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Energy and Environment

The OSCE recognizes that sustainable management of energy resources is one of the key challenges of the day, not only in the OSCE region, but across the globe.

In Kyiv (2013), the participating States acknowledged the link between energy-related activities and the environment, and encouraged participating States to make best use of the OSCE as a platform for a broad dialogue on good governance and transparency in the energy sector renewable energy and energy efficiency, new technologies, technology transfer and green growth. The OSCE has also focused its work on security issues related to energy, including protection of energy networks from natural and man-made disasters.

Staff Contact: Paul Massaro, policy advisor

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  • High Crimes and Pipelines

    Corruption continues to plague Ukraine’s energy sector. Despite the success of reforms to its state-owned gas company, Naftogaz, rampant corruption in regional distribution companies and elsewhere prevents Ukraine’s energy sector from realizing its potential. Coupled with the Russian assault on energy security in the form of Nord Stream 2, Ukraine finds itself at a crossroads: will it continue on the reformist path toward energy independence, or will its energy sector once again become defined by corruption? This briefing reviewed the challenges facing Ukraine’s energy sector with a focus on corruption’s role in preventing necessary reforms. Speakers provided expertise and insight as to how Ukraine’s energy sector fits into the larger picture of Ukraine’s fight against corruption. They also examined Russia’s malign influence in the country. Finally, the briefing offered policy responses to these issues.

  • Corruption in Ukraine's Energy Sector Focus of Upcoming Helsinki Commission Briefing

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following briefing: HIGH CRIMES AND PIPELINES: CURBING CORRUPTION IN UKRAINE’S ENERGY SECTOR Monday, June 18, 2018 3:30 p.m. Dirksen Senate Office Building Room G11 Live Webcast: www.facebook.com/HelsinkiCommission Corruption continues to plague Ukraine’s energy sector. Despite the success of reforms to its state-owned gas company, Naftogaz, rampant corruption in regional distribution companies and elsewhere prevents Ukraine’s energy sector from realizing its potential. Coupled with the Russian assault on energy security in the form of Nord Stream 2, Ukraine finds itself at a crossroads: will it continue on the reformist path toward energy independence, or will its energy sector once again become defined by corruption? This briefing will review the challenges facing Ukraine’s energy sector with a focus on corruption’s role in preventing necessary reforms. Speakers will provide expertise and insight as to how Ukraine’s energy sector fits into the larger picture of Ukraine’s fight against corruption. They will also examine Russia’s malign influence in the country. Finally, the briefing will offer policy responses to these issues. The following panelists are scheduled to participate: Ambassador Bill Courtney, Former U.S. Ambassador to Georgia and Kazakhstan and career foreign service officer Ed Chow, Senior Fellow, Center for Strategic and International Studies Nataliya Katser-Buchkovska, Member of the Ukrainian Verkhovna Rada

  • A New Ocean in the North: Perils and Possibilities

    Increasingly navigable waters and technological advances have opened the Arctic to further exploration, and an abundance of natural resources is driving investment in the region. Given the Arctic’s economic potential and environmental implications, the “High North” is likely to become a new theater of international engagement. As one of eight Arctic nations, the United States holds a vested interest in encouraging economic development in the region. However, U.S. Arctic infrastructure is underdeveloped and is dwarfed by Russia’s investment in the region. Moreover, like other Arctic nations, the United States must contend with the challenge posed by melting ice caps and rising sea levels. The briefing examined the importance of the development of Arctic infrastructure as the Organization for Security and Cooperation in Europe’s (OSCE) least-developed region becomes more accessible. It also analyzed the challenges faced by the international community to promote greater cooperation in unlocking the region’s potential.

  • Arctic Development to Be Discussed at Helsinki Commission Briefing

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, in conjunction with the Senate Arctic Caucus, Senate Oceans Caucus, and Congressional Arctic Working Group, today announced the following briefing: A NEW OCEAN IN THE NORTH: PERILS AND POSSIBILITIES Thursday, October 5, 2017 3:30 PM – 5:00 PM Dirksen Senate Office Building Room G11 Live Webcast: www.facebook.com/HelsinkiCommission Increasingly navigable waters and technological advances have opened the Arctic to further exploration, and an abundance of natural resources is driving investment in the region. Given the Arctic’s economic potential and environmental implications, the “High North” is likely to become a new theater of international engagement. As one of eight Arctic nations, the United States holds a vested interest in encouraging economic development in the region. However, U.S. Arctic infrastructure is underdeveloped and is dwarfed by Russia’s investment in the region. Moreover, like other Arctic nations, the United States must contend with the challenge posed by melting ice caps and rising sea levels. The briefing will examine the importance of the development of Arctic infrastructure as the Organization for Security and Cooperation in Europe’s (OSCE) least-developed region becomes more accessible. It will also analyze the challenges faced by the international community to promote greater cooperation in unlocking the region’s potential. The following panelists are scheduled to speak: Julie Gourley, Senior Arctic Official, U.S. Department of State Iina Peltonen, Embassy of Finland in the United States Rear Admiral Michael F. McAllister, Commander, 17th Coast Guard District, U.S. Coast Guard Melanie Bahnke, President and CEO, Kawerak, Inc. Mark Smith, CEO, Vitus Energy

