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Assistant Secretary Camuñez’ Opening Remarks at the OSCE Economic and Environmenatl Dimension Implementation Meeting

(Remarks as prepared for delivery at the Opening Session of the OSCE Economic and Environmental Dimension Implementation Meeting)

On behalf of the United States, I would like to thank the Lithuanian Chairman-in-Office, Secretary General Zannier, Coordinator for Economic and Environmental Activities Svilanovic, and of course our Austrian hosts for convening this inaugural Economic and Environmental Dimension Implementation Meeting and for providing a warm welcome to Vienna. It is an honor to be here today as head of the U.S. delegation to the OSCE, representing the U.S. Government in my capacity as Assistant Secretary of Commerce for Market Access and Compliance, and as a Commissioner to the U.S. Helsinki Commission. Since I joined the U.S. Department of Commerce’s International Trade Administration (ITA) in September of 2010, I have been responsible for helping lead the effort to open new markets for U.S. companies, identifying and eliminating market access challenges such as non-tariff barriers to trade, and helping to monitor and enforce U.S. trade agreements and commitments. The work of the Environmental and Economic Dimension, especially that focused on transparency of markets and good governance, is closely aligned with the work we undertake at ITA.

I am here today to deliver the message that the U.S. Government is highly committed to making the second dimension even more effective and dynamic, and that we will do our part in ensuring that our economic and environmental commitments receive the same level of attention and scrutiny that those in the political-military and human dimensions currently enjoy.

I will try to keep my remarks brief, but I think it is critical that we take a close look at the economic and environmental commitments as they were spelled out in the 2003 Maastricht Strategy. We still see Maastricht as the key blueprint for moving forward on all the commitments that have come before, and in particular, note a number of areas where we could pursue significant, substantive action over the next few years to achieve measurable progress.

Economic Cooperation

Our commitments on economic cooperation have at their core the idea of connectedness to regional and global markets, to trade and investment networks, and to energy and transportation infrastructure, as a way to address emerging economic challenges and threats. In light of the global economic downturn, it is vital that we recommit ourselves to increasing cooperation through a variety of measures, including improving corporate governance and public management, eliminating unnecessary and discriminatory barriers to trade, continuing to harmonize our regulations and standards where appropriate, taking further steps to combat financial crimes like bribery and money laundering, and increasing confidence through the incorporation of transparency principles in all our public and private ventures. At the same time, in view of progress made this year worldwide on empowering women in the economy, first at the Invest for the Future Conference in Istanbul in January and most recently at the APEC Summit in San Francisco, we believe it is important to recognize the critical connection between women and strong economies, and remove all the barriers that prevent women from full and equal participation in the economy.

Good Governance

We have committed ourselves time and again to “good governance,” and while progress has been made, much work remains to be done. As stated in the 2003 Maastricht Strategy, achieving good governance will require a comprehensive, long-term strategic approach. In the view of the U.S. Government, good governance is the core theme within the economic and environmental dimension, and we are pleased that next year’s Forum will address the topic in a broad and detailed way.

What do we mean when we talk about good governance? Good governance is about governments having both the propensity and the competence to manage complex political and economic systems in a fair, fully inclusive, and transparent way. Anti-corruption is part of it, but not the whole picture. Having transparent, clear and predictable legislative and regulatory frameworks that foster efficient and low cost business formation and development, and most importantly allow and even encourage robust participation in the political and economic spheres by civil society, is the essence of good governance. Moreover, having well-trained, dedicated professionals implementing these frameworks is imperative, lest well-crafted laws and regulations become mere words on paper. Improving governance in all its aspects and in all areas of public life will contribute to mutual confidence and security.

