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International Law and International Organizations
Reference:

Public-Private Partnerships for the UN Sustainable Development Goals achievement

Eremin Viktor

PhD in Law

Junior researcher, Graduate school of management, SPbU

199034, Russia, Saint Petersburg, nab. University, 7-9

eremin.cisp@gmail.com

DOI:

10.7256/2454-0633.2023.4.48487

EDN:

EVMKND

Received:

06-10-2023


Published:

21-11-2023


Abstract: The subject of the study is public relations emerging in the implementation of public-private partnership projects aimed at achieving the sustainable development goals developed by the UN. The object of the study is a set of financial and institutional conditions for the implementation of public-private partnership (PPP) projects based on PPP agreements with a special focus on the UNECE model law “PPP for the benefit of people” being developed. Thus, the proposed approach to PPP for the benefit of people as a separate type of PPP has been criticized. The author, through the prism of sustainable development goals, describes the possibility of improving the proposed international legal norms and rules developed for the implementation of PPP projects. The article also discusses the possibility of introducing the sustainable development agenda through PPP agreements (lex PPPs). When writing the article, the following methods were used: logical, historical, theoretical-prognostic, formal-legal, systemic-structural, comparative law and legal modeling. The methodological apparatus consisted of the following dialectical techniques and methods of scientific knowledge: analysis, abstraction, induction, deduction, hypothesis, analogy, synthesis, typology, classification, systematization and generalization. The main conclusions of the study are that the concept of sustainable development and sustainable development goals are becoming increasingly popular in the practice of implementing investment projects, including those based on PPP. Further improvement of domestic legislation on PPP should be in line with the implementation of best practices, focused not just on the financial component and benefit of the investor and the state, but also on the benefit for people (PPP people first) and the planet (PPP for planet). The main results of the study include the fact that aspects were identified that slow down the advancement of the sustainable development agenda in the field of public-private partnership (contradiction of terms, lack of incentives for implementation for investors), a definition was given to public-private partnership for sustainable development, and It was also revealed that lex PPPs can become an effective tool for achieving sustainable development goals through their implementation in PPP agreements.


Keywords:

PPP, sustainable development, Sustainable Development Goals, sustainable infrastructure, sustainable investment, PPP project, UNECE, PPP standards, SDGs-focused PPPs, UN

This article is automatically translated.

Introduction

Public-private partnership (PPP) – one of the most popular mechanisms for the creation, reconstruction and modernization of infrastructure in the world is at a new stage of transformation. At the present stage of PPP development, more and more countries, under the influence of globalization trends, are turning to the unification of legal norms to create favorable conditions for foreign investment. One of the basic drivers for the development of legal regulation, including in the field of project financing, is sustainable development, which today forms the agenda for the formation of a new level of infrastructure. Under the auspices of the United Nations Economic Commission for Europe (UNECE), a draft model law "PPP for the benefit of people" is under development and approval [13], which is not just aimed at improving this mechanism, but should transform it conceptually. This transformation is due not just to the urgent need to reform the project financing of infrastructure, but to the adaptation of the PPP mechanism for the implementation of the UN Sustainable Development Goals (UN SDGs). For practical actions, the UNECE has also developed a specialized system for ranking and evaluating PPP projects for achieving the SDGs – "UNECE PPP and Infrastructure Evaluation and Rating System (PIERS)" [19]. This article examines in detail the UNECE initiative on the implementation of PPP for the benefit of people, characterizes and defines public-private partnership for sustainable development goals, and also examines a new approach for transnational PPP projects - LEX PPPs, which should become a driver for the implementation of sustainable development goals in PPP contracts.

Sustainable Development Goals and PPPs

As noted in the literature, the Sustainable Development Goals "are a reflection of the dominant concept of sustainable development in the 21st century, have a transformative impact on all spheres of international and cross-border relations" [8]. The concept of sustainable development was formulated in 1987 in the report of the World Commission on Environment and Development, which defines sustainable development as development that meets the needs of the present, but which does not jeopardize the ability of future generations to meet their own needs [2]. The crystallization of the concept of sustainable development in the modern sense is reflected in the 17 Sustainable Development Goals formulated by the UN in 2015 [18]. For the purposes of this study, the most significant goal seems to be Goal 9. "Creating a stable infrastructure, promoting inclusive and sustainable industrialization and innovation" through which the need for humanity to create an infrastructure that would meet the criterion of sustainability is clearly traced. It is often pointed out that infrastructural growth is the key to the sustainable development of any state [15]. Currently, the UK and China are at the forefront of scientific understanding of infrastructure in relation to sustainable development [16]. There are also various branches of this concept: some authors call the concept of sustainable development a sustainable development strategy [5, 6], or offer their own "model of sustainable and safe development - Honest development", which is somehow aimed at infrastructure development [11].