  • OSCE Debates Environmental Policy and Economic Development in Prague

    By Paul Massaro, Policy Advisor From September 6 to September 8, 2017, the OSCE convened the 25th Concluding Meeting of the Economic and Environmental Forum. This annual conference brings together participating States for a wide-ranging discussion on policy as relates to the Second Dimension of the OSCE, or economic and environmental issues. The theme of the 2017 conference was “Greening the Economy and Building Partnerships for Security in the OSCE Region,” a topic selected by Austria, the current OSCE Chair-in-Office. At a time when natural disasters like Hurricanes Harvey, Irma, and Maria are devastating U.S. communities, such a discussion could not be more relevant. Add to that the joblessness and low growth rates that continue to plague many parts of the region and you have a broad debate on the issues that most impact the everyday life of citizens of the OSCE region. The Forum took the form of a series of thematic panels featuring experts drawn from the UN, the NGO community, and academia, as well as from the relevant ministries of OSCE participating States. Forum participants were particularly concerned with the effect that climate change is having on the frequency and magnitude of natural disasters, as illustrated by the extreme weather in the Caribbean and the United States. Much of the conference was devoted to discussing energy efficiency measures and renewable energy as a means to counteract the effects of burning fossil fuels on the environment. Experts agreed that energy efficiency and renewable energy are not separable concepts: the latter must be pursued to achieve the former. Participants were also deeply concerned about youth unemployment, especially in relation to violent extremism. Many participating States struggle with unemployment or underemployment, which exacerbates the factors that lead youth to radicalize. Experts discussed countering violent extremism through more flexible labor market policies as well as addressing the exploitation of unemployment or underemployment by extremist recruiters. Connectivity—transport, trade facilitation, and economic cooperation—was also discussed extensively. (Connectivity is distinct from economic integration, which envisions a deeper level of policy harmonization.) Experts and representatives from participating States generally agreed that two regions in particular could profit mightily from expanded connectivity: Southeastern Europe, or the Balkans region, where important steps toward greater connectivity are being made, and Central Asia, which remains among the regions with the lowest interregional trade in the world. The economic and environmental situation in the Eastern Donbas was also an important part of the discussion. Experts expressed severe concern that the shelling in the industrial region could lead to ecological disaster should, for example, the chemical plants that dot the area be hit and their chemicals seep into drinking water. Participants also discussed how to reestablish connectivity in this region, which once was a cohesive economic sphere. However, representatives from participating States argued that any discussion of regional connectivity would be for naught until Russia ceases its backing of militants in the region and enables a ceasefire to take effect. Generally speaking, the mood of the conference was one of consensus. Despite disagreements on certain issues, participating States tend to be of one mind when it comes to the need to prevent and prepare for natural disasters, increase energy efficiency, and encourage job and business creation, all topics that made up the majority of the discussions at the 25th Concluding Meeting of the Economic and Environmental Forum. Although minor disagreements cropped up in all of these topics, they were ephemeral and did not lead to prolonged debate. This general consensus may be a result of the fact that the arguably most controversial aspect of the OSCE’s Second Dimension, anti-corruption, was absent from all discussions. This is because this topic was addressed at the 2nd Preparatory Meeting of the 25th OSCE Economic & Environmental Forum in Astana and likely also because it was not a critical aspect of the theme of the Chair-in-Office. Nonetheless, at least a single panel on the topic would have been a welcome addition given its central importance to good governance. All in all, the Forum was a smooth and useful exercise that provided participating States with many worthwhile insights. Paul Massaro attended the conference as a representative of the U.S. Helsinki Commission.

