Committee on Corporate Social Responsibility

To provide the Applicants with the best possible and most relevant experience, the Model WTO has decided to adapt this years topic. By narrowing the topic to Trade & Investment: the framework of a potential Investment Facilitation Agreement, the Model WTO intends to create an even more relevant experience for its Participants as this topic has become even more relevant in recent weeks. We apologise for any inconveniences due to the delayed publication.

Committee on Corporate Social Responsibility 

Corporate Social Responsibility (CSR) has in recent years moved from merely a tool to create a better public image for corporations to a necessity to many transnational corporations (TNCs). This is also reflected in the emergence of CSR in more IIAs (UNCTAD, 2012b, p. 55), such as the Brazilian CFIA. It is defined as a “management concept, whereby companies integrate social and environmental concerns in their business operations and interactions with stakeholders” (UNIDO, 2018). These guidelines are an important tool for raising the standard of living of countries. It can contribute to responsible investment and behavior by corporations, promote sustainable investments in line with environmental or economic goals (UNCTAD, 2015, p. 49). This, in turn, balances investor and state interests, for example, the ability to invest easily for investors balanced by the states desire for sustainable investment. Further, CSR contributes to sustainable development as well as the prevention of money laundering.

Within an Investment Facilitation Agreement, CSR may provide countries the opportunity to ensure more sustainable and positive investment outcomes. In particular for developing and least-developed countries this may provide them with the tools to avoid exploitation of resources, human and natural, as well as create even more positive investment outcomes.

Therefore, the Committee on Corporate Social Responsibility is to discuss and define socially responsible and sustainable practices. The Committee is to discuss whether, CSR merely covers societal issues, such as humanitarian rights and corruption, or also economic and environmental considerations. Further, the Committee could discuss what the minimum requirements of social responsibility for corporations are. That is, to what extent corporations are responsible for ensuring humanitarian standards within their company. Further the Committee could discuss when CSR is applicable. That is, whether it is applicable for outward investments (i.e. a company complying with CSR rules established by its home country whilst investing in a different country), and/or inward investment (i.e. whether the host country should impose rules that foreign investors must meet when investing in its country). In this regard, the Committee shall then discuss if there is a need for CSR regulation on a multilateral scale and whether this discussion should occur within the debate regarding investment facilitation.

If it is agreed that CSR shall be discussed in regard to investment facilitation, the Committee shall discuss how CSR can be implemented in regard to investment facilitation. As monitoring and impact measurements play an important role in upholding CSR (UNCTAD, 2015, p. 49, the Committee shall also discuss methods for ensuring and enforcing CSR and its implementation in TNCs. Against this background, the Committee shall also discuss the involvement of the WTO. That is possibly the monitoring or enforcement of CSR by the WTO. Finally, the Committee shall bring all of these points of discussion together as part of a new regulatory agreement, namely a potential multilateral Investment Facilitation Agreement.

Resources for this discussion can be BITs such as the Brazilian CFIA, the Brazilian Proposal on a Multilateral Investment Facilitation Agreement as well as the OECD Guidelines for Multinational Enterprises.

 

Author of the Committees 2018:
Marisa Menzel (marisa.menzel@model-wto.org)
Model WTO Head of Simulation Design

Disclaimer

This year’s Model WTO focuses on trade and investment, and notably investment facilitation.  The Model WTO organizers are fully cognizant that the ‘Joint Ministerial Statement on Investment Facilitation for Development‘ – co-sponsored by 70 WTO Members at the WTO’s Eleventh Ministerial Conference held in Buenos Aires in December 2017 (document WT/MIN(17)/59) – explicitly specifies that the “structured discussions with the aim of developing a multilateral framework on investment facilitation” […] “shall not address market access, investment protection, and investor-State Dispute Settlement” (emphasis added).[1]

This is why the 2018 Model WTO focuses on investment facilitation. Nevertheless, it was considered interesting for participating students – merely for educational purposes – to consider also investment promotion and market access (in Committee 5), as well as investment protection (Committee 6).  It is hoped that this will lead to a better understanding of the scope of investment facilitation and how it differs from these other areas.

We thank you for your understanding.