International action on Just Transition: what’s been accomplished, and proposals for the future

ituc logoJust Transition – Where are we now and what’s next? A Guide to National Policies and International Climate Governance  was released on September 19 by the International Trade Union Confederation, summarizing what has been done to date by the ITUC and through  international agencies such as the  ILO, UNFCCC, and the  Paris Agreement.  It also provides short summaries of some transition situations, including the Ruhr Valley in Germany, Hazelwood workers in the LaTrobe Valley, Australia, U.S. Appalachian coal miners and the coal mining pension plan, Argentinian construction workers, and Chinese coal workers.  Finally, the report calls for concrete steps to advance Just Transition and workers’ interests.

The report defines Just Transition on a national or regional scale, as  “an economy-wide process that produces the plans, policies and investments that lead to a future where all jobs are green and decent, emissions are at net zero, poverty is eradicated, and communities are thriving and resilient.” But the report also argues that Just Transition is important for companies, with social dialogue and collective bargaining as key tools to manage the necessary industrial transformation at the organizational level.  To that end, the ITUC is launching “A Workers Right To Know” as an ITUC campaign priority for 2018, stating, “Workers have a right to know what their governments are planning to meet the climate challenge and what the Just Transition measures are. Equally, workers have a right to know what their employers are planning, what the impact of the transition is and what the Just Transition guarantees will be. And workers have a right to know where their pension funds are invested with the demand that they are not funding climate or job destruction.”

The ITUC report makes new proposals. It calls on the ILO to take a more ambitious role and to negotiate a Standard for Just Transition by 2021, carrying on from the Guidelines for a just transition towards environmentally sustainable economies and societies forAll  (2015).   The ITUC also states “expectations” of how Just Transition should be given greater priority in the international negotiation process of the United Nations Framework Convention on Climate Change (UNFCC), so that:  Just Transition commitments are incorporated into the Nationally Determined Contributions (NDCs) of countries; Just Transition for workers becomes a permanent theme within the forum on response measures under the Paris Agreement, and Just Transition is included in the 2018 UNFCCC Facilitative Dialogue. It also calls for the launch of a “Katowice initiative for a Just Transition” at the COP23 meetings to take place in Katowice, Poland in 2018, “to provide a high-level political space”.  Finally, the ITUC calls for expansion of the eligibility criteria of the Green Climate Fund to allow  the funding of Just Transition projects.

Just Transition – Where are we now and what’s next? is a Climate Justice Frontline Briefing from the International Trade Union Confederation, with support from the Friedrich Ebert Stiftung and is based upon Strengthening Just Transition Policies in International Climate Governance by Anabella Rosemberg, published as a Policy Analysis Brief by the Stanley Foundation in 2017.

Other Just Transition News:  In Calgary in September, the  Just Transition and Good Green Jobs in Alberta Conference took place, sponsored by BlueGreen Alberta, with updates on national and provincial developments and with a global perspective from Samantha Smith, Director of the ITUC’s Just Transition Centre as the keynote speaker.  A companion event, the 3rd Annual Alberta Climate Summit, hosted by the Pembina Institute and Capital Power,  also included a session on  “Just Transition: Labour and Indigenous Perspectives” which featured Andres Filella (Metis Nation of Alberta), Samantha Smith(Just Transition Centre) and Heather Milton-Lightening ( Indigenous Climate Action Network).

In advance of these events, the Alberta government had announced  on  September  11  the launch of  the Coal Community Transition Fund to assist Alberta communities impacted by the mandated coal-phase out in the province.   Municipalities and First Nations can apply for grant funding to support economic development initiatives that focus on regional partnerships and economic diversification.  Further funding is anticipated from the federal government, with retraining programs also expected after the Advisory Panel on Coal Communities  provides its recommendations in a report to the government, expected this fall.

U.N. Working Group makes recommendations to protect human rights, labour rights in Canada

The United Nations Office of the High Commissioner for Human Rights released a  Statement at the end of visit to Canada by the United Nations Working Group on Business and Human Rights on June 1. This is a preliminary document – the official mission report will be presented to the 38th session of the Human Rights Council in June 2018, and should be worth watching for.  The preliminary Statement provides a summary of the results of fact-finding meetings with government officials, business organizations related to Canada’s mining and oil and gas industries, and Indigenous people. Most importantly, it makes a number of recommendations regarding human rights, labour rights, environmental and social impact consultation, and the right to consult for Indigenous people.

