Qargentina Last Month Ratified a New

LATIN AMERICA ADVISOR A DAILY PUBLICATION OF THE DIALOGUE www.thedialogue.org Monday, October 26, 2020

BOARD OF ADVISORS FEATURED Q&A TODAY’S NEWS Diego Arria Director, Columbus Group POLITICAL Devry Boughner Vorwerk Would the Escazú Chileans Vote CEO, DevryBV Sustainable Strategies Overwhelmingly Joyce Chang Global Head of Research, Agreement Improve to Rewrite JPMorgan Chase & Co. Constitution Paula Cifuentes Director of Economic & Fiscal Affairs, the Environment? In Sunday’s referendum, more Latin America & Canada, than 78 percent voted to rewrite Philip Morris International the country’s dictatorship-era Marlene Fernández constitution. They also voted Corporate Vice President for overwhelmingly for it to be written Government Relations, Arcos Dorados (McDonald’s) by a newly elected body. Page 2 Peter Hakim President Emeritus, Inter-American Dialogue BUSINESS Donna Hrinak Senior VP, Corporate Affairs, Royal Caribbean Group Julius Baer to Jon E. Huenemann Withhold Bonuses Former Corporate and Government Senior Executive Following Scandal Argentina last month ratified the so-called Escazú Agreement. Martín García Moritán, Argen- James R. Jones Julius Baer plans to hold back tina’s then-ambassador to the United Nations, is pictured signing the accord in 2018. // File Chairman, Photo: Argentine Foreign Ministry. millions of francs in bonuses from Monarch Global Strategies two former executives following Craig A. Kelly Argentina last month ratified a new regional environmental a money-laundering scandal in Senior Director, Americas South America. Int’l Gov’t Relations, Exxon Mobil treaty, the so-called Escazú Agreement, which now needs Page 3 John Maisto just one more country in Latin America and the Caribbean to Director, U.S. Education Finance Group Q ratify it in order for it to come into force. What is the Escazú POLITICAL Nicolás Mariscal Agreement, and what are its most important and innovative elements? Chairman, Venezuela’s López Grupo Marhnos What would enactment of the treaty mean in practice, and what impli- Thomas F. McLarty III cations would it have for businesses operating in the region? What has Flees to Spain Chairman, After Years of McLarty Associates held back countries’ ratification of the environmental pact, and is it Beatrice Rangel likely to come into effect soon? Confinement Director, Venezuelan opposition leader AMLA Consulting LLC Leopoldo López, who has been Leila Salazar-López, executive director of Amazon Watch: Jaana Remes in confinement for six years, fled Partner, McKinsey Global Institute “The proposed Regional Agreement on Access to Information, Venezuela and was reunited with Ernesto Revilla Public Participation and Justice in Environmental Matters in his family in Spain. Head of Latin American Latin America and the Caribbean, also known as the Escazú Page 2 Economics, Citi A Gustavo Roosen Agreement, is a historic regional environmental treaty. Its purpose is to Chairman of the Board, set new standards for protection of the environment and human rights in Envases Venezolanos Andrés Rozental the region. If ratified, it would be the first international treaty to include President, Rozental & specific measures for the protection of environmental rights defenders, Asociados a provision that is particularly important for Indigenous peoples across Shelly Shetty Managing Director, Sovereigns the Amazon who are increasingly under threat for defending their rights, Fitch Ratings lives and lands. Of the 23 countries that have signed the agreement over the last few years, 10 have ratified it: Antigua and Barbuda, Argentina, Bolivia, Ecuador, Guyana, Nicaragua, Panama, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Uruguay. It requires one more country to ratify it to enter into force. While the closing period for signatures on the agreement closed at the end of September, there is still hope for the pe- López was reunited with his family. // Photo: Facebook site of López. Continued on page 3

POLITICAL NEWS NEWS BRIEFS Venezuela’s López Chileans Vote to Flees to Spain After Brazil’s Health Regulator Authorizes Import of Rewrite Constitution, Years in Confinement Sinovac’s Potential Vaccine

