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Asean parliaments issue clarion call for ESG action
Cambodian Prime Minister Hun Sen’s Green Deal to fight climate change gains support
Peter Starr 24 Nov 2022

Southeast Asian parliaments have resolved to promote environmental, social and governance (ESG) approaches for both the public and private sectors while urging their governments to develop ESG performance indicators.

Members of the Asean Inter-Parliamentary Assembly (AIPA) adopted an ESG resolution on Wednesday, the fourth day of a five-day meeting in Phnom Penh – the first face-to-face gathering of Asean lawmakers since 2019.

The resolution was among a dozen finalized a day earlier during a meeting of AIPA’s economic committee chaired by Cheng Vun, chairman of the Cambodian National Assembly’s economic, finance, banking and audit committee.

Jointly sponsored by Cambodia and Vietnam, the resolution acknowledges the “increasingly important roles of national parliaments” in passing laws and adopting budgets for sustainable development and post-pandemic recovery.

Regional lawmakers also expressed support for an “Asean Green Deal” that Cambodian Prime Minister Hun Sen proposed during the Asean Summit in Phnom Penh earlier this month.

ESG performance indicators

The resolution urges Asean governments to address challenges together “by developing relevant ESG performance indicators and indexes that promote the safeguarding of environmental, labour and social protection” – notably those in line with the Green Deal.

It also asks the governments to “recommend priority principles encouraging businesses and producers to comply with ESG standards for sustainable and inclusive development”.

To review and assess progress, the lawmakers call on Asean governments to develop a regional action plan, roadmap or implementation framework for compliance.

In addition, the lawmakers call for a “regional approach that incentivizes the activities of the private sector and investment in areas that contribute to the promotion of the ESG practices in businesses and corporate transactions, including financial instruments such as sustainable loans or green bonds”.

Standards related to privacy, security and intellectual property, environmental protection and risk management should be included in commercial agreements with “wider application” in the future.

Corporate governance

At the same time, corporate governance should be strengthened – especially in the areas of human rights, information security and environmental protection – and domestic mechanisms, policies and laws should be in line with international agreements and commitments, the resolution says.

To embrace energy transition and circular economy, reduce carbon footprints and manage climate change adaptation towards low-carbon societies, the resolution urges the international community to deepen cooperation and partnerships with Asean to invest in clean and renewable energy while sharing expertise and resources, and making technology transfers.

Asean parliaments and governments are also encouraged to take “active and proactive roles” to boost the visibility and awareness of ESG approaches and policies.

These should act in unison to promote green growth, recoveries and tourism through green technologies and practices in corporate governance, environmental governance and sustainable management of scarce natural resources used in both industrial and non-industrial sectors.

Governments and the private sector are urged to strengthen access to sustainable and green finance and access to markets – and the “internationalization of goods and services produced under strict compliance with green growth and green recovery frameworks”.

The resolution also says that environmental policies should be line with the interests of micro, small and medium-sized enterprises that “promote sustainable use and effective governance of natural resources as well as legislation, regulation and taxation and improvement in institutional framework arrangements”.

Finally, the resolution calls for government measures such as publicity campaigns to “encourage applications of ESG criteria in corporate governance” in various sectors – especially smaller enterprises – and to combine such measures with e-commerce and digital media activities.

Green Deal for Asean

Prime Minister Hun Sen unveiled his Green Deal initiative to regional business leaders in Phnom Penh on November 10. Speaking at an Asean Business and Investment Summit on the eve of the annual Asean and related summits of government leaders – which ran from November 11 to 13 — he said the initiative was aimed at combating climate change and its impacts, natural disasters and environmental degradation.

“Cambodia has proposed the establishment of an Asean Green Deal to re-orient Asean toward a green future that is sustainable and economically competitive,” he said.

A statement released at the end of the Asean Summit said leaders “took note” of Cambodia’s initiative.

The AIPA general assembly in Phnom Penh this week has concluded an unprecedented two weeks of top-level political gatherings in Southeast Asia this month that also included a G20 summit in Bali and a meeting of leaders from the Asia-Pacific Economic Cooperation (APEC) forum in Bangkok.