Some Highlights:

“Part of the backdrop to our visit were visible protests by indigenous communities to several large-scale development projects, such as the proposed expansion of the Trans Mountain oil pipeline, the construction a large-scale hydroelectric dam (Site C Dam), and continued expansion of development projects of extractives industries. Several of these cases have also been repeatedly raised by UN human rights human rights mechanisms, such as the situation of the Lubicon Cree Nation, whose territories are affected by extensive oil sands extraction. In several indigenous territories, extensive mining and oil and gas extraction are accompanied by significant adverse environmental impacts affecting the right to health.”

Regarding the established “duty to consult” with Indigenous people regarding mining projects, the Working Group encourages the Canadian government to ratify the ILO Convention No. 169 and for provincial and the federal government to promote more inclusive consultation regarding development projects.

The Working Group also urges the federal government to “follow up” on the April 2017 recommendations by the Expert Panel regarding Environmental Assessment in Building Common Ground: A New Vision for Impact Assessment in Canada  “to include indigenous peoples in decision-making at all stages through a collaborative process that is developed in partnership with impacted indigenous communities.”

Regarding the dam breach and tailings spill at the Mount Polley mine, the Working Group states: “We encourage the British Columbia government to complete expeditiously the impact study, continue to monitor closely the short-term and long-terms impacts of the tailings discharge, and communicate more widely their findings and proposed actions. Moreover, the provincial government should consult more broadly with indigenous communities who may have concerns about the breach and its impact on their lives. We also recommend the British Columbia government to consider establishing an independent body to assume compliance and monitoring of mining regulations, as recommended in the Auditor General’s report”.

Regarding the Westray Law, the Working Group states: “We heard concerns that the Westray law is not being properly implemented and enforced. We heard that there was a lack of coordination between key government parties, to secure sites of industrial accidents, for further investigation and inspection. We note that the Government of Alberta recently signed a new memorandum of understanding with ten police forces and Alberta Justice,  that defines protocols for notification, investigation and communication between departments when there is a serious workplace incident. Other provinces should follow Alberta’s lead”.

Regarding the need to protect the right to peaceful protest: “During our visit, we were told of the criminalization of peaceful protests and the use of security personnel and police to break up and arrest activists who were exercising their democratic right to protest against extractive projects both within and outside Canada. The government should work all relevant stakeholders to ensure more space for peaceful dissent and protest at home and abroad.”  And also: referring to Ontario and Quebec,  “we would encourage other provincial governments to develop similar Anti-SLAPP legislation. “

In conclusion: The Working Group revives a 2006 proposal for an Ombudsperson with a mandate to investigate allegations of business-related human rights abuse, and “we encourage the federal government to work together with provincial governments to develop a comprehensive national action plan on business and human rights. ”

For Oxfam Canada’s summary of the Working Group, see the Huffington Post article here , and here for the reaction of the Canadian Network on Corporate Accountability .

The Working Group Statement was also concerned with human rights abuses overseas by Canadian mining companies: see the analysis of the Working Group statement by Human Rights Watch here, or see “The ‘Canada Brand’: Violence and Canadian Mining Companies in Latin America“,  an extensive report in the Osgoode Law  Research Paper Series (December 2016).

Public sector pension administrators are recognizing climate risk, protecting pensions of public employees in Ontario and New York City

OPTrust administers the Ontario Public Service Employees Union (OPSEU ) Pension Plan, with almost 87,000 members and retirees.  On January 31, it became a leader in Canadian pension plan administration by releasing two documents:   Climate Change: Delivering on Disclosure, a position paper, and OPTrust: Portfolio Climate Risk Assessment, a report by Mercer consultants, which provides an assessment and analysis of the fund’s climate risk exposure .  The  OPTrust  press release  states: “For pension funds, climate change presents a number of complex and long-term risks. In Canada alone, pension funds manage well over $1.5 trillion in assets, which brings a real responsibility to collectively seek innovative approaches to modeling carbon exposure and its impact across portfolios.”   The position paper, Delivering on Disclosure, includes a call for collaboration amongst other financial actors to develop standardized measures for carbon disclosure.  It is noteworthy that OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by the union,  OPSEU,  and five by the employer, the Government of Ontario.