  • Taming the OSCE’s Least-Developed Region: the Arctic

    By Paul Massaro, Policy Advisor, U.S. Helsinki Commission, Dave Zwirblis, Coast Guard Fellow, Office of Chairman Roger F. Wicker, Neal McMillian, NOAA Fellow, Office of Chairman Roger F. Wicker, and Alanna Schenk, Intern, U.S. Helsinki Commission The Arctic region—with its rapidly growing ecological, political, and economic importance—is almost as large as Africa, yet it is often overlooked in critical policy debates. As an Arctic nation and one of two nuclear powers within the region, the United States is central to Arctic development and maintaining the stability of the region. Despite including all eight Arctic nations, the Organization for Security and Cooperation in Europe (OSCE) has been largely dormant when it comes to Arctic issues. However, the OSCE Parliamentary Assembly (OSCE PA) includes a Special Representative for Arctic Issues, Ola Elvestuen of Norway, and has passed resolutions on the Arctic at its Annual Sessions, including as part of the 2010 Oslo Declaration and the 2013 Istanbul Declaration. Given the growing importance of the Arctic, the OSCE has many opportunities to increase its engagement in the Second Dimension—its portfolio of economic and environmental issues—in ways that would supplement the work of the Arctic Council, the primary intergovernmental actor in the region. Economic Opportunities In the near future, there likely will be a significant rise in human activity along the Northern Route. As sea ice melts, new shipping lanes are opening up offering unprecedented access to trade routes, natural resources, and even tourism opportunities. For example, the CRYSTAL SERENITY, a 1,000 passenger luxury cruise liner, is conducting a first of its kind month-long Arctic cruise through the Northwest Passage in summer 2017.  Increased maritime traffic and engagement stemming from these economic opportunities present numerous new challenges for the Arctic nations.  The Arctic region remains underdeveloped and lacking in critical infrastructure. The absence of continuous and robust U.S. and international community assets means response to any type of transportation or environmental disaster in these remote areas would be extremely slow and difficult to execute. Additionally, only 4.7 percent of the U.S. Arctic and 9 percent of the total Arctic waterways are charted to modern navigation standards.  Any increase in economic development and shipping in the Arctic will require cooperation from all stakeholder nations to build up the emergency infrastructure and provide the icebreaker vessels necessary to conduct pollution response and cleanup, search and rescue, and maritime security operations. Currently, the U.S. Coast Guard only has two polar icebreakers in operation.  These vessels break channels through the ice to maintain shipping lanes, perform search and rescue and law enforcement operations, and act as platforms for scientific research.  The Coast Guard’s oldest icebreaker and only one capable of heavy icebreaking, the POLAR STAR, was commissioned in 1976 and is operating well past its intended service life. If this vessel were to break down, it would be a single point of failure in the United States’ ability to protect its sovereign interests throughout the Arctic.  According to a 2011 Coast Guard assessment, the agency will need a minimum of six icebreakers to fulfill its statutory missions in the polar regions.  In an effort to recapitalize its aging icebreaker fleet, the Coast Guard plans to award a contract to a U.S. shipbuilder in 2019 with anticipated delivery of the first vessel by December 2022. Other Arctic nations, including Canada, Sweden, Finland and Demark have limited icebreaking capability as well. Russia currently owns and operates a fleet of more than 40 icebreakers. Ensuring that the increasing economic activity in the Arctic region is sustainable can only be achieved if the Arctic nations become fully engaged as soon as possible. It is imperative that this infrastructure is developed responsibly and sustainably with regard for the Arctic land and people—whether it is through low-effect shipping, sustainable shipping lanes, or science-based marine management.  Throughout this economic development, engaging and involving the native Arctic peoples will be vital to integrate Arctic communities into the global economy during this time of rapid change. Environmental Challenges The way that the Arctic nations respond to the changing climate and its respective perils and possibilities will shape the world’s response to climate change and the future of international cooperation.  Science and technology in the Arctic present opportunities for this collaboration. The Arctic is an emerging hotbed for scientific research.  Much is still to be learned regarding ice sheets, under-ice conditions, glacial dynamics, polar ecosystems, and biodiversity.  In the face of rapid ecological changes, it is vital for the international science community to come together to gather baseline information and develop the infrastructure to monitor the ecological changes. Based on temperature changes and shifts in food regimes, species are moving around the Arctic, shifting from territorial waters into the newly accessible Arctic high seas.  While commercial fleets have yet to coalesce in the high-seas Arctic, the international community has the unique opportunity to develop governance frameworks and complete baseline studies in anticipation of the new fishery.  In 2015, five Arctic nations—the United States, Canada, Russia, Denmark, and Norway—agreed to halt high seas fishing in the Arctic until research gaps on the condition of the emerging fisheries were better understood.  Oil spill prevention and response as well as search and rescue are areas where infrastructure is minimal in the Arctic. Emergency response efforts are hindered by an absence of basic logistical support and infrastructure. Furthermore, while private companies have invested in infrastructure related to oil and gas exploration and extraction, this is not sufficient to fulfill infrastructure needs and additional investment will be required.

  • Beyond Pipelines: Breaking Russia’s Grip on Post-Soviet Energy Security

    By Paul Massaro, Policy Advisor, and Andras Olah, Intern In 2007, the Helsinki Commission held a hearing titled “Pipeline Politics: Achieving Energy Security in the OSCE Region,” which focused on energy security in Post-Soviet Eastern Europe. The hearing took place in the wake of the first major Ukrainian-Russian gas dispute in 2006 that demonstrated not only the Kremlin’s willingness to use its energy resources as a weapon to meddle in its immediate neighbors’ domestic affairs, but also the extreme dependency of much of  Europe on Russia’s energy supplies. At the time, experts and policymakers focused primarily on the enhancement of security of supply through the construction of new energy infrastructure, including pipelines, which would allow the diversification of energy imports of countries in the OSCE region. Ten years later, the energy landscape of the world fundamentally has changed. As Peter Doran, the Executive Vice President of the Center for European Policy Analysis (CEPA), stressed at a July 2017 Helsinki Commission briefing titled “Energy (In)security in Russia’s Periphery,” new energy infrastructure been built and the regulatory environment of the EU’s energy sector has significantly improved. At the same time, the shale gas revolution in the United States and the simultaneous development of a global liquid natural gas (LNG) market offers European gas consumers more alternative options to Russian gas imports than ever before. Most countries in Central and Eastern Europe have improved their energy security by the implementation of crucial reforms in their energy sectors. For example, in Ukraine, where for a long time “energy oligarchs” profiting from dodgy gas deals with Gazprom torpedoed any meaningful reform initiatives, a recent landmark decision has eliminated energy subsidies that have been a lucrative source of corruption for decades. However, Moscow has resisted surrendering its monopolistic market position and is fighting back through politically motivated energy projects designed to exploit the fault lines between European countries’ differing energy policies. The most important Kremlin-sponsored projects to date have been the planned Nord Stream 2 and TurkStream pipelines, which will carry gas to EU countries by circumventing Russia’s immediate post-Soviet neighbors. According to Doran, the Kremlin aims to end the role that neighbors like Ukraine, and to a lesser extent Moldova, currently play in the transit of gas to the EU through the Brotherhood and the Trans-Balkan pipelines. The success of Nord Stream 2 potentially could result in the loss of billions of dollars in transit revenues for Ukraine and Moldova, as well as diminishing their geopolitical importance for Europe, while subsequently enabling Russia to reassert its old influence over them by exploiting their diminished energy security. As a result of massive infrastructure projects promoted by the EU to develop reverse flow capacities on existing pipelines and create new interconnections, Ukraine is now capable of purchasing gas from a Western direction and, for the first time, since November 2015 has ceased buying gas contractually from Russia altogether. New pipeline infrastructure projects, namely the planned expansion of the Iaşi-Ungheni pipeline, as Lyndon Allin, Associate at Baker Mackenzie, pointed out at the same briefing, might enable Moldova in the medium-run as well to reduce its dependence on Russian gas that currently constitutes almost a 100% of its total gas consumption. Nevertheless, the effectiveness and profitability of these regional gas transit systems could be severely endangered once the transit of gas is diverted to other pipelines, potentially hampering the prospects of further gas infrastructure modernization, which is necessary for both countries to ensure their energy security. Moreover, as both ‘Stream projects’ would circumvent the region, Russian gas could become the only one that can be bought from the east as well as the west direction, strengthening Gazprom’s monopolistic market position in the region.  While political leaders on both sides of the Atlantic have been pushing recently for the introduction of U.S. LNG to the region to serve as a new ‘external solution’ to the above mentioned challenges, as Edward Chow, Senior Fellow at the Center for Strategic and International Studies (CSIS), noted at the briefing, the main challenge for post-Soviet Eastern European countries remains an internal one. While the level of energy infrastructure might already be close to sufficient, the biggest problem for post-Soviet countries remains the underdeveloped nature of their energy sectors that lack harmonized and stable regulations, consistently-applied property rights, and transparency. Additionally, as Dr. Mamuka Tsereteli, Senior Fellow of the Central Asia – Caucasus Institute pointed out, energy security could not be achieved without high-levels of cross-border market integration, even if physical infrastructures are in place. The underdeveloped nature of post-Soviet Eastern European countries’ energy sectors has been having a severe impact on the energy security of those states, in particular of Ukraine, which could be easily self-sufficient—even without the import of U.S. LNG—in natural gas if private investment was not being discouraged by the opaque, uncompetitive, and corrupt nature of its energy sector. Once the right regulatory environment is established, Ukraine, for instance, could possess an immense gas transmission and storage infrastructure that, if properly upgraded, as well as connected to the energy networks of Central European countries, could lead to the establishment of a highly liquid East Central European gas trading hub with a spot-based gas trade. This could create increased energy security in the entire region by improving both the level of competition and the diversification of supplies. While the West could offer the countries of post-Soviet Eastern Europe, Ukraine and Moldova in particular, alternative energy sources (e.g. U.S. LNG), these should and could not serve as a substitute for structural reforms and capacity-building, which are ultimately necessary to achieve true energy security in the region.

