Session II Changkuk Lim

UNCITRAL United Nations Commission on International Trade Law

Scope and Challenges of Possible UNCITRAL Model Rules on PPP

Changkuk Lim Legal Expert UNCITRAL Regional Centre for Asia and the Pacific


UNCITRAL: the role NOT INVOLVED IN

• Setting trade rules applicable between States

• Private disputes between private parties

• Providing legal advice to private parties

INVOLVED IN

• Promoting the unification & harmonization of the law of international trade and assisting in domestic law reform (legislative work)

•  Strengthening uniform application & interpretation of the instruments adopted (technical assistance)

• Coordinating the work of other similar organizations (cooperation with UN and not UN bodies /organisations)

Brief overview of UNCITRAL


Trade law and the UN

The UN… will employ international machinery for the promotion of the economic and social advancement of all peoples (Preamble of the UN Charter, 1945) Develop further an open trading and financial system that is rule-based, predictable and non-discriminatory... [MDG 8 – Target 12, 2000]


Broad policy context

•  Trade law reform fosters cross-border trade and foreign investment

•  Cross-border trade and foreign investment are necessary for sustainable economic growth

•  Sustainable economic growth leads to social stability and to peaceful international relations

•  Trade law reform has a direct impact on fighting poverty and maintaining peace

•  Trade law reform contributes to strengthening the rule of law and to good governance


When and why was UNCITRAL established?


UNCITRAL Texts

•  Negotiated with universal participation and reflect balance of national, regional, economic, legal and other interests

•  Drafted with a view to ensure compatibility with the various legal traditions

•  Operate at different levels and involve different types of compromise or acceptance

•  Move from a hard law to soft law

Convention Model Law Legislative Guide


UNCITRAL: the role NOT INVOLVED IN

• Setting trade rules applicable between States

• Private disputes between private parties

• Providing legal advice to private parties

INVOLVED IN

• Promoting the unification & harmonization of the law of international trade and assisting in domestic law reform (legislative work)

•  Strengthening uniform application & interpretation of the instruments adopted (technical assistance)

• Coordinating the work of other similar organizations (cooperation with UN and not UN bodies /organisations)

Brief overview of UNCITRAL


Possible future work on PPPs Background: UNCITRAL and PPPs Work in supporting infrastructure development •  Huge potential for sustainable development •  Infrastructure gap •  Harmonization of international trade law

Session 2. PPP in Science & Technology

Other UN goals •  Rule of law •  Peace and security


Background: Is a legislative framework necessary?

Lack of clear and coherent model for national legislation


Without a good legislative framework

•  Rules regulating PPPs adopted on a project-by-project basis •  Each potential PPP project - Prior approvals for each stage - feasibility studies, procurement methods, terms of reference, conduct of process - Has to be negotiated from scratch


Possible future work on PPPs Background: Is a legislative framework

necessary? Some positive reasons •  Allows policy outcomes to be articulated,

achieved and monitored - eg meeting government needs, protecting the public interest, securing value for money, ensuring good governance

•  Can address obstacles to effective PPPs •  Can improve internal processes at national

level



Possible future work on PPPs Recent developments •  Emerging convergence of policy solutions

not reflected in existing PPPs laws

•  Multiplicity of sources


So we see •  Major variations in scope and policy •  Regular turnover in existing laws at the national level


Possible future work on PPPs UNCITRAL’s role Provide internationally-agreed template for

national law (= “Model Law”) •  Developed “from practice to policy” •  Worldwide participation in process •  Consensus-based approach to

development •  Universally applicable results •  Consistent with international obligations

(UNCAC, donor requirements)


MDBs

UNCITRAL

UNCAC EU Directives

WTO/GPA/FTAs


Possible future work on PPPs UNCITRAL’s process

•  Consultations and studies •  In writing, by teleconference, webinars •  In person – Vienna, regional •  With States, IGOs, NGOs, experts,

academics … •  Research into - Existing national PPPs legislation - Existing policy solutions - Mapping against PFIPs Instruments - New issues emerging - eg PPPs with small-scale operators



Possible future work on PPPs Scope of Model Law Model Law as legal framework •  Facilitative, not prescriptive •  Requires: - Supporting regulations - Supporting institutions •  Must fit in State’s legal, administrative

system and with local circumstances


Law = words on a page Implementation is key to effective system


Possible future work on PPPs Supporting a Model Law • Updating UNCITRAL Legislative Guide and

Provisions on Privately Financed Infrastructure Projects (PFIP) (2000, 2003)


Key safeguard: mandatory minimum requirements

Following Model Law on Public Procurement •  Guided toolbox approach to regulation •  Accommodate systems with different circumstances and maturity


Possible future work on PPPs Some key issues for legislation on PPPs (1) • Scope: which transactions?

- Demarcation between PP and PPP?

- Sector-specific issues: modular approach?

•  Risk allocation

•  Unsolicited proposals

•  Implication of modern financing methods

•  Protection of public interest

•  Long-term contracts



Possible future work on PPPs

Some key issues for legislation on PPPs (2)

• Flexibility vs. prescriptiveness

- Public and private sector interests appear to diverge

- More prescriptiveness - simpler contract negotiations, reduced transaction costs and risks, and better protection for the weaker party

- More flexibility – allows more tailored solution for specific project




For more information …

•  Existing texts: http://www.uncitral.org/uncitral/uncitral_texts/procurement_infrastructure.html

•  Possible future work on PPPs http://www.uncitral.org/uncitral/en/commission/

colloquia/public-private-partnerships-2014.html

http://www.uncitral.org/uncitral/en/commission/colloquia/public-private-partnerships-2013.html



THANK YOU

If you have any questions,

email me at

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Session II Changkuk Lim

Science

Transcript of Session II Changkuk Lim