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WRAP THESIS Nour 2012.Pdf University of Warwick institutional repository: http://go.warwick.ac.uk/wrap A Thesis Submitted for the Degree of PhD at the University of Warwick http://go.warwick.ac.uk/wrap/56244 This thesis is made available online and is protected by original copyright. Please scroll down to view the document itself. Please refer to the repository record for this item for information to help you to cite it. Our policy information is available from the repository home page. The Investment Promotion and Environment Protection Balance in Ethiopia’s Floriculture: The Legal Regime and Global Value Chain By Elias Nour (Elias N. Stebek) A Thesis Submitted in Partial Fulfilment of the Requirements for the Degree of Doctor of Philosophy (PhD) in Law University of Warwick School of Law June 2012 (Final Version: 9 December 2012) CONTENTS Page Contents ............................................................................................................................................... ii Table of Legislation ......................................................................................................................... viii Table of Figures and Tables .............................................................................................................. ix Acknowledgments .............................................................................................................................. x Declaration .......................................................................................................................................... xi Summary ............................................................................................................................................ xii Introduction ................................................................................................................................1 Research Questions ..................................................................................................................... 2 Theoretical Framework ............................................................................................................... 3 Methodology and Methods .......................................................................................................... 5 Content Overview ........................................................................................................................ 6 1. Development as an Objective of Ethiopia’s Investment Promotion ..........................9 1.1. The Objectives of Investment Promotion under Ethiopian Law ........................................9 1.2. The Essence of Development ............................................................................................11 1.2.1 Civilizations and progress : Precursors of the notion of development ...............11 1.2.2 Classical and pre-modern conceptions of ‘ development ’ and ‘ progress ’ ...........13 1.2.3 Modern usages of the term ‘development ’ .........................................................15 1.3. The Path to Economic Development: Conflicting Theories and Policies ........................16 1.3.1 Aspirations toward ‘linear modernization’ and setbacks ...................................16 1.3.2 Evolution of the development doctrine: 1950’s to 1990’s ..................................19 1.3.3 The role of institutions in development: Reciprocal causal relations .................20 1.3.4 Neo-liberal ‘free trade’, infant industry protection and FDI-led takeoff ...........22 1.3.5 Governance and poverty reduction within the neo-liberal frame ......................25 1.3.6 Post-development critics and alternative paths of development ........................26 1.3.7 The notion of the developmental state ................................................................28 1.3.8 Synopsis of Ethiopia’s development pursuits and setbacks ................................29 1.3.9 Assumptions regarding the economic benefits of Ethiopia’s flower sector .......32 Notes ......................................................................................................................................34 ii The Investment Promotion and Environment Protection Balance in Ethiopia’s Floricultur e 2. “Wellbeing” as an Objective of Ethiopia’s Investment Promotion .........................39 2.1. The Notions of Standards of Living and Wellbeing ........................................................39 2.1.1 Minimum standards of material welfare ............................................................39 2.1.2 Sen’s conceptions of standard of living and wellbeing .....................................40 2.1.3 Pogge’s views on freedom from severe poverty ................................................43 2.1.4 Rising standards of living from the perspective of the conspicuous consumer .45 2.1.5 The demographic challenge in enhancing living standards ...............................48 2.1.6 Assumptions in the potential social benefits of Ethiopia’s floriculture .............50 2.2. The Environmental Dimension in Wellbeing ..................................................................52 2.2.1 Challenges in environmental sustainability and their roots ..............................52 2.2.2 Limits to resource-dependent economic growth and the stationary state ..........54 2.2.3 Criticism against limits to exploitation of natural resources .............................57 2.2.4 Avenues of potential environmental risk in Ethiopia’s floriculture ..................59 Notes ......................................................................................................................................60 3. Factors, Challenges and Methods in the Investment, Development and Environment Balance .........................................................................................................64 3.1. Factors in Sustainable Investment Promotion .................................................................64 3.1.1 Key factors for national competitiveness in factor-driven investments .............65 3.1.2 Major factors that attract investment .................................................................66 3.1.3 Environmental compliance standards in the attraction of FDI ..........................68 3.1.4 Dispute settlement in the attraction of foreign investment ................................69 3.1.5 The impact of weak environmental compliance on product standards .............70 3.2. Risks and Opportunities in the Investment-Environment Nexus ......................................72 3.3. Challenges in the Cost-Benefit Analysis of Environmental Assets .................................76 3.3.1 The ethical dimensions of the cost and benefit balance .....................................76 3.3.2 ‘Efficiency’ theories in the cost and benefit balance: An overview ..................77 3.3.3 Non-marketed environmental benefits and cost ................................................79 3.3.4 Problems in the valuation of natural resources ..................................................80 3.4. Environmental Mainstreaming and Sustainability Impact Assessment ...........................84 3.4.1 Environmental mainstreaming in investment projects .......................................84 3.4.2 Environmental Impact Assessment and Sustainability Impact Assessment ......85 December 2012 iii 3.5. Brief Synthesis ..................................................................................................................88 3.5.1 Between ‘ price ’ and ‘ ecological grandeur ’ .......................................................88 3.5.2 Reversing the ‘ race to the bottom ’ ....................................................................89 3.5.3 Between consuming natural wealth and starvation ..........................................90 Notes ......................................................................................................................................92 4. The Legal Framework and Institutional Challenges in the Investment, Development and Environment Balance ........................................................................97 4.1. Pillars of Sustainable Development under the Ethiopian Constitution ............................97 4.2. The right to development under the Ethiopian Constitution ............................................99 4.3. The core features of Ethiopia’s investment laws ............................................................102 4.4. Ethiopia’s Laws on Environmental Compliance in Floriculture ....................................105 4.4.1 Environmental impact assessment ...................................................................105 4.4.2 Environmental pollution control .......................................................................107 4.4.3 The Regulation on codes of practice in floriculture .........................................110 4.5. Institutional Challenges in Environmental Impact Assessment .....................................114 4.5.1 The need for cross-sectoral policies and assessment .......................................114 4.5.2 Disempowered EPA due to sectoral delegation ...............................................115 Notes ....................................................................................................................................120 5. The World Flower Market and Global Value Chain .................................................123 5.1. The World Flower Market ......................................................................................….
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