Both the G20 and APEC summits produced almost identical declarations on the war in Europe. “Most members strongly condemned the war in Ukraine,” they said. They also acknowledged “other views and different assessments of the situation and sanctions”.

East Asia accommodates Russia

But the chairman’s statement of the East Asia Summit (EAS) in Phnom Penh on November 13 – immediately before the G20 Summit in Bali – elaborated on these other views. “Most EAS participating countries expressed their condemnation over the aggression against Ukraine,” the statement said, without mentioning Russia  (which the G20 and APEC declarations did).

“Some EAS participating countries also took note of the view that the root cause of the situation in Ukraine should also be addressed and the legitimate concerns [of] all countries must be taken into consideration,” it added.

This was not surprising. The East Asia Summit – grouping Asean with Australia, China, India, Japan, South Korea, New Zealand, Russia and the United States – has fewer countries deemed by Moscow as “unfriendly” towards Russia. Singapore is the only one of the 10 Asean members to have this status, the others from the region being Australia, Japan, South Korea, New Zealand and the United States.

Moreover, both China and India – along with Asean members Laos and Vietnam –  were among the 35 countries that abstained from a UN Security Council resolution condemning Russia for the conflict in Ukraine on March 2.

Russia’s presence among the overwhelmingly friendly nations of Southeast Asia in Phnom Penh this week was there for all to see at the annual AIPA-Russia dialogue on Wednesday (Russia is an official observer at AIPA general assemblies – as are Belarus and Ukraine).

The dialogue – chaired by Chhim Ma, another member of the Cambodian parliamentary economic committee –  heard a detailed explanation of the “root cause” of the conflict from Konstantin Kosachev, deputy speaker of the Russian Federation Council, the upper house of the country’s parliament.

Russia cements partnerships with Asean

The meeting was among the most attended of more than a dozen dialogue sessions with observers held on Wednesday afternoon. It was held in a friendly atmosphere, with some of the Southeast Asian delegates even offering a few words in Russian.

While many Cambodian, Lao and Vietnamese politicians and government officials have studied in the former Soviet Union or Russia, it was not only the Indochinese delegates who displayed their Russian language skills.

A member of Indonesia’s parliament did so too – as a Thai delegate did at a separate meeting on Wednesday morning with Valery Mitskevitch, deputy chairman of the House of Representatives of the National Assembly of Belarus (he explained that he used to be a tour guide before becoming a member of parliament).

The friendly afternoon exchanges with Kosachev was not surprising since Russia is the largest military supplier to several Asean countries such as Indonesia, Malaysia and Vietnam.

The Southeast Asian delegates to Wednesday’s dialogue expressed interest in deepening ties with Russia. The Vietnamese delegate, for example, appealed for Russian assistance to the poor and vulnerable, among the hardest hit by the Covid pandemic. Even the Singapore delegate spoke about strengthening ties with Russia.

The two-hour dialogue underscored an important point in that Southeast Asian politicians are ready to engage with their Russian counterparts. By contrast, American and European observers left the room when Kosachev addressed the assembly at Monday’s opening session (the Russians nevertheless remained in the room when the US delegate spoke ahead of being conferred AIPA observer status along with Azerbaijan and Nepal).

Cambodian National Assembly President Heng Samrin wrapped up this year’s AIPA general assembly on Thursday, handing the gavel to incoming chair Puan Maharani, the speaker of Indonesia’s House of Representatives – the daughter of former President Megawati Sukarnoputri (in turn, the daughter of Indonesia’s founding president Sukarno).

In his closing remarks, Heng Samrin said the AIPA general assembly was proof that “the principles of consultation and consensus-based decision making remain fundamental to Asea’s unity and centrality. We have also observed that the four principles of mutual respect, understanding, trust, and interest for peace and prosperity are vital to regional integration and community building.”

As during the Asean Summit earlier this month, Myanmar did not take part in this week’s AIPA assembly amid the political and humanitarian crisis in the country. Neither did Malaysia following a weekend general election that resulted in Anwar Ibrahim being named as the country’s next prime minister as the AIPA assembly was drawing to a close.

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