Achieving the Sustainable Development Goals (SDGs) is possible through the involvement of all interest groups (politicians, business, civil society and the population), which is one of the key factors of peace, social tranquility and stable growth [5]. Improving communication between all stakeholders, as well as improving communication and involvement of citizens and businesses are becoming the main challenges for sustainable development, and require an integrated and intersectoral approach [12]. As noted in the Resolution of the UN General Assembly of 25.09.2015 A/RES/70/1 "Transforming our world: the UN Agenda for Sustainable Development for the period up to 2030" and confirmed by a number of scientific papers [7, 20] – the key means of achieving the SDGs is the mechanism of public-private partnership or, if more precisely, the mechanism of public-private partnership [9]. In this context, we can talk not only about sustainable development or sustainable infrastructure, but also about sustainable public procurement and sustainable public-private partnership [14]. Based on the analysis of publications on public-private partnership for the SDGs, Wang and Ma determine that PPP for the SDGs is contributing to the achievement of one of the three dimensions of sustainable development: social, environmental and economic [16]. It seems to us that these measurements should be considered not separately, but in aggregate. We propose to define public-private partnership for sustainable development (or sustainable PPP) as the implementation of an investment infrastructure project based on a PPP agreement that meets the triad of components of sustainable development: social, environmental and economic.

UNECE's work in the field to promote PPPs for the benefit of people

The UNECE has been actively working over the past few years through various working groups to understand and promote PPP as a mechanism to achieve the SDGs. For example, a Methodology for evaluating public-private Partnerships for the Benefit of People in order to Achieve the Sustainable Development Goals has been prepared, which is intended for use by governments, the private sector, civil society organizations, academia and international organizations that work together to create PPPs for the benefit of people in order to achieve the SDGs [3, 4According to S. V. Maslova, the evaluation of projects under this approach should be based on "criteria determined by the economic (Value for Money), social (Value for People) and environmental (Value for Planet) content of the SDGs" [8, 17].

In addition, it cannot be said that the UNECE sees the future use of PPPs to achieve the SDGs as cloudless and clear and notes that there is now some "pause" in the use of PPPs to achieve the SDGs, which is associated with a conditional bias in favor of achieving profit by a private investor rather than achieving a public good, and for the real implementation of PPPs to achieve SDGs need to implement PPP projects rationally and consistently, while really meeting the needs of the population [1].

A separate large layer of the UNECE's work in terms of PPP to achieve the SDGs is the development of a PPP Model Law for the benefit of People (Draft standard on People-first PPP/Concession Model law, hereinafter referred to as the Model Law) [13]. The latest available draft of the Model Law contains 41 articles that are aimed at regulating literally all the nuances related to PPP in general. Of course, it is not possible to characterize all the provisions within the framework of the article, therefore we will give only individual comments on the key provisions.

Thus, the preamble of the Model Law states that the purpose of the Law is to create a legal framework for PPPs in the interests of people and contracts ensuring their implementation in [the host country], including rules and procedures governing their selection, preparation, evaluation, procurement and implementation, contractual principles and institutional mechanisms applicable to them, and also promoting the orderly and coordinated implementation of PPPs. Paragraph 2 of Article 1 of the Model Law defines the scope of its application ("All PPPs. This law applies to all forms of PPP as defined in this law, including those that are called or described as projects; concessions; or user fees, those that are called or described as projects of the type of payment by the state or, other forms designated by other names or abbreviations, and those that involve the transfer of the risk of demand to the private partner, as well as those who do not. It also applies to all PPP projects implemented in [the host country] after the date of entry into force of this law, regardless of whether they are carried out at the national, federal, subnational, regional or municipal level (except in cases where the PPP rules specifically provide otherwise) [approx. my translation is VE]). The Model Law interprets PPP as a phenomenon quite broadly. This is rather a negative factor and does not create clarity for the implementation of this concept in various legal systems, including the Russian one. Various contractual forms of interaction between public and private parties adopted in Russia correspond to such a broad description: certain forms of public procurement, "offset" contracts, various forms of investment agreements.

