Philippines Pushes for Positive Sustainability Agenda at WTO Public Forum

GENEVA 22 September 2023 – At the WTO Public Forum, recently held in Geneva from 12-15 September 2023, the Philippines made a strong push for advancing a positive sustainability agenda at the WTO. The Philippines, led by the participation of DENR Undersecretary Jonas R. Leones, Ambassador Manuel A.J. Teehankee, and Ms. Nanette Medved-Po, participated in four panels that examined such themes as the role that information technology can play in supporting sustainability, building a nature positive trade agenda for biodiversity conservation, finding innovative solutions to plastic pollution, and advancing the agenda of the Coalition of Trade Ministers on Climate.

WTO Public Forum (photo from Geneva WTO)

Speaking at a panel jointly organized by the World Wildlife Forum (WWF), WTO, UNCTAD and business stakeholders on the “Biodiversity Crisis: Can WTO Support a Nature Positive Future?”, Undersecretary Leones spoke of the Philippines leadership in advancing the adoption of Natural Capital Accounting (NCA) systems. Since the 1990s, the Philippines has been at the global forefront in developing a NCA system and last year launched its NCA Roadmap to improve development planning, investment programming and disaster preparedness. The NCA includes asset accounts for minerals, energy, water, land and soil, timber, and biological resources; flow accounts that capture the relationship between natural inputs and economic activity; and ecosystem accounts that cover critical biodiversity areas in the archipelago. Undersecretary Leones noted that this “data driven and science-based approach will ensure the credibility of market-based payments for services (PES) mechanisms that support conservation measures and accelerate ecosystem and habitat rehabilitation and restoration.”

He further called for building a nature positive trade agenda built on advancing NCA systems, eco- tourism services, climate financing and the protection and promotion of traditional knowledge. Undersecretary Secretary stressed that eco-tourism “has created virtuous cycles, where local communities are empowered to participate, protect and manage natural resources and local heritage while ensuring their own economic empowerment.” However, local communities in remote areas remain economically vulnerable and Undersecretary Leones stated that a key focus should be in empowering local communities in biodiverse regions and safeguarding traditional knowledge systems and practices through the protection of intellectual property and blending traditional knowledge with technology to develop value-added products, such as in the medical, agriculture, textile, packaging and creative industries.

Ambassador Teehankee, for his part, joined a panel organized by the U.S. Semiconductors Industry Association (SIA) on “Leveraging Global Semiconductor Trade for Sustainability: Powering Sustainability and Net Zero through Global Trade and the WTO.” Since the ITA Agreement was launched in 1996, IT products have become the third largest globally traded product group, from USD 550 million in 1996 to USD 2.5 trillion in 2021. Ambassador Teehankee noted that multilateral rules have provided legal certainty and policy predictability that companies value. He noted that post-pandemic, “our expectation is that value chains will remain globally integrated, will move away from excessive concentration and this will provide opportunities for economies like the Philippines to move up the value chain from assembly, packaging and testing to wafer fabrication, semiconductor design and front-end manufacturing. But one reality that is hard to ignore is that investments will continue to flow to economies that have adopted forward-leaning rules and commitments like those contained in the ITA.”

The panel, which also included executives from TSMC and Amazon Web Services, examined how ITA 1 and 2 covered products, as well as IT technologies in a potential new ITA-3 agreement, are supporting energy transitions. For his part, Ambassador Teehankee noted that renewable energy, energy efficient, and smart technologies are helping the Philippines adapt to climate change and spur a just energy transition. He highlighted that “renewable energy projects are expected to account for one-third of foreign investments this year, with significant growth opportunities for solar, offshore wind, and micro-grid infrastructure… we are also utilizing geospatial and drone technology for natural capital accounting and biodiversity conservation, hazard mapping for disasters and smart agriculture, including pilots for agrivoltaics.”

Ambassador Teehankee also joined an E3G Panel on the “The Coalition of Trade Ministers on Climate: Developing a Transformative and Inclusive Agenda” with Daniel Legarda, Ecuador’s Minister of Foreign Trade and Investments. The panelists stressed the transformative potential of the Coalition, which was launched in January 2023 at the World Economic Forum in Davos. Ambassador Teehankee noted the strong alignment of interests given that the Philippines is an open economy trying to pursue a just energy transition while being one of the most vulnerable countries to climate change and natural disasters, with projections showing that in a business-as- usual scenario, damage and losses from climate change are set to increase to 7.6% of GDP by 2030. He further stressed that “we are keen to maximize our participation in electric mobility and RE value chains, with our mineral reserves ranking fourth globally in copper, fifth in nickel, and sixth in cobalt. So, it’s clear that we are invested in the green economy and want to work with other like-minded countries in driving this change forward. I believe our focus should be on building trust and promoting a positive trade agenda.”

Ambassador Teehankee called for the Coalition to pursue practical solutions that will support the diffusion and accessibility of goods, services and technologies to support climate mitigation and adaptation, particularly for climate vulnerable countries. This could build on existing work in other fora like APEC or IPEF and would have a broader geographic spread of Coalition Members take voluntary liberalization including on tariffs, which could be based on the APEC List of Environmental Goods and Environment-related Services. He stated “we also should also focus on MSMEs and trade finance, which often lack the capital but are keen to drive progress in the sustainability space. And we need to examine how trade policy solutions can address developmental challenges, such as fuel efficient and sustainable cookstoves, mini-grids for small islands, and small household solar panels for communities in remote and disaster prone areas.”

