPPs. Any investment agreement must therefore enable the
possibility of public investments and PPP. Both have to guarantee that the goals on
sustainability are met.
Point 1.6.2 (given that the above compromise on Amendment No. 5 included also the following
compromise on Amendment No. 3, the latter fell)
The Rapporteur proposes the following as a compromise:



Delete the beginning of the first sentence as proposed in Amendment No. 3;
Keep the word "actually" in the last sentence;
Replace the verb "encourages" with the verb "enables" rather than "facilitates", so that the text is
consistent with the compromise proposal related to Amendment No. 1
"The Committee also emphasises that gGovernment procurement will need to be covered by
any investment agreement, along with public-private partnerships (PPPs), governments
working alongside the private sector. The Committee has previously stated that PPPs "could
be an important instrument for implementing … strategies, assuming they are correctly
calibrated and communicate with interested parties"7. Any investment agreement must
therefore ensure that the regulatory environment actually actually encourages facilitates
[enables] PPPs."
5
CESE 4374/2013 (Voleš).
6
OJ C 271, 19.9.2013, p. 144–150.
7
OJ C 271, 19.9.2013, p. 144–150
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New point 1.6.4
As a compromise, the Rapporteur proposes to amend the existing point 1.6.3 instead of adding a new
point 1.6.4. The modified text would read as follows:
1.6.3 The Committee recommends too that in the sustainable development chapter of any
investment agreement the role of Corporate Social Responsibility (CSR) must also be covered by any
investment agreement, including reference to socially responsible investing, such as United Nationssupported Principles for Responsible Investment (UNPRI)8. To this end, such agreements should
encourage public and private financial institutions to voluntarily declare that environmental, social
and governance impact data, known as "ESG criteria", have been factored into their analyses and
responsible investment decisions. We note that a new Commission Communication on CSR is
expected in early 2015, but full mutual recognition of wider international guidelines by both
negotiating parties is essential. These include the OECD Guidelines for Multinational Enterprises9
and the UN Guiding Principles on Business and Human Rights (UNGPs), which are in the process of
implementation. The Committee stresses that any action at either EU or international level should not
run counter to or jeopardise these.
The opinion was adopted by 165 votes to 1 with 8 abstentions.
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8
9
These issues may be covered more fully by a forthcoming Committee Information Report.
OECD Guidelines for Multinational Enterprises, 2011.
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