CASE-1

TitleSustainable Investment & responsibilities Supply Chain Chain Mgt-

IntroductionSupply chain sustainability is a business issue affecting an organizations logistics

network in terms of environmental, risk, and waste costs. There is a growing need for
integrating environmentally sound choices into supply-chain management. Sustainability in
the supply chain is increasingly seen among high-level executives as essential to delivering
long-term profitability and has replaced monetary cost, value, and speed as the dominant
topic of discussion among purchasing and supply professionals. A sustainable supply chain
seizes value creation opportunities and offers significant competitive advantages for early
adopters and process innovators.
ProblemsA key problem is that over-restrictive policies artificially break the supply chain by
introducing discontinuity and affecting reliability. Such policies include those that are
enforced at the border (over-burdensome Customs, health, security requirements, etc.).
Many of the policies that may raise costs or reduce the ability of firms to improve the
efficiency of supply chains are regulatory in naturee.g., transportation- and distributionrelated standards and policies (e.g., maximum truck size requirements; axle loads; size of
retail outlets; zoning restrictions for wholesale and retail operations; etc.). There may be
limitations on investment in certain types of activities. Entry into a market or supply of
certain services may be impeded as the result of exclusivity or preferential treatment for
state-owned or state-supported enterprises (e.g. postal monopolies). The functioning of
some parts of a supply chain may be impeded as a result of the exercise of market power by
a dominant or monopoly supplier or entity that controls access to a gateway, facilities or
networks (e.g. port operations or airport cargo handlers). In short, a variety of factors may
raise the cost of operating a supply chain. In addition to addressing these problems, more
data on logistics barriers is needed.

Implementation

Allow governments to apply and conduct border controls more efficiently

Allow traders to move their goods across borders more quickly and easily

Reduce transaction costs and hence reduce prices for consumers and producers

Reduce transit costs in landlocked countries

Reduce bureaucracy and corruption

Facilitate trade for small and medium-sized businesses burdened with excessive
bureaucracy and red tape

Add to members' GDP by making trade less costly.

What is the status of Inclusion of sustainable development principles in the

current and emerging investment agreements?
Sustainable mobility' has been adopted as an overall objective for European transport policy,
and similar intentions are expressed in other parts of the world. However, little has been
done to define what sustainable mobility would actually imply for our understanding and
assessment of transport. We suspect that this much used term could merely end up acting
as a lubricant to the very development it was meant to challenge: The ever increasing
movement of people and goods. In this article we attempt to place transport in the context
of sustainable development principles. We emphasise the need to include principles of
development (increasing well-being and equity) as well as sustainability (preserving natural
and man-made capital). Four such principles are suggested, taking inspiration from Herman
Daly and others. We then turn to explore the main features of transport, establishing a
comprehensive transport concept. The concept combines a systems perspective with a
service perspective. Omitting either one would disable a complete consideration of
sustainable development. Our confrontation of the four principles with the reality of current
transport trends gives rise to several critical implications. The most important of which
relate to the contribution of transport to depleting natural capital and quality of life.
Moreover, we are also forced to challenge the value of increasing mobility itself, if other
forms of access may provide relevant substitutes.
How to increase the flow of sustainable Investment, particularly to poorer
countries: and is there a role for the WTO to facilitate such flow?
&
What can the private and public sectors do to encourage and monitor global value
chain/ responsible supply chain practices?
The global challenges of poverty, sustainable growth, and climate change are being tackled
with renewed Vigour through a post-2015 development agenda and accompanying
sustainable development goals. This will see many countries embark on the design of
national development strategies for 2030. Nations are also currently announcing their
national climate action plans as part of an effort to ink a deal in December on a post-2020
multilateral climate regime. On the trade side, while uncertainty remains around the Doha
Round trade talks, the WTO Trade Facilitation Agreement (TFA) is expected to enter into force
sooner rather than later. Meanwhile, strengthened international commitments and
guidelines around development finance. Investment is common to all these processes that
will, one way or the other, update the global development vision and in turn increase
demands for quantitatively more investment that is also qualitatively more sustainable.
Shifting investment perspectives
Seen from some angles, investment remains a contentious multilateral issue, with divisions
over the future of the international investment regime, rising numbers of disputes and
criticism of their settlement, and close scrutiny of corporate contracts by media and civil
society. Perspectives on foreign direct investment (FDI) have nonetheless evolved greatly
over the years, for example, moving from closure to openness or from positive to negative

