Does the G20 Wield “Veto Power” over the Global Governance System?
Introduction by Nancy Alexander
The French Presidency of the G20 began the year with sweeping ambitions of overhauling global governance. But now, on the eve of the Summit, its greatest accomplishment may be a more or less convincing plan to save the Eurozone. The latest newsletter on "EU financial reforms" by SOMO and WEED, provides important perspectives on EU and G20 approaches to the crisis.
If China and other emerging market countries sink money into a special purpose vehicle (SPV) for the rescue, it will jolt the tectonic plates of the geopolitical world. In return, the rescuers will demand a bigger voice in global decision making, as noted by the article, “Managing the Decline” by Günther Maihold, Deputy Director of the German Institute for International and Security Affairs.This issue also brings reports from civil society events on the G20 in five countries: Brazil, India, Argentina, the U.S. and France. Business has plenty of clout in the G20, as described in the box below. Civil society also wants to make democracy work and, wherever possible, work with elected officials to influence G20 member countries and bring in the views of constituencies in non-member countries. Some reports of civil society events – such as the one from India – reflect frustration with the corporatist agenda of G20 governments. Others – such as the one from Brazil – reflect genuine headway in government-civil society dialogue about the G20. The case of government-civil society cooperation in Brazil is unusual. For the most part, civil society is excluded from governmental decisions-making processes and mystified about how these processes work. While the G20 is open to business, it is relatively closed to civil society (see box, page 2). Nevertheless, civil society is committed to influencing the G20, particularly in the area of development. In this area, the French Finance Minister and Central Bank Governor, Francois Baroin and
Christian Noyer, respectively, told their colleagues at the 14-15 October G20 Finance Meeting that they expected Cannes to produce an agreement on innovative financing for development, including introduction of a Financial Transactions Tax (FTT) (Why We Need a Financial Transaction Tax: A Proposal for the G20) in a core group of countries and a common framework for regulating and supervising commodity derivatives trading. They also expect an agreement on resources that can be used for climate financing and the launch of exemplary region-wide public-private partnerships (PPPs) in infrastructure. However, the proposed PPPs, which are listed and critiqued by the Heinrich Boell Foundation (“Beyond the Public Eye”) tarnish any “green” credentials to which the G20 might aspire. As also described by International Rivers, the G20 High-Level Panel (HLP)selected these projects without consideration of sustainability factors (e.g., the carbon footprint; carbon resilience; the rights, priorities and consent of affected populations).To inform its decisions on climate financing, the G20 commissioned a paper, “Mobilizing Climate Finance,”. Preparation of the paper was led by the World Bank and excluded the UN, despite the fact that the UN had led earlier work on climate financing and climate governance concerns fall under the purview of the UN Framework Convention on Climate Change (UNFCCC). The topics of environment, climate, and energy governance will also be included in a broad-ranging report on global governance that will be presented to Leaders at the French G20 by the UK Prime Minister. Commissioned by President Sarkozy, the report will also encompass governance of the international financial and trading system; global standards; and the G20, itself. In preparing for the
Mexican G20 Summit on June 18-19, 2012, the G20 will wade even deeper into climate “waters,” since “Green Growth” will be on the G20 agenda for the first time (see box, page 2). Although touted as a solution, the dynamics of “Green Growth” can intensify the privatization and financial “enclosure” of nature as speculators include natural resource investments in their portfolios. Many governments and civil society groups are concerned about the impact of the G20 on global governance, including the role of the UN. The head of the UN’s informal Global Governance Group (3G) has stated, “If the G-20 continues to gain `legs,’ some predict that this exclusive grouping will challenge and perhaps even annex other bodies of global governance, such as the UN.”Some claim that is far-fetched, but they also ask: Will the G20 pre-empt the plans of the June 2012 UN Conference on Sustainable Development (Rio +20)to set up the “institutional governance for sustainable development”? Will it sway the already-contested preparations for the upcoming negotiations of the Conference of Parties (COP) of the UNFCCC, which among other things, is attempting to create a Global Climate Fund?G20 Veto Power at the Committee on Food Security? It is astonishing that, at the October 2011 negotiations in the UN Committee on Food Security (CFS),the G20 had effective “veto power” over the proceedings. That is, government representatives asserted that they could not contradict the G20 Ministers, on key issues – commodity price volatility and biofuels – under negotiation. What had the G20 done on biofuels? The G20 Finance Ministers commissioned research on the topic from ten international institutions, which concluded that “the diversion of food crops for use as fuel represents a permanent re-structuring of the food economy, which will exert continuing pressure on food prices in ways that will adversely affect vulnerable consumers.“ The paper called upon the G20 to eliminate government mandates and subsidies that have spurred the production and consumption of biofuels. But, meeting in June 2011, the G20 Agriculture Ministers communiqué and action plan rejected this call.
Among the many statements and petitions presented to the G20 are the following:
•Global Unions Statement
•A Coalition urging that human rights norms and principles guide decision-making on financial regulation and climate change
•International Working Groupon Trade-Finance Linkages on G20 Development Agenda
•Consumers International
•New Rules for Global Finance (FSB)
•WWF•72 civil society organizations sent this letterto the High-Level Panel on Infrastructure