78 Percent in Favor After years in confinement, Venezuelan opposi- Brazilian health regulator Anvisa said on Friday tion leader Leopoldo López has fled the country that it had authorized São Paulo’s Butantan In- In Sunday’s referendum, Chileans overwhelm- and arrived Spain, The New York Times report- stitute, a biologic research center, to import six ingly voted to rewrite their country’s consti- ed Sunday. López, 49, had spent the last six million doses of a Covid-19 vaccine candidate tution, with 78.3 percent saying the country years confined to jail, house arrest and, since that China’s Sinovac is developing, Reuters needs a new charter to replace the current he helped to lead a failed uprising against reported. CoronaVac, the potential vaccine, is one, which was put in place four decades ago Venezuela’s government in April 2019, in the still in phase 3 clinical trials in Brazil. Anvisa during the dictatorship of Augusto Pinochet, El Spanish ambassador’s residence in Caracas. said it has not yet been registered for wider Mercurio reported. At the same time, 79 per- López arrived Sunday in Madrid, where he was use. Brazilian President Jair Bolsonaro has cent voted to reform the constitution through reunited with family members, the Associated opposed the import of the potential vaccine, a convention of 155 elected members, half of Press reported. Two people close to López saying China did not have the credibility to which will be women, rather than a convention told the wire service he fled Venezuela by sea develop a vaccine for the virus, Bloomberg that is half elected and half made up by mem- on Friday, arriving first in Aruba. The sources News reported. bers of Congress. The vote to elect the mem- spoke on condition of anonymity because bers of the convention is expected on April 11, they were not authorized to discuss López’s and the new constitution is to be put to a vote escape, which reportedly came after months Colombian Vice President in an plebiscite in 2022. In Santiago, thousands of planning. López’s aides said his escape was of people gathered to sing and wave flags in not the result of negotiations with Venezuelan Ramírez Tests Positive celebration of the vote. “This is historic,” Roger President Nicolás Maduro’s government, the for Novel Coronavirus Figueroa, 32, told The Wall Street Journal. “This AP reported. Venezuela’s SEBIN intelligence Colombian Vice President Marta Lucía Ramírez isn’t only a benefit for us, but for our children, agency has detained several people at Spain’s announced Friday that she had tested positive grandchildren and the generations to come.” diplomatic mission in Caracas, including pri- for the novel coronavirus. Ramírez, 66, took a Some Chileans have opposed a constitutional vate security guards and a woman who served test the previous day before a conference with rewrite, saying the current charter has been a meals to López. On Saturday, SEBIN attempted provincial governors, her office said in a state- foundation for the country’s economic progress to search the homes of Spanish National Police ment, which also said she had no symptoms through providing strong protections for private officers assigned to the Spanish diplomatic and “is in good health.” President Iván Duque property and enshrining the autonomy of the compound in Caracas, and Spain’s government was also tested for Covid-19 on Thursday, and central bank. However, others say the current condemned that move, saying it violated the the result was negative, his office said. constitution has hampered social reforms and Vienna convention that governs diplomatic is illegitimate because of its origins during the relations between countries. On Sunday, Pinochet dictatorship. Venezuela’s government criticized Spain saying it assisted the escape of López, whom it called Brazil’s Bank Lending CORRECTION a “terrorist.” On Saturday night, López said Grows 2.1% in September leaving Venezuela was not “simple.” He added, An article in Friday’s Advisor misidentified Brazil’s level of bank lending grew 2.1 percent “We’ll continue working day and night to attain the Argentine bondholder groups that in September as compared to August, driven the freedom that we Venezuelans all deserve.” criticized the country’s government over by corporate loans, Reuters reported Friday. His Popular Will party added, “After seven years its economic plans. The statement came Corporate loans grew 3.1 percent, while loans of persecution and unjust imprisonment inside from the Exchange Bondholder Group and to individuals increased 1.4 percent, according Venezuela, Leopoldo López is still not totally the Argentina Creditor Committee. A third to the Brazilian banking association, Febraban. free, like all Venezuelans, so long as there group, the Ad Hoc Argentine Bondholder In the 12-month period ending in September, exists a dictatorship that violates the human Group, did not sign the statement. The Brazil’s bank lending grew 13.3 percent, up rights of the people.” In 2015, López was sen- “Ad Hoc Group of Argentina Exchange 1.2 percent from the 12-month period through tenced to nearly 14 years in prison after being Bondholders,” which was mentioned in the August, Febraban said. Government loan convicted of inciting violence during deadly article, does not exist. programs to help small companies weather the anti-government protests. economic downturn are fueling growth, it said.