  • Energy (In)Security in Russia’s Periphery

    On July 13, 2017, the U.S. Helsinki Commission held a briefing on “Energy (In)security in Russia’s Periphery.” Energy security is an important topic that belongs to the OSCE’s Second Dimension. This briefing addressed energy security challenges in Eastern Europe and the Caucasus, in particular in Ukraine, Moldova and Georgia. Panelists included Peter Doran, Executive Vice President and Interim Director at the Center for European Policy Analysis (CEPA); Edward Chow, Senior Fellow at the Energy and National Security Program of the Center for Strategic and International Studies (CSIS); Andrian Prokip, Senior Associate at the Kennan Institute of the Woodrow Wilson Center and Energy Expert at the Institute for Social and Economic Research; Lyndon Allin, Associate at Baker McKenzie; and Dr. Mamuka Tsereteli, Senior Fellow at the Central Asia-Caucasus Institute. The panelists provided a background on energy security both generally and in the regional context of the post-Soviet space, as well as in the specific case studies of Ukraine, Moldova and Georgia. Mr. Doran stated that the energy security situation in Europe, and also in Russia’s immediate neighborhood, has fundamentally changed as a result of the end of energy scarcity in the world and the construction of new energy infrastructure in Central and Eastern Europe in a positive way. However, the bad news is that Russia is not willing to accept this game-changing market shift and is fighting back. For instance, the panelists agreed on the key role that Azerbaijan could play for the supply of energy not only in the post-Soviet space, but also in other European countries. They noted, however, in order for world-class projects, like the ones operating or being planned in Azerbaijan, to become a reality, the achievement of market integration is critical. Unfortunately, market integration in Southeastern Europe is exactly what Russia has been trying to prevent with the tool of energy corruption, which it uses to keep its neighboring countries dependent on it for energy supplies, and to obtain kompromat on various political leaders in the region. Mr. Doran specifically cited the case of the Nord Stream 2 pipeline project, which he argued is a political and not a commercial project for Russia to gain more influence over European, and in particular Ukrainian, energy security. When it comes to ways of approaching energy security, panelists agreed that it must be achieved not by top-down but rather with bottom-up solutions, citing the specific example of Ukraine, which could easily become self-sufficient if it implemented crucial reforms that hinder much-needed private investment in its energy sector. In particular, Mr. Chow observed that, while external challenges must be confronted and overcome, the implementation of crucial structural reforms in the energy sectors of post-Soviet countries is critical to meet the challenge that Russia poses. For example, he regards corruption in the energy sector in Ukraine as the key reason for the nation’s energy insecurity. The panelists agreed that U.S. political leaders should be careful about making promises to politicians in the region, for example the oft-cited promise that U.S. LNG exports will be able to substitute for Russian gas and solve the energy security problems of the region. Instead, as the panelists pointed out, the emphasis should be put on supporting the energy market development of countries in the post-Soviet space. Mr. Prokip stressed that the recently proposed reforms in Ukraine must go forward. In particular, progress must be made in implementation, which he argued could only happen if the West is willing to exert more pressure on the Ukrainian authorities, while continuing to provide advice and assistance. In both Chow’s and Prokip’s view, U.S. energy exports cannot serve as a substitute for structural economic reforms in Ukraine. Following a similar line of argument, Mr. Allin pointed out that, in the case of Moldova, it is the Moldovans who need to make more effort to solve their own problems, rather than looking only to foreign partners for external solutions. Finally, Dr. Tsereteli reminded the audience that structural reforms and the openness to trade and investment that accompanies them can lead to post-Soviet countries’ integration in the global economic system, as was the case in Georgia, which managed to improve its energy security significantly this way.