Let me say a few words about my agency’s past and current work in this area, reserving greater details and the highlights of a new proposal for Session III tomorrow. From 1998-2008, the U.S. Department of Commerce launched a Good Governance Program, focused on partnering with the public and private sectors in the countries of the former Soviet Union and Central-Eastern Europe. This work, focused on promoting sound corporate governance and business ethics, culminated in the publication of a Business Ethics Manual, a Commercial Dispute Resolution Handbook, and a Corporate Governance Manual translated into several languages and disseminated widely throughout the OSCE region. Today, we continue to work on numerous initiatives around the world, within multilateral fora such as APEC and the G20, which involve OSCE members, promoting consensus based principles focused on anti-corruption. We have taken our business ethics work and branched out into new regions including Asia and Latin America.

The lack of good governance and systemic corruption remain some of the single most important market access challenges for companies engaged in trade around the world. This is especially true for small and medium sized enterprises, which are the engine of economic growth and innovation throughout the world. The United States believes that addressing these issues can only lead to greater investment, economic prosperity and security.

At these meetings we will discuss OSCE support for the Extractive Industries Transparency Initiative (EITI). I am pleased to report that the U.S. Department of Commerce played an important role in supporting the creation of the EITI in its initial phase. The OSCE now has a chance to follow in the steps of the G8 and G20, by endorsing the EITI, and I applaud the governments that have recently signed on as implementers, of which the United States has recently announced its intention to become one. The EITI is a great example of how shared commitments towards good governance and transparency in a vital sector to many countries can work and build sustained momentum and engagement between the private sector, governments and civil society.

Later today, I will share more concrete information about the work that the U.S. Government and my Department have undertaken to promote good governance and to combat corruption. I am also pleased to have an expert on business ethics and anti-corruption in the energy sector, as part of the U.S. delegation. Mr. Matthew Murray runs the Center for Business Ethics and Corporate Governance in St. Petersburg, Russia, and will speak to you later about a good governance initiative involving public and private stakeholders in the power generation sector in Russia, which may serve as a model for similar programs in other OSCE countries.

Sustainable Development

A month ago, the Economic and Environmental Forum discussed the concept of sustainability and where efforts to promote sustainable practices stand in our region. Those discussions remind us that our commitments on sustainable development encompass a broad spectrum of activities related to efficiency, sound resource management, and the full involvement of all stakeholders in decision-making. Just to cite an example from the Prague Forum, we recognize that in order to further develop economies and markets in such varied areas as the Black Sea region and Central Asia we will need to address several problems: improving the efficiency of border crossings and building construction, tilting the energy mix towards cleaner fuels, harmonizing standards and practices across the region, and, just as critically, ensuring broad involvement of civil society in the decision-making on project proposal, design, and implementation.

Protecting the Environment

One thing that sets the OSCE apart from many other organizations addressing the environment is recognition of the clear connection between the environment and security. We recognize that many environmental disasters cannot be predicted or prevented. At the same time, greater transparency – through information sharing and civil society engagement – about possible security risks stemming from the environment will make it possible to prevent or mitigate more disasters, both natural and man-made. We also must recognize that failure to protect the environment is itself a security risk, putting increased pressure on populations facing dwindling resources of clean air and water, arable farmland, and adequate energy.

Colleagues,

These next three days provide a critical juncture and platform for finding consensus on measures that will improve our implementation of the OSCE commitments in the economic and environmental dimension. The Vilnius Ministerial is only a month and a half away; now is the time to summon the political will to find a way forward. We look forward to building consensus on decisions on energy security, to include good governance and transparency, and we welcome constructive dialogue on additional measures proposed on confidence-building initiatives and sustainable transport.

Just one month ago, we found some convergence of opinion on discrete aspects of the second dimension. Let us expand that convergence to the entire dimension as we review our economic and environmental commitments over the next few days, with a view toward substantive deliverables for Vilnius.

Thank you, Moderator.