BUSINESS NEWS FEATURED Q&A / Continued from page 1

riod to be extended. Although the Peruvian law and the international treaties Colombia Julius Baer Holding government signed the Escazú Agreement, has signed, including the protection of busi- Back Bonuses After the ratification process was shelved earlier ness information, private investment and last week by the Foreign Relations Com- trade secrets, as well as patents. Articles 2c, Laundering Scandal mittee of Congress, alleging a ‘violation 2d, 6.9 and 7.17 of the agreement generate of national sovereignty’ and ‘loss of state conflicts of interest by giving foreign citi- Swiss private banking company Julius Baer rights’ over the Amazon due to business lob- zens from member states equal access to is planning to withhold millions of francs in by claims of international NGO involvement, bonuses from two of its former chief execu- supposedly guided by the political interests tives following a money-laundering scandal in of northern countries. In reality, national and It limits local South America during their times heading the international business interests are violating communities’ rights wealth manager, the Financial Times reported human rights and acting with impunity with to define their devel- Friday, citing sources familiar with the matter. government support. In Brazil, Bolsonaro’s opment projects The bank will withhold more than 2.5 million regime is actively undermining the kind of and participate in Swiss francs ($2.8 million) of former CEO Boris groundbreaking socioenvironmental reforms the management of Collardi’s total deferred pay after an internal proposed by the Escazú treaty. It is precisely their territory...” investigation concluded he failed to properly for this reason that upholding its tenets — Paola Holguín oversee the private bank, which has 400 billion is urgently needed to protect the rights of in assets. Collardi left in 2017 after eight years threatened Indigenous peoples while ensur- leading Julius Baer. A spokesman for Collardi ing transparency and public engagement in company information and documents. And confirmed to the Financial Times an outstand- the country’s development trajectory.” third, the central protections for sustainable ing deferred cash compensation of about 1.3 development in the agreement are already million francs, adding that he was not aware Paola Holguín, senator rep- provided for in our legal system, such as the of any other Julius Baer outstanding deferred resenting Colombia’s ruling right of access to information, the right to compensation owed to Collardi. Julius Baer Centro Democrático party: “As a participation and access to justice. Colom- is also planning to withhold a similar amount A senator, I swore to comply with bia’s legal system is broad and sufficient from Bernhard Hodler, who was the former the Constitution and the law while watching to guarantee that we can produce while chief risk officer who succeeded Collardi be- over the interests of my fellow citizens. conserving, and conserve while producing, fore being replaced in 2019. Leadership of the With this in mind, I have always fought for without falling into the so-called dictatorship wealth manager’s Latin American business and issues such as sustainable development, of fundamentalist environmentalism.” compliance staff involved were also reportedly legal security and sovereignty. Because of under investigation and will have some of their this, and after listening to various sectors in Erika Guevara-Rosas, Americas pay held back. Collardi is reportedly fighting my country, I oppose the Escazú Agreement director at Amnesty Interna- the move. Hodler did not immediately respond for several reasons. First, incorporating the tional: “The Escazú Agreement to the Financial Times’ requests for comment, agreement is a risk to national sovereignty. A is a binding instrument for Latin and a spokesman for Julius Baer declined to Article 7.3 of the agreement establishes that American and Caribbean (LAC) states, based comment. The Swiss Financial Supervisory issues related to environmental matters will on international standards that promote the Authority, or Finma, earlier this year penalized be subject to public participation, and this protection of a healthy environment and the company for not doing enough to combat concept explicitly includes land use planning those who defend it. This agreement com- money laundering in relation to the alleged cas- and policymaking. In other words, it limits plements rights such as access to informa- es of corruption linked to Venezuelan state oil local communities’ rights to define their tion, justice and reparation, and it incorpo- company PDVSA and world soccer federation development projects and participate in the rates public participation in decision-making, FIFA, International Investment reported. Finma management of their territory, instead trans- applying all these principles to environmen- ordered Julius Baer to pursue effective mea- ferring it to their peers and even opening the tal protection. With this agreement, states sures to comply with its legal obligations in doors to the judicialization of governmental, must ensure access to administrative and fighting money laundering, including changes legislative or community decisions without judicial mechanisms for recourse in case in how it recruits and manages client advisors, internal procedures. Second, some articles of adverse environmental impacts, and as well as in how it adjusts remuneration and of the agreement are contrary to Colombian effective mechanisms for disclosure and disciplinary policies. Continued on page 4