  • Helsinki Commission Briefing to Examine Energy Security in Russia’s Periphery

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following briefing: ENERGY (IN)SECURITY IN RUSSIA’S PERIPHERY July 13, 2017 3:30 PM – 5:00 PM Dirksen Senate Office Building Room G11 Under Vladimir Putin, Russia has used its neighbors’ dependence on its energy supplies as a source of geopolitical leverage and sought to keep their energy sectors underdeveloped and corrupt. Ukraine has recently managed to implement crucial reforms in its energy sector, but challenges remain. Meanwhile, initiatives for similar reforms in Moldova have stalled, while Georgia has successfully reformed its energy sector and developed new infrastructure. Why are these outcomes so different and what more can be done to achieve energy security in post-Soviet Eastern Europe? This briefing will provide a general overview of energy security in Ukraine, Moldova, and Georgia, and examine challenges and opportunities in the energy sectors of these states. Briefers will discuss the role that corruption plays in preventing the implementation of effective reforms as well as strategies to curb Russian influence. The following experts are scheduled to participate: Peter Doran, Executive Vice President and Interim Director, Center for European Policy Analysis (CEPA) Edward Chow, Senior Fellow, Energy and National Security Program, Center for Strategic and International Studies (CSIS) Andrian Prokip, Senior Associate, Kennan Institute; Energy Expert, Institute for Social and Economic Research Lyndon Allin, Associate, Baker McKenzie Mamuka Tsereteli, Senior Fellow, Central Asia-Caucasus Institute  

  • Earth Day 2017: Eyes on the Arctic

    By Paul Massaro, policy advisor and Jordan Warlick, staff associate On the first Earth Day on April 22, 1970, 20 million Americans volunteered and demonstrated across the country to celebrate the importance of the Earth and environment for the very first time. Founded by Democratic Senator Gaylord Nelson and co-founded by Republican Senator Pete McCloskey, and supported by Members of Congress on both sides of the aisle, Earth Day demonstrates a bipartisan commitment to protection of the environment. By the end of that year, the U.S. Environmental Protection Agency was founded and three key pieces of legislation were passed by Congress: the Clean Air Act, Clean Water Act, and Endangered Species Act. Today, Earth Day is observed internationally and is considered the largest secular observance in the world, celebrated by over a billion people every year. Since its inception, the OSCE has recognized environmental issues as fundamental to European peace and security. The 1975 Helsinki Final Act reads, “efforts to develop co-operation in the fields of trade, industry, science and technology, the environment and other areas of economic activity contribute to the reinforcement of peace and security in Europe, and in the world as a whole.” Economic and environmental issues make up the second of three core baskets of the Helsinki Final Act, also known as the OSCE’s second dimension: the Economic and Environmental Dimension. In 1997, OSCE participating States established an Office of the Coordinator of OSCE Economic and Environmental Activities (OCEEA), dedicated to promoting international cooperation on these issues. The OCEEA, led by Dr. Halil Yurdakul Yigitgüden since February 2013, identifies OSCE environmental goals and priorities; organizes the meetings of the Economic and Environmental Forum; and supports field missions on environmental initiatives in areas such as water management, waste management, and sustainable energy. Although there are many areas of environmental concern that are often overlooked, the Helsinki Commission has recently spotlighted one issue in particular: the Arctic. In November 2016, the Helsinki Commission held a congressional briefing on nuclear pollution in the Arctic. The total catalogue of nuclear waste in the Arctic is staggering, and while most of the waste originated from Soviet-era Russian dumping, the United States and the United Kingdom are also responsible for some of the legacy waste. The panelists at the briefing, including expert Nils Bøhmer of the Bellona Foundation, Julia Gourley of the State Department, and Jon Rahbek-Clemmensen of the Center for Strategic and International Studies, considered approaches to handling nuclear waste in the Arctic and working with international partners on this issue. Nuclear pollution is only one of many concerns facing the Arctic region. According to the National Oceanic and Atmospheric Administration, over the last 20 years atmospheric temperatures have increased at a rate at least three times the global average, and as of 2011 sea ice thickness was 42 percent below what it was in 1979. If trends continue, summers may produce ice-free waters in the Arctic Ocean by the late 2030s. The melting of Arctic ice will likely have an impact on sea levels and ocean currents, and produce other environmental changes. Warming waters may also open up opportunities for new shipping routes and other development, which will transform the region’s geostrategic environment.

  • The Helsinki Process: A Four Decade Overview

    In August 1975, the heads of state or government of 35 countries – the Soviet Union and all of Europe except Albania, plus the United States and Canada – held a historic summit in Helsinki, Finland, where they signed the Final Act of the Conference on Security and Cooperation in Europe. This document is known as the Helsinki Final Act or the Helsinki Accords. The Conference, known as the CSCE, continued with follow-up meetings and is today institutionalized as the Organization for Security and Cooperation in Europe, or OSCE, based in Vienna, Austria. Learn more about the signature of the Helsinki Final Act; the role that the Conference on Security and Cooperation in Europe played during the Cold War; how the Helsinki Process successfully adapted to the post-Cold War environment of the 1990s; and how today's OSCE can and does contribute to regional security, now and in the future.

  • Nuclear Pollution in the Arctic: the Next Chernobyl?