lists. A few facts help to illustrate countries current broader openness to FDI. According to
the UN Conference on Trade and Development (UNCTAD), some 80 percent of regulatory
changes from 2000-2013 involved liberalization or promotion, while the number of
international investment agreements rose to 3268 by the end of 2014.
Bridging the sustainable investment gap
For governments, despite development fatigue and budgetary constraints, many states are
open to partnering with the private sector. The rationale for such cooperation is enlightened
self-interest, in other words, leveraging donor assistance to enlist private resources to
support recipient countries in implementing shared commitments on trade and sustainable
development. Governments are, however, expected to lead the process. National policies in
many cases can provide the critical enabling environment for investment. Potentially, all
investment is sustainable, but depends on discovering and putting in place the appropriate
policy and institutional frameworks.
What needs to be done?
Regulation and promotion are the basic policy levers to enhance investment. While most
countries have liberalized laws governing entry, treatment, and exit of FDI, these are often
inadequate, and where regulatory support infrastructure exists, clarification or improved
coordination among different levels of government may still be needed. In many countries,
the overall regulatory environment can be made more transparent, and the costs of doing
business lowered. However, in the global competition for FDI, it is also important that
investment should advance larger development objectives. Governments frequently offer
generous fiscal incentives that do not induce specific development activities. Regulatory
exceptions should avoid the sacrifice of long-term objectives for short-term gains. But policy
experience in incentivising private investment in sustainable development activities is as yet
nascent. Demonstration projects, pioneering partnerships involving multiple stakeholders,
and institutional capacity in the public sector receptive to positive engagement with the
private sector are needed. Many of these suggestions might be helped by an international
support programme for sustainable investment facilitation.
Contours of sustainable investment facilitation
Such a programme would focus on the nuts and bolts of encouraging the flow of
sustainable FDI to developing countries. Moreover, many developing countries and
particularly the worlds poorest nations do not possess the capacity to compete successfully
in the world market for FDI and therefore require particular assistance to meet substantial
investment needs. The programme would complement various efforts to facilitate trade, in
particular, through the WTO led Aid-for-Trade Initiative and the recently adopted WTO Trade
Facilitation Agreement. In a world increasingly dominated by global value chains, the latter
address the trade side of the equation, while an international support programme for
sustainable investment facilitation would address the investment side. Analogous to WTO
efforts, a sustainable investment support programme would be entirely technical focusing on
a range of practical actions to encourage the flow of sustainable investment to developing
countries, with the aim of fostering their economic growth and development. These

undertakings would in turn need the support of official development assistance, especially
for least developed countries, to strengthen the basic economic determinants of FDI.
Practical steps moving forward
There are several ways in which this idea could be moved forward. One option is to extend
the Aid-for-Trade Initiative to cover investment as well, recognizing the close
interrelationship between investment and trade, and in tune with other trade international
frameworks such as the WTOs General Agreement on Trade in Services (GATS). Transactions
falling under the latters Mode 3 commercial presence account for nearly two-thirds of
the worlds FDI stock. The initial emphasis could be on investment in services and focus on
key sectors for promoting sustainable development. Relevant initiatives, however, might
require a broader interpretation of the current Aid-for-Trade mandate. This approach could
also benefit from the OECDs Creditor Reporting System that monitors where aid goes and
what purpose it serves. The matter could equally be taken up by the Global Review on Aidfor-Trade, to examine its feasibility. Alternatively the current Aid-for-Trade Initiative could be
complemented with a separate Aid-for-Investment Initiative but, given the tight
interrelationships between trade and investment, this would be a second-best solution.
Meeting the future
The issues mentioned for possible inclusion in an international support programme for
sustainable investment facilitation, as well as the options outlined on how such a
programme could be put in place, are illustrative and all need to be seen against the
background of the importance of economic FDI determinants. If these determinants are
unfavourable, and investments are not commercially viable, even the best support
programme is likely to have negligible effect.