 


Assistant Secretary Camuñez on Good Governance in the OSCE Region

(Remarks as prepared for delivery at the OSCE Economic and Environmental Dimension Implementation Meeting, Session 3: Good Governance)

The United States has viewed with keen interest the evolving discussions in recent years on what the OSCE’s priorities should be in the Economic and Environmental Dimension. As our friend and colleague Mr. Svilanovic pointed out during last year’s Vienna Review Conference, we appear to have come to an appreciation that good governance is the key linking theme across the entire second dimension. The Maastricht Strategy is very clear on this point: “Good public and corporate governance and strong institutions are essential foundations for a sound economy, which can attract investments, and thereby enable States to reduce poverty and inequality, to increase social integration and opportunities for all and to protect the environment. Good governance at all levels contributes to prosperity, stability and security.” As we consider the implementation of our second dimension commitments, we should keep in mind why it is important to implement those commitments.

The global economic downturn continues to put extreme pressure on people and governments across the OSCE region. To be sure, some countries have weathered the storm better than others. Still, no country can be forever immune to market forces, and even within those that have done well, there are always citizens left behind. This is a question we are trying to answer now in the United States: how do we get people back to work? We all know that trade and investment are critical drivers of economic growth. So the next question is, if growth is hindered by decreased trade and investment, what can be done to support these economic engines? The answer must include good governance.

Weak governance and lack of transparency constitute non-tariff barriers to trade, which we have committed ourselves to eliminating. Furthermore, the same issues that deter trade and investment also work against comprehensive security: a lack of transparency in governance leads to diminished confidence that problems and disputes will be addressed in a fair and impartial manner. Without trust and confidence in public institutions, there is little incentive for investors and companies to pursue trade deals or direct investment in those economies. The effect is stagnating economic performance, which we have seen in the past several months and years can lead to political upheaval.

The United States Government is deeply committed to fostering good governance and transparency in its political and economic institutions. President Obama has made the global fight against corruption a top priority. As he has noted, “In too many places, the culture of the bribe is a brake on development and prosperity. It discourages entrepreneurship, destroys public trust, and undermines the rule of law while stifling economic growth. With a new commitment to strengthening and enforcing rules against corruption, economic opportunity and prosperity will be more broadly shared. “For the global economy, corruption is dangerous. No matter where – or how – it happens, the corrosive result is the same: stalled development, loss of public trust, and distorted competition.

The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a global economy of approximately 30 trillion dollars. That’s an incredible three percent of the world’s economy. Between 2005 and 2009, at least 305 contracts worth more than $230 million were allegedly affected by the bribery of foreign public officials. In 2009, companies lost nearly $30 billion to bribers, for deals for which the outcome is known.

Corruption is a global problem that knows no borders. And that’s why corruption demands a truly global response – one that knows no limits on collaboration. Because corruption is a significant non-tariff barrier, the U.S. Department of Commerce and the International Trade Administration (ITA) are committed, under my leadership, to working with our trading partners to level the playing field and to promote transparent and corruption-free markets globally. Our work to promote clean and ethical business environments occurs at both the multilateral and bilateral level. At the multilateral level, the ITA is pressing its counterparts to lead by example and to implement comprehensive anti-corruption measures.

The United States has participated actively at the OECD as a member of its Working Group on Bribery, responsible for monitoring whether countries that are parties to the OECD Anti-Bribery Convention are living up to their commitments to implement the Convention and enforce their foreign bribery laws. Many of our peers who are Parties of the OECD Anti-Bribery Convention need to step up enforcement of their laws, and ensure that their companies do not bribe public officials while conducting business overseas.

This past Fall, the United States was instrumental in persuading the G20 countries to adopt a comprehensive anti-corruption action plan, which includes a commitment focused on adoption and robust enforcement of anti-bribery laws, implementation of the UN Convention against Corruption, greater engagement with the private sector, and support for transparency mechanisms, to name a few. Many of these commitments require our G20 partners to enact and implement new laws and preventive measures.

ITA, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20. Corporations from G20 countries engage in a large percentage of global trade and economic activity. It is vital for us to seek the partnership of these corporations to combat corruption.

The U.S. Department of Commerce has also been committed to fostering strong private sector integrity as an integral part of promoting good governance in markets worldwide. Companies are global corporate citizens, and as such, can work collectively and with governments to foster trust, and promote transparency.