FEATURED Q&A / Continued from page 3 LATIN AMERICA ADVISOR is published every business day by the Inter-American Dialogue, Copyright © 2020 access to information so that the public can fostering transparency and more active civil demand more transparency, accountability society participation in natural resource proj- Erik Brand and public participation from authorities on ects. For the first time, a binding provision Publisher [email protected] projects that affect the environment. It also on human rights defenders in environmental emphasizes the protection of environmental matters has been introduced. The treaty Gene Kuleta Editor defenders, which is particularly relevant provides a framework of societal expecta- [email protected] since LAC is the world’s most dangerous tions, confirming that access to information Anastasia Chacón González region for environmentalists. With regard is an intrinsic part of the social media age. Reporter & Associate Editor to businesses, international law obligates The discussion on Escazú takes place during [email protected] states to protect against human rights a trying time that has clearly exposed chal- violations committed in their territory and/

or jurisdiction by nonstate actors. There- For the first time, Michael Shifter, President fore, states must legally require companies Rebecca Bill Chavez, Nonresident Senior Fellow to provide information on the possible a binding provision Sergio Bitar, Nonresident Senior Fellow negative impacts of their activities on the on human rights Joan Caivano, Senior Advisor environment and on human rights linked defenders in environ- Michael Camilleri, Director, Rule of Law Program to environmental protection. This informa- mental matters has Kevin Casas-Zamora, Nonresident Senior Fellow tion should include measures to mitigate been introduced.” Héctor Castro Vizcarra, Nonresident Senior Fellow risks and prevent the negative impacts. Julia Dias Leite, Nonresident Senior Fellow — Diana Chavez The region overwhelmingly supports the Ariel Fiszbein, Director, Education Program Escazú Agreement (24 of the 33 countries Peter Hakim, President Emeritus have already signed it and just one more lenges the region faces. ECLAC estimates Nora Lustig, Nonresident Senior Fellow country needs to ratify it for it to enter into that 2.7 million formal businesses will close, Margaret Myers, Director, Asia and force). We are optimistic the treaty will be and unemployment will affect 44 million peo- Latin America Program Manuel Orozco, Senior Fellow implemented soon, meaning that the region ple, mostly women. With a 54 percent rate Xiaoyu Pu, Nonresident Senior Fellow will start to properly respond to the climate of informality, it is clear that a substantive Jeffrey Puryear, Senior Fellow emergency and the crisis of violence against investment is required to guarantee an inclu- Mateo Samper, Nonresident Senior Fellow environmental defenders.” sive recovery. The private sector will play a Tamar Solnik, Director, Finance & Administration decisive role through responsible investment Lisa Viscidi, Director, Energy Program Diana Chavez, executive that creates the conditions for growth and Denisse Yanovich, Director of Development, director of the Private Sec- development. Rule of law, multilateralism External Relations & Special Projects tor Regional Centre for the and public-private relationships remain cru- Support of U.N. Sustainable cial for a successful implementation of the Latin America Advisor is published every A business day, except for major U.S. holidays, Development Goals (SDGs): “While the Escazú Agreement. Shall the state not have by the Inter-American Dialogue at current conversation on development tries the capacity to balance the conversation and 1155 15th Street NW, Suite 800 Washington, DC 20005 to place sustainability as a strategic factor prevent subjective expectations derived from www.thedialogue.org for global progress and the achievement of the agreement, it could prevent the 21st ISSN 2163-7962 the SDGs, Latin America still finds a rather century from being marked by sustainability Subscription inquiries are welcomed at asymmetrical conversation among multina- and transparency.” [email protected] tional companies operating in international The opinions expressed by the members of the Board of markets and the local authorities of com- The Advisor welcomes comments on its Q&A Advisors and by guest commentators do not necessarily munities that host these investments. The section. Readers can write editor Gene Kuleta represent those of the publisher. The analysis is the sole Escazú Agreement is the first Latin American at [email protected]. view of each commentator and does not necessarily represent the views of their respective employers or firms. multilateral environmental treaty aimed at The information in this report has been obtained from reliable sources, but neither its accuracy and completeness, nor the opinions based thereon, are guaranteed. If you have any questions relating to the contents of this publication, contact the editorial offices of the Inter-American Dialogue. Contents of this report may not be reproduced, stored in a retrieval system, or transmitted without prior written permission from the publisher.