    For decades, certain nations have been dumping nuclear waste and radioactive material in the Arctic. The extent of this contaminated waste has only come to light in recent years, and some experts fear there could be severe consequences if the waste is not swiftly handled and removed. This briefing sought to explore the magnitude of the problem and present recommendations for what the U.S. and the international community can do moving forward. The briefing participants offered diverse subject-area expertise, coming from backgrounds of Arctic environment, U.S. policy, and broader geopolitics. Nils Bøhmer, a Norwegian nuclear physicist, started the briefing off with an educated overview of past and current Russian nuclear activity in the Arctic. Next, Julia Gourley brought attention to some Arctic Council programs addressing environmental and health issues in the Arctic. Finally, Jon Rahbek-Clemmensen discussed nuclear-waste management, the current state of Arctic geopolitics, and offered models for nuclear-waste governance.  The discussion was productive and all of the participants encouraged further U.S. engagement on this issue.

  • Helsinki Commission to Examine Threat Posed by Nuclear Pollution in the Arctic

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following briefing: “Nuclear Pollution in the Arctic: the Next Chernobyl?” Tuesday, November 15, 2016 3:30 PM Rayburn House Office Building Room 2325 For decades, certain nations have used the Arctic as a dumping ground for unwanted nuclear waste. Experts estimate that nuclear contamination in the Arctic includes tens of thousands of containers of nuclear waste, in addition to dozens of radioactive ships, reactors, pieces of machinery, and submarines. If this waste is not expeditiously removed from the Arctic, what could be the consequences for human health, commercial interests, and wildlife in the region and beyond? This briefing will examine the policy of the United States, the Russian Federation, and other Arctic Council nations toward the Arctic. Experts will present a general overview of U.S. and international policy in the Arctic, the broader geopolitics of the region, and the imminent threat posed by nuclear pollution. The following experts are scheduled to participate: Nils Bøhmer, Managing Director, Bellona Foundation Julia Gourley, U.S. Senior Arctic Official, Department of State Jon Rahbek-Clemmensen, Visiting Fellow, Europe Program, Center for Strategic and International Studies

  • Serbian Minister of Foreign Affairs to Testify at Helsinki Commission Hearing

    WASHINGTON—The Commission on Security and Cooperation in Europe, also known as the Helsinki Commission, today announced the following hearing: “Serbia’s Leadership of the OSCE” Wednesday, February 25, 2015 2:30PM Rayburn House Office Building Room 2200 Serbia’s 2015 Chairmanship-in-Office of the 57-nation Organization for Security and Cooperation in Europe (OSCE) comes at a pivotal point in European security. The OSCE, a regional security organization based known for its work in promoting democracy, human rights, and the rule of law, operates on the front lines of Russia-Ukraine conflict and seeks to counter backsliding on human rights in other countries of the OSCE region.   Serbia’s First Deputy Prime Minister and Minister of Foreign Affairs, H.E. Ivica Dačić, will testify before the Helsinki Commission in his capacity as Chairman-in-Office of the OSCE. He takes the helm to conclude the implementation of a joint leadership plan developed with Switzerland, which chaired the OSCE in 2014. Minister Dačić is expected to discuss the Serbian Chairmanship-in-Office’s priorities, including resolution of the conflict in and around Ukraine; reconciliation and cooperation in the Western Balkans; reforming security sector governance; combating transnational threats, including foreign terrorist fighters, terrorism, and cyber-security; safeguarding journalists; fostering freedom of expression, assembly, and association; combating organized crime and its linkages to human trafficking; combating corruption; and improving water governance. He will also provide insights regarding the ongoing work of the OSCE.

  • Cardin, Smith Advance Security and Human Rights during Annual Meeting of European Parliamentarians

    WASHINGTON - A bipartisan 8-member Congressional delegation led by Senator Ben Cardin (D-MD), Chairman of the Commission on Security in Europe (U.S. Helsinki Commission), visited Georgia, Azerbaijan and Moldova. In Baku, Azerbaijan, Representative Chris Smith (NJ-04), Co-Chairman of the Commission, headed the U.S. delegation to the Organization for Security and Cooperation in Europe’s Parliamentary Assembly (OSCE PA) from June 28-July 2 that successfully advanced priority security and human rights initiatives. Key among the U.S. initiatives was a resolution introduced by Chairman Ben Cardin condemning Russia’s violation of international commitments by annexing Crimea and directly supporting separatist conflict in Ukraine. Upon passage of the resolution by a 3 to 1 margin, Cardin stated: “Russia is a member of this organization, but is violating its core principles. We must speak up in the strongest possible way and hold Russia accountable for its destabilizing actions and that is what we did here.” Co-Chairman Smith received overwhelming support for his resolution on efforts to combat child sex trafficking. As the Assembly’s Special Representative on Human Trafficking, Smith’s initiative pressed for the formation of a notification system among countries regarding the travel of persons convicted of sex crimes against children, as well as increased cooperation between law enforcement agencies and with the travel industry to prevent child sex tourism. “This resolution provides a tool to mitigate the horrific abuse of children by sexual tourism,” said Smith. “These predators thrive on secrecy, and so the goal is advance notification of sex offender travel so that children can be protected.” In addition to Chairman Cardin and Co-Chairman Smith, the delegation included Commission Ranking Member Senator Roger Wicker (R-MS), Senator Tom Harkin (D-IA), Commissioner Representative Robert Aderholt(R-AL), Commissioner Representative Phil Gingrey (R-GA), Representative David Schweikert (R-AZ) and Representative Adam Schiff (D-CA). The U.S. delegation fielded two of the 18 resolutions considered at the annual session, as well as a total of 19 amendments to several of these resolutions. In an initiative related to Chairman Cardin’s Ukraine resolution, Senator Wicker introduced language adopted by the Assembly recognizing the importance of the OSCE’s military observation missions, including the inspections in Ukraine.  Senator Wicker also participated in a dialogue with fellow parliamentarians on OSCE engagement with partner country Afghanistan. Senator Tom Harkin successfully offered amendments calling for access and equal opportunity for persons with disabilities, including calling for the ratification and implementation of the Convention on the Rights of Persons with Disabilities by all OSCE participating States. Commissioner Representative Robert Aderholt achieved passage of language supporting the integration of Western Balkan countries into the EU and NATO, and, in a separate initiative, highlighted the plight of “disappeared” political prisoners in Turkmenistan and called on that government to finally come clean on the fate of these individuals, one of whom was a former OSCE ambassador. An initiative by Rep. David Schweikert encouraged increased outreach by the OSCE to Mediterranean Partner countries, while Rep. Phil Gingrey brokered an agreement calling for concrete steps to promote clean and affordable energy. Finally, Rep. Smith and Senator Cardin joined an initiative with the Canadian delegation to respond more vigorously to acts of anti-Semitism throughout the participating States. On July 2 the meeting concluded with the adoption of the Baku Declaration, containing broad policy recommendations for the OSCE and its 57 participating States in the fields of political affairs and military security, trade, the environment and human rights. While in Azerbaijan, the delegation also held bilateral meetings with the Government of Azerbaijan, including meeting with President Ilham Aliyev as well as representatives of civil society fighting for media freedom, rule of law and disability rights in Azerbaijan. Bilateral meetings in Georgia and Moldova In addition to attending the OSCE PA’s Annual Session in Azerbaijan, Chairman Cardin led the delegation to stops in Tbilisi, Georgia, and Chisinau, Moldova, for bilateral meetings to discuss expanded ties with the United States as well as regional security in the wake of the crisis in Ukraine. In Georgia the delegation met with the President, Prime Minister, and the leadership of the United National Movement opposition party offering U.S. support and encouraging further democratic reforms, particularly in building a robust and independent judiciary free from corruption and untainted by politically-motivated prosecutions. In Moldova, the delegation met with the Prime Minister and key political leaders across the spectrum on the day the national parliament ratified an historic agreement with the European Union. The delegation also held consultations with the leadership of the OSCE Mission to Moldova, representatives of civil society, and the U.S. Embassy.