At the Philippine-organized Public Forum panel on “Innovative Partnerships with the Private Sector to Tackle Plastics Pollution”, Undersecretary Leones was joined by leading innovators in the sustainable economy, including Nanette Medved-Po, Founder and Executive Chairperson of the Plastics Credit Exchange (www.pcxmarkets); David Cutler, Co-Founder and CEO of Fortuna Cools (www.fortunacools.com); and Pierre-Yves Paslier, Co-Founder and Co-CEO of Notpla (www.notpla.com). Undersecretary Leones provided sobering data on this challenge, with the “Philippines generating 61,000 metric tons of solid waste daily and it is estimated that 12-24% of which are plastic. Studies by our development partners estimate that we use more than 163 million plastic sachets, 48 million plastic sando shopping bags, and 45 million plastic thin-film bags daily. 33% of all these is disposed of in landfills and dumpsites and around 35% leaks into the oceans and the environment. In a 2019 World Bank study, it was reported that around 70% of the material value of plastics is lost to the Philippine economy each year, equivalent to a value loss of USD 790-890 million per year.” He stressed that the Philippines continues to pursue whole of government and whole of society approaches and remains strongly committed to forging an international legally binding agreement by 2024 to address the full lifecycle of plastic. The Philippines has stressed the importance of embedding the Polluter’s Pay Principle in the Treaty, particularly in adopting the Extended Producer Responsibility (EPR) scheme and the framing of National Action Plans (NAPs) of Member States.

To date, there are about 665 out of 4,000 obliged enterprises that have submitted their EPR programs for evaluation, which would include scaling up waste avoidance, reduction, recovery and repurposing, and supporting product innovation that will catalyze the circular economy. Undersecretary Leones noted that “our indigenous material endowments are offering viable prospects as environmentally sustainable plastic substitutes: including seaweed, coconut fiber, Manila hemp, pineapple fiber, and bagasse.”

There are two (2) modes of EPR Program implementation. The first mode – reduction of non- environment friendly packaging products – involves six mechanisms, particularly the use of reusable packaging products or packaging design; appropriate labelling of products and packaging materials; inclusion of recycled content or recycled materials in packaging materials; adoption of appropriate product refilling systems for retailers; having a viable reduction rates plan; and the implementation of IEC schemes. The second mode – recovery programs aimed at effectively preventing waste from leaking to the environment – involves waste recovery schemes; diversion; transportation; waste cleanup; investment in waste diversion or disposal facilities; and partnerships with all stakeholders.

Nanette Medved-Po founded PCX (PCX Markets & PCX Solutions) in the Philippines, which was first in the world to establish a Plastic Pollution Reduction Standard and create a fully traceable offset platform, discussed viable market-based solutions to solving plastics crisis. She noted that “the reason that we don’t see much glass, paper, or metal polluting our environment, is because the market has assigned a value to these materials, therefore communities have incentive to collect. Using the same principle, if value is assigned to plastic waste, this will incentivize the collection of previously undesirable and polluting materials. Once sufficient scale is realized in collection - in concert with governments introducing EPR with clear standards for design, use of recycled content, and post consumer responsibility - should spur the much needed investments in infrastructure and the ecosystems to support them.”

PCX has also introduced the concept of intergovernmental compliance blocks for regional collaboration and capacity sharing. This is premised on the fact that not all countries are equally placed to handle different waste streams. It would not necessitate that a country geolocates their entire value chain immediately while it is not yet economically viable. Compliance blocks offer the opportunity for countries to work together on a regional level and share responsibility, while offering economic benefits to countries which are able to process waste from their neighbors.

David Cutler talked about his company’s efforts in harnessing bio-based materials for outdoor gear and commercial packaging through his company, Fortuna Cools. Fortuna Cools, which operates from Cebu and works extensively with coconut farm cooperatives in the Philippines and has developed a consumer cooler ("Nutshell Coolers") for the US market and has introduced insulated packaging ("Fortuna Liners") for vegetable, fish, and dairy businesses in the Philippines. The coolers, which utilize agricultural waste known as coco-coir or coconut-fiber and recycled plastic, are sustainable insultation substitutes for polystyrene, otherwise known as styrofoam coolers, which are considered one of the most environmentally harmful to natural ecosystems.

Pierre Pierre Paslier, a London-based Innovation Design Engineer, co-founded Notpla, focused on eco-friendly packaging. Currently, Pierre is Notpla's Co-CEO, committed to solving the global plastic crisis with their seaweed-based packaging and coatings. Notpla secured Prince William’s £1,000,000 Earthshot Prize in 2022. Notpla produces packaging that is naturally compostable and does not require high temperature industrial composting facilities. Responding to a question on the high costs for natural plastic substitutes, Pierre noted that the current economic system is structured to benefit plastic based modes of packaging and production, which is largely attributable to the decades-long subsidization of the fossil fuels industry. Pierre called for strengthening EPR schemes, utilizing their revenues to fund natural polymers, banning single-use plastics, and improving standards and labelling to avoid consumer confusion and greenwashing.

To kick-start collaboration with international organizations, Ambassador Teehankee also hosted a working lunch with Undersecretary Leones, innovators, senior officials from the WTO Secretariat, Asian Development Bank, International Trade Centre, World Economic Forum, and established Geneva-based think tanks. During the lunch, guests were able to sample Notpla’s Ooho edible bubble.

The WTO Public Forum is the WTO’s largest yearly outreach event and includes the in-person participation of more than 2,000 representatives from civil society, academia, business, government, international organizations and the media. The 2023 edition will focus on the theme “It is Time for Action” with the following three sub-themes:

The role of the services sector in sustainable trade;
Inclusive policies for the advancement of green trade; and
Digitalization as a tool for the greening of supply chains.

Undersecretary Leones (2nd from right) and Mr. Marco Lambertini, Former Director General of World Wildlife Fund (WWF) and current WWF Special Envoy (far right) with other panelists (photo from Geneva WTO)