In a February 2 press release  affecting  the pension plans of New York’s public employees, teachers, firefighters and police,  the Office of the Controller of New York City announced:  “the Trustees of the New York City Pension Funds … will conduct the first-ever carbon footprint analysis of their portfolios and determine how to best manage their investments with an eye toward climate change. In the 21st century, companies must transition to a low-carbon economy, and a failure to adapt to the realities of global warming could present potential investment risks.”  The  New York City pension system  has been a leader in addressing climate change risks, including an initiative called the Boardroom Accountability Project  , which began in 2014 to give investors the ability to ensure boards are diverse and “climate-competent”.

On this point, a January 2017 report from Vancouver-based Shareholder Association for Research and Education (SHARE) found that   “… companies in Canada’s most carbon-intensive sectors are not demonstrating ‘climate competency’ in the boardroom.”   The report, Taking Climate on Board: Are Canadian energy and utilities company boards equipped to address climate change? urges greater transparency from boards at publicly-traded corporations, stating “Investors need boards to demonstrate that they are “climate-competent” – that they understand and prioritize climate change risks to long-term value, including the physical, legal, reputational, stranded asset and regulatory risks related to climate change.”   The report is based on a  review of the public disclosures from 52 companies across Canada’s energy and utilities sectors,  using 3 measures: board skills and experience, oversight, and risk disclosure. It concludes that “more companies are starting to talk about climate change in their reporting, but only three boards disclosed any expertise amongst their members on the issue, and no board included climate change knowledge in its board competency matrix.” The full report is here.  (On another note, SHARE has walked the walk by filing shareholder resolutions with Enbridge Inc., and met with TD Bank regarding their environmental and social aspects of their investments  in  the Dakota Access Pipeline. See “The Dakota Access Pipeline and Indigenous Rights.” )

Small steps for the miners behind electric vehicles and smart phones

Cobalt is a key ingredient in the lithium-ion batteries that power smartphones, laptops and electric cars. 60% of the world’s supply is mined in  Congo, according to “The Cobalt Pipeline” (September 2016),  a Washington Post special report which documented the appalling working conditions of the “artisanal miners”.  Occupational health and safety concerns for  miners was also  expressed in  “The Battery Revolution is exciting, but Remember they Pollute too”, by Carla Lipsig Mumme and Caleb Goods in The Conversation (June 2015).

In a December 20 article,  the Washington Post reports on two new initiatives to curb “the worst forms of child labor” and other abusive workplace practices in the supply chain for cobalt. The first, the Responsible Cobalt Initiative, is being  led by  the Chinese Chamber of Commerce for Metals, Minerals and Chemicals Importers and Exporters, and supported by the Organization for Economic Cooperation and Development (OECD), with members pledging to follow OECD guidelines  which call for companies to trace how cobalt is being extracted, transported, manufactured and sold. Apple, HP, Samsung SDI and Sony have signed on.

The second initiative, the Responsible Raw Materials Initiative (RRMI) has been launched by the Electronic Industry Citizenship Coalition , a nonprofit group sponsored by more than 110  electronics companies, and  “dedicated to improving the social, environmental and ethical conditions of their global supply chains.” The EICC states that it “engages regularly with dozens of non-member organizations including civil society groups, trade unions and other worker’s groups, academia and research institutions, socially responsible investors, and governmental and multilateral institutions.”  Ford Motor Company is a member of the Responsible Raw Materials Initiative, by virtue of being the first auto manufacturer to join the EICC. ( Press release is here (February 2016). Ford has sought to brand itself as a leader in ethical supply chain management   ; see their report,  Going Further towards Supply Chain Leadership . Tesla, the most high-profile electric vehicle manufacturer, is said to be considering membership in the RRMI. According to a report from Energy Mix (June 24, 2016) “Tesla’s Ambitions Demand ‘Unprecedented Quantities’ of Key Minerals” , including lithium, nickel, cobalt, and aluminum to produce vehicle batteries.  As of January 2017, Energy Mix also reported  that  Tesla started mass production at its lithium-ion battery Gigafactory in Nevada, which will be the world’s largest when it is complete in 2018 .

tesla-gigafactory

Tesla Gigafactory, Nevada.  Photo from the Tesla website .