  • Importance of Good Governance to Comprehensive Security

    Remarks to the 2014 OSCE Japan Conference on Sharing Experiences and Lessons Learned between the OSCE and Asian Partners for Cooperation in Order to Create a Safer, More Interconnected and Fairer World in the Face of Emerging Challenges Thank you, Mr. Ambassador, for your kind introduction. It’s a pleasure to be here today. I’d also like to thank our Japanese hosts for their very gracious arrangements for this important conference. I am here on behalf of U.S. Senator Ben Cardin, the Chairman of the Commission on Security and Cooperation in Europe, also known as the U.S. Helsinki Commission. The Helsinki Commission is unique in that the U.S. is the only OSCE participating State to create a distinct governmental agency to monitor member state compliance with OSCE commitments. One of the key priorities for our Commission is promoting good governance and combatting corruption, and we were pleased to see the tremendous progress achieved in this area in 2012 with the adoption of the Declaration on Strengthening Good Governance and Combatting Corruption, Money-Laundering and the Financing of Terrorism at the Dublin Ministerial. The Good Governance Declaration is comprehensive, laying out a strategy for the OSCE to combat corruption, strengthen civil society development and enforce accountability measures in the public and private sectors.  The declaration has given some new tools to the Economic and Environmental Coordinator’s office, which plays a critical role in strengthening stability and security in the OSCE region. And last year, the OSCE worked to promote sustainable energy solutions, advocate transparency and accountability, and to build capacity at all levels of society – government, private sector, and its citizens.  These achievements represent a foundation for further enhancing the 2nd Dimension. The U.S. and the EU have recently enacted laws that address the problem of transparency and accountability in the resource sector. In the United States, these laws were authored by the Chairman of the U.S. Helsinki Commission, Senator Ben Cardin. The laws require companies to publicly report payments they make to governments for oil, gas and mining extraction. The concept is that by injecting transparency into a traditionally opaque business environment, the ability of citizens to better understand the money flows allows them to then hold their governments accountable. The laws are meant to innovate the way business is done in this extremely important sector by breaking the cycle of instability and poverty in countries suffering from what is often called the “resource curse”. This innovation can help ensure that energy supplies are not disrupted, it gives citizens a tool to fight corruption, and it levels the playing field for companies. Now that the U.S. and the European Union are implementing these transparency rules, other markets with large resource extraction companies such as Australia and Canada are exploring similar requirements. And we expect that as these rules come online we will see other stock exchanges around the world follow suit. Corruption and lack of transparency in the extractive industries can fuel instability and even conflict, so it’s not hard to see why this type of transparency is catching on. The news is full of headlines on instability created by resource competition or corruption. And resource rich countries are consistently rated as some of the most difficult places to do business. In almost every case you can trace the root cause to the intractable corruption in that country. These transparency laws are the game changers that will help tilt the balance of power away from corrupt leaders. Transparency and accountability are going to make the job of extractive companies easier. They will work on a level playing field, they will work with more stable governments, and they will operate in more stable communities. And the OSCE has a role to play here as well. With the acknowledgment of the importance of combatting corruption in the Good Governance Declaration, the OSCE’s Economic and Environmental Dimension can serve as a valuable platform for increasing stability and security on energy related issues and, in particular, highlighting the link between security, energy, and the environment. As we look toward the Basel Ministerial and the Helsinki+40 process, we must build upon this work and examine how the 2nd Dimension can be further strengthened to advance solutions that build good governance. One of the ways that we can do this is to more actively engage civil society in the 2nd Dimension. We need to welcome multi-stakeholder groups, business groups and civil society leaders to the Economic and Environmental Forum and the Economic and Environmental Implementation meeting in order to generate greater awareness of good governance initiatives, develop new projects, and assess the effectiveness of participating States in implementing these commitments.    Let me close with a comment on Ukraine. I was there two weeks ago to observe the election. Despite the daily reports of violence, what we saw in the conduct of the election makes me hopeful that the newly elected government will be able to move the country forward. But what is painfully clear is that the corruption surrounding Ukraine’s energy sector was a key factor in fueling the protests that eventually led to the downfall of the government. Ukraine is not a big oil and gas producer itself, but it plays a major role as a transit country between Russia and Western Europe. Ukraine has started work on its candidacy for EITI but still has a long way to go so we are encouraging the new government to place a priority on getting that in place. The broader lesson from Ukraine is that secret deals lead to corruption. Corruption leads to economic stagnation.  Economic stagnation leads to political instability.  Political instability leads to violence and human rights abuses, and even opportunistic violations of sovereignty and territorial integrity. This is why we need to innovate the way we do business. This is why we need to focus on transparency and good governance. And this is why we need to empower civil society and media to hold their governments accountable. These are all areas where the OSCE has expertise and where the Asian Partners can provide assistance and experience. Thank you.