As I mentioned during my opening remarks yesterday, the United States, led by the Department of Commerce, has championed business ethics and corporate governance reform since the early 1990s, following the fall of the Berlin Wall. Our Business Ethics Manual has been translated into Chinese, Spanish and Russian and is still one of the most widely used resources on this important topic. We have partnered with business associations and chambers of commerce to develop collective action and business ethics program in many markets.

Our work on business ethics has grown. This past year, the ITA has focused on trying to heighten awareness of good governance, transparency and business ethics in sectors of vital importance to many economies – by taking a “sectoral” approach to combating corruption and promoting good business practice, the challenge of dealing with corruption becomes less daunting. The ethical issues specific to different industries vary greatly – and there is no one size fits all approach to the problem. Within the G20, for example, the United States, at the initiative of the U.S. Department of Commerce, has taken the lead in calling for the G20 to endorse additional sectoral approaches to fighting corruption, beyond the Extractive Industries Transparency Initiative (EITI). We have asked G20 governments, for example, to consider supporting the Construction Sector Transparency Initiative (COST) – a new multi-stakeholder initiative, developed by the World Bank. COST uses similar approaches to EITI to promote greater transparency in public infrastructure projects and government procurement. I hope that the OSCE might similarly consider COST and other multi-stakeholder approaches to promoting transparency under the Irish chairmanship.

Within APEC, the ITA has focused on developing new ethical principles for key sectors within the APEC region. I am pleased to report that under the APEC SME working group, we have coordinated a project with APEC countries and businesses to develop principles of business ethics in the construction, medical devices and biopharmaceutical sectors. These voluntary principles are meant to be used by businesses and trade associations – large and small – to guide their ethical interactions with public officials and institutions. I hope that within the OSCE framework and the EEDIM, we might also consider focusing on business ethics in specific sectors of interest to all of our economies.

I would like to note also the role that women play in ensuring good governance. Women’s political participation is a crucial indicator of women’s equality. Around the world, women are entering the field of politics and government in growing numbers, yet their gains have been uneven and their leadership often goes unrecognized. All too often, important decisions that affect women, their families, and their societies are made without their having a voice. We believe that integrating women in political structures is another way to encourage good governance.

I want to close by suggesting some activities to take the theme of good governance and transparency forward. As I noted above, I hope that we will look beyond EITI to see if there are additional sectoral initiatives that merit support from the OSCE, including the Construction Sector Transparency Initiative. The United States Government also strongly supports the Irish Chair’s goal to develop a Statement or Declaration of Transparency Principles to help guide our governments in their future activities.

I want to encourage us to consider new models of bilateral cooperation to promote good governance such as the model Mr. Murray has just discussed, leading to a public-private initiative in the Russian power generation sector.

We at the U.S. Department of Commerce are working closely with the Center for Black Sea/Caspian Studies at American University to convene a conference in May of next year that would seek to address the challenge of developing mechanisms to ensure good governance and transparency, while also balancing the goals of protecting national security and accelerating economic development faced by the countries of the Caucasus and Central Asia, as they seek to assert their role as a gateway between Europe and Asia. In addition, the conference will also focus on specific market access challenges to regional integration and economic development in the Caucasus and Central Asia such as transparency in Government procurement and privatization, and trade facilitation challenges, including customs and lack of regional harmonization. It is our hope that the OSCE will join us for this event – focused on critical areas such as transport and infrastructure – to work on tangible ideas for projects and collaborations in the OSCE region.

We look forward with great interest to the 20th Economic and Environmental Forum, where we will delve deeper into all the facets of good governance. We also thank the Lithuanian Chairman-in-Office for ensuring that their draft Ministerial Council decision on Energy Security incorporates transparency in the energy sector – in our view, considering the vital role that energy plays in modern economic life, there can be no confidence, and thus no security, without energy transparency. In the year ahead, we envision an even broader focus on transparency principles across the entire spectrum of economic and environmental activities, and will work with all of our colleagues in the OSCE to make that vision a reality.

Thank you, Moderator.

 
 

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