Canada Pension Plan Investment Board lags international financial community on recognition of climate change risks and stranded assets

In what the WWF has called   “a landmark moment for responsible investment in Europe” , the European Parliament voted in November 2016  to mandate that all workplace pension administrators must consider climate risk and risks “related to the depreciation of assets” -stranded assets-  in investment decisions.  It also requires greater transparency about investment policies. Individual governments of the EU now have two years to pass into national law this updated version of the  existing Institutions for Occupational Retirement Provision (IORP) Directive. Currently, the directive would affect occupational pension plans affected covering approximately 20% of the EU workforce, mostly in the United Kingdom, the Netherlands, and Germany .  A September 2016 Briefing Note from the European Parliament  details the administrative/political evolution of the Directive; a December  article from Corporate Knights  or  Go Fossil Free or Reuters  provide summaries.

In December 14, 2016, the Task Force on Climate-Related Financial Disclosure, chaired by Michael Bloomberg,  released its report and recommendations  to the Financial Stability Board, a G-20 organization chaired by Mark Carney. An article by the two men appeared in The Guardian, capturing the gist of the work:  “We believe that financial disclosure is essential to a market-based solution to climate change. …. A properly functioning market will price in the risks associated with climate change and reward firms that mitigate them. As its impact becomes more commonplace and public policy responses more active, climate change has become a material risk that isn’t properly disclosed.” The Task Force calls for companies to make voluntary disclosure of climate risks to their business,  to help  investors, lenders and insurance underwriters to manage material climate risks, and ultimately to make the global economic and financial systems more stable.   A 60-day public consultation period began with release of the report; an updated report, incorporating that input,  will be released in June 2017.  The Task Force report was summarized in   “Climate disclosure framework creates a better environment for investors” in the  Globe and Mail Bloomberg News also reported on another recommendation, “Carney Panel Urges CEO Compensation Link With Climate Risk ” , stating that the time has come for organizations to provide detailed reporting of how manager and board member pay is tied to climate risks.  (See a Dec. 1 Reuters article about Royal Dutch Shell’s moves to link CEO bonuses to GHG reduction).

In Canada, the Canada Pension Plan Investment Board, which administers the assets of the national public pension fund, seems to be standing on the sidelines.  A recent article in the Globe and Mail was written by the director of the CPPIB Sustainable Investment department , which is described in  more detail in their 2016 Report on Sustainable Investing . The report states (page 11)   “ CPPIB has established a cross-departmental Climate Change Working Group to consider how physical risks, as well as technological, regulatory and market developments will impact climate change-related risks, and create opportunities, in the future. …. This review, which will take some time, is being done from a long-term perspective in light of how the gradual transition to a lower-carbon global economy might unfold….  On the topic of divestment and climate change, research has shown that investors with longer horizons tend to be more engaged with the companies that they invest in, and CPPIB is a case in point. As responsible owners, we believe that in many cases selling our shares to investors who might be less active in terms of considering material risks, including climate change, would be counterproductive.”   In light of this very slow approach, Friends of the Earth (FOE) has been frustrated in its divestment campaign for the CPPIB in 2016 ;  FOE maintains a petition website, Pensions for a Green Future, which calls for the CPPIB to, among other things,  “report immediately to its 19 million members on the carbon footprint and exposure to climate solutions of our CPP investment portfolio” and “to replace climate polluting investments with those in green energy, technologies and infrastructure that support Canada’s commitment to act to avoid 1.5°C of warming.” The CPPIB discloses the companies it is invested in here  .

In contrast to the CPPIB, the Caisse de dépôt et placement du Québec (CDPQ),  the second largest pension fund manager is Canada,  is highlighted in a new report by the World Economic Forum  as “ one of the most important institutional investors in wind power” for its investment of  close to $2.5 billion (US) in both onshore and offshore wind projects in Europe and North America, starting in 2013 with a tentative investment in the Invenergy , and now including the London Array wind farm in the outer Thames estuary.  The Caisse statements on environmental and social responsibility are here ; it is a signatory to the U.N.  Principles for Responsible Investment (PRI), a member of the Carbon Disclosure Project and the Carbon Water Disclosure Project, and endorses the Extractive Industries Transparency Initiative , which monitors the oil and gas industry .