buyers and consumers an easy way to find seafood from a sustainable source (MSC 2009).
More generally, standards and voluntary labelling schemes can also play an important role in sustainable public procurement. Although it is generally considered bad practice for procurement officials to require compliance with a particular standard – companies might have high sustainable credentials without being part of the specified standard, or as part of another accreditation programme – they are often used by procurers to identify good-practice criteria for the evaluation of a good or service’s sustainability.
Although standards and labelling schemes can be powerful instruments to drive a green economy, they can also create barriers for small and developing country producers who may not have adequate resources to prove compliance, or for whom the standards are inappropriate. For instance, Uzbek farmers seeking certification in the French organic fruit and vegetable market are reported to have faced compliance costs higher than the national GDP per capita (Vitalis 2002). Elsewhere, water-use standards based on limited water availability in one country have proven to be inappropriate for others where the water availability situation is entirely different (Vitalis 2002). From a trade perspective, the concern is that standards – and mandatory standards in particular – could hinder access by developing country exporters to lucrative markets in developed countries. Yet improving market access for developing country products is essential for development. It is therefore critical to find the right balance between environmental protection and safeguarding
access. Multilateral dialogue and negotiations, whenever possible, are essential to ensure that this balance is met.
Moreover, as noted in the Forests chapter, it may be possible for standard bodies to support a step-wise approach – setting benchmarks for companies that measure their progress towards sustainable criteria and giving them support in planning and building capacity to achieve higher standards (Morrison et al. 2007). Official development assistance can also be used to help developing country exporters successfully meet stringent standards in their main export markets.
International investment framework The international investment framework is made up of a web of treaties between states, and contracts
between states and private investors, that describe rights and obligations regarding foreign investments. State to state agreements, such as bilateral investment treaties (BITs), regional investment treaties and investment chapters in trade agreements like the North American Free Trade Agreement (NAFTA), provide rights and protections to investors from covered states. Contracts between a state and an investor, often called investment contracts or host government agreements, set out the rights and obligations of the investor and the host state, including the conditions applied to the operations of a single investor and its subsidiaries in the agreeing host country. Host government agreements are most common in developing countries, where often there are fewer general regulations covering investment rights.
An increasing number of recently signed regional trade agreements incorporate environmental considerations in their respective investment chapters. The agreements may expressly promote investment activity that is undertaken in a manner sensitive to environmental concerns, as is the case with the New Zealand–Malaysia free as
trade agreement. Certain agreements, such the Canada–Jordan free trade agreement, also
seek to promote the enforcement of domestic environmental laws and to ensure that such laws are not derogated from for the purposes of encouraging investment
or trade. Although environmental
considerations feature increasingly in the international investment framework, many investment treaties and investment contracts do not expressly promote sustainable over unsustainable investments (Mann et al. 2005). A key concern regarding investment contracts, for example, stems from “stabilization clauses” – provisions in host government agreements that freeze legislation at a certain point in time or that require host states to compensate in case of changes in the law that adversely affect profits. Concerns have been raised that such clauses limit a state’s ability to regulate effectively so as to protect the environment and human rights (Shemberg 2008), and this could have consequences for the promotion of a green economy where regulations are established to drive green growth. It is therefore important that both the benefits and constraints associated with international investment frameworks are properly understood when they are negotiated to ensure they support a green economic transition.