  • U.S. Helsinki Commission to Hold Hearing on Azerbaijan

    WASHINGTON - Today the Commission on Security and Cooperation in Europe (U.S. Helsinki Commission) announced the following hearing: The Security, Economic and Human Rights Dimensions of US-Azerbaijan Relations Wednesday, June 11, 2014 10:00 am Russell Senate Office Building Room 432 The Republic of Azerbaijan has been an ally of the United States since its independence in 1991. It is a supplier of energy to Europe and has played an important role in assisting the U.S. and the International Security Assistance Force in Afghanistan through the contribution of troops and as a conduit for the Northern Distribution Network. Azerbaijan is a participating State in the Organization for Security and Cooperation in Europe (OSCE) and in May it assumed the rotating chairmanship of the Council of Europe (COE). Despite membership in both of Europe’s leading human rights institutions, Azerbaijan has been consistently criticized for its undemocratic elections and its use of the judicial system to punish political opponents. As the U.S. Helsinki Commission prepares to attend the OSCE Parliamentary Assembly Annual Session in Baku at the end of June, this hearing will examine the U.S.-Azerbaijan relationship and the impact of regional and domestic issues in Azerbaijan on that relationship. The following witnesses are scheduled to testify: Tom Melia, Deputy Assistant Secretary, Bureau of Democracy, Human Rights and Labor, Department of State Eric Rubin, Deputy Assistant Secretary, Bureau of European and Eurasian Affairs, Department of State Miriam Lanskoy, Director for Russia and Eurasia, National Endowment for Democracy Brenda Shaffer, Visiting Researcher, Center for Eurasian, Russian and East European Studies, Georgetown University

  • Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. 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, however, 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 certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work. We all know that trade and investment are critical drivers of economic growth. Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years. As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. 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, as 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.” The real world costs of corruption and weak institutions should not be underestimated. 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. In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known. And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption. That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. 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. The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly. We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets. At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets. Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will. Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad. And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face. Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed 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. In addition to our work through the OECD, the United States has been working diligently to persuade 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. The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20. In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law. This principle is also embodied in international conventions. Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society. Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption. The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship. 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. I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA 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 multistakeholder 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 multistakeholder 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 andwithin 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 want to close by suggesting some activities to take the theme of good governance and transparency forward. In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether 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 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 potentially 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, Mr. Moderator.  

  • Commissioner Camuñez's Remarks on Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. 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, however, 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 certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work.  We all know that trade and investment are critical drivers of economic growth.  Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years.  As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. 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, as 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.”    The real world costs of corruption and weak institutions should not be underestimated.  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.   In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known.  And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption.  That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. 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.  The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly.  We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets.  At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets.   Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will.  Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad.  And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face.  Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed 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.   In addition to our work through the OECD, the United States has been working diligently to persuade 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.   The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20.  In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law.  This principle is also embodied in international conventions.  Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society.  Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption.  The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship.   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.  I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA 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 multistakeholder 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 multistakeholder 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 want to close by suggesting some activities to take the theme of good governance and transparency forward.  In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether 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 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 potentially 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, Mr. Moderator.

  • Commissioner Camuñez's Opening Statement at the Economic and Environmental Dimension Implementation Meeting

    Economic and Environmental Dimension Implementation Meeting Opening Remarks 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 Svilanović, 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 an Assistant Secretary of Commerce for Market Access and Compliance (MAC) within the International Trade Administration, and as a Commissioner to the U.S. Helsinki Commission. As a Commerce Department Assistant Secretary for Market Access and Compliance, I am 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 which focuses on transparency of markets and good governance, is closely aligned with the work we undertake in the International Trade Administration. 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. 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 of our public and private ventures. At the same time, in view of our 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 to remove all barriers that prevent women from full and equal participation in the economy. I would like to focus my comments this morning on the subject of good governance, however. 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. When we speak of good governance, we speak 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. It’s about 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. 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 anticorruption. We have taken our business ethics work and branched out into new regions including Asia and Latin America. Despite a clear understanding of its importance, 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. Over the next three days, 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 preceded the United States as implementers. 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. Tomorrow 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 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 he’ll 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. I am also pleased to have Kate Watters of Crude Accountability joining the U.S. delegation, who will provide some examples of how transparency is a critical component of enhancing security in the environmental sphere. 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. 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, The 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. We view these elements, along with sustainable development and protecting the environment, as the cornerstones of the Maastricht Strategy, and will be speaking about these over the next several days. Just a 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, Mr. Moderator.

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