Paragraph (xvii) of Article 2 of the Model Law provides one of the key definitions of the Model Law – the definition of the term PPP for the benefit of people. It is defined as "a type of public-private partnership developed for the implementation of the SDGs" (The full definition is as follows: PPP for the benefit of people - a public-private partnership focused on the interests of people; means a type of public-private partnership (PPP) developed for the implementation of Sustainable Development Goals and, thus, corresponding to the goal. It is defined as an improved approach to PPP that overcomes some of the shortcomings of the traditional PPP model. PPPs are contractual instruments for providing public infrastructure with initial private financing. They include two types: state-paid PPPs, which are mainly funded by taxpayers, and concessions, which are mainly funded by infrastructure users [approx. my translation is VE].), that is, as a separate type of PPP. At the same time, the Model Law does not distinguish between different forms of PPP, does not establish the distinctive features of PPP for the benefit of people as an independent form of PPP. On the other hand, further in the text of this paragraph, PPP for the benefit of people is defined as an improved approach to PPP, which allows overcoming some of the shortcomings of the traditional PPP model. PPPs are contractual instruments for providing public infrastructure with initial private financing. They include two types: "state-paid PPPs", which are mainly funded by taxpayers, and "concessions", which are mainly funded by infrastructure users." It can be stated that PPP for the benefit of people is defined simultaneously as an independent legal regime for investment by a private partner and as an add-on to the main PPP models used by states. This dichotomy creates an ambiguous interpretation, to eliminate which it is advisable to abandon the definition of PPP for the benefit of people as an independent type of PPP.  

It seems that the work of the UNECE on the implementation of PPP for the benefit of people is a time-consuming and very complex process, but the existing "stalling" on the implementation of PPP for the benefit of people as the main tool for achieving the SDGs is a contradictory understanding of this institution.  The SDGs should become the main reference point for PPP as a strategic goal, and subsequently an integral part of it. Further work should consist not just in adding the phrase "PPP for the benefit of people" or "SDGs", but in introducing methods for assessing the compliance of public-private partnership projects with the SDGs. From the point of view of developing a Model Law, it should be noted that there is no need to develop a separate type of PPP, which from the point of view of the basis (PPP agreement or concession agreement) is conceptually no different, it is only necessary to determine which PPPs will relate to PPP for the benefit of people. It also seems necessary to summarize the best legislative practices for PPPs in general and with a focus on achieving the SDGs in particular. An additional push to stimulate PPP lending at preferential rates, as well as additional tax, environmental and other benefits can stimulate private and public parties to achieve the SDGs.

lex PPPs

The practice of implementing PPP projects often outstrips the regulatory consolidation of turnover structures, and the cross-border nature betrays a certain inconsistency of individual contractual provisions. For example, the institution of special circumstances, which has actually become an integral part of PPP agreements, is new to the Russian law and order. The essence of this institution is the possibility of compensation for losses of a private or public partner in the event of certain events, that is, in essence, we are talking about risk allocation. When, as in domestic law, such an institution can only be conditionally qualified through losses, penalties and compensation for losses within the framework of the implementation of entrepreneurial activity (406.1 of the Civil Code of the Russian Federation).

When it comes to cross-border PPPs (for example, when a PPP facility is located on the territory of two states), the leading role is played by international organizations, in particular, the World Bank, which has developed model conditions and recommendations for PPP contracts. In this regard, it is impossible not to mention the term lex PPPs introduced by S. V. Maslova, which denotes a set of principles and rules aimed at streamlining individual cross-border relations arising in connection with the conclusion and execution of a PPP agreement and other project agreements [8].

It seems that it is lex PPPs that can currently become the main driver of the implementation of the sustainable development agenda in PPP agreements. In part, some recommendations of international organizations already contain references to sustainable development and the achievement of the SDGs, however, it is through "soft power" that the "greening" of the PPP agenda is most likely.

Conclusion

According to the results of the analysis, it can be concluded that a PPP for the benefit of people is more of a superstructure than a basis. The key remains PPP as a mechanism that requires reform in order to give it a more socially oriented agenda and implement compliance with the achievement of the SDGs as a KPI. The stimulation of new opportunities for private sector financing for the creation of public infrastructure should improve public access to this kind of infrastructure, not limit it. The key balances to achieve such parity should be legislative (Model Law) and contractual work (lex PPPs). This can make it possible to implement PPP projects for the benefit of people more likely and in cases where the state prioritizes the needs of nature and man.

In the course of the study, the Author analyzed the initiatives of the UNECE in the field of public-private partnership. The main results of the study include the fact that aspects that slow down the promotion of the sustainable development agenda in the field of public-private partnership were identified (contradiction of terms, lack of incentives for implementation for investors), a definition of public-private partnership for sustainable development goals was given, and it was also revealed that lex PPPs can become an effective tool to achieve the Sustainable Development Goals through their implementation in PPP agreements.

References
1. Introduction to Public-Private Partnerships to Achieve the United Nations Sustainable Development Goals (2022). Retrieved from https://unece.org/sites/default/files/2022-10/ECE_CECI_WP_PPP_2022_06-ru.pdf
2. Report of the World Commission on Environment and Development dated 08/04/1987 A/42/427 (1987). Retrieved from http://www.un.org/ru/ga/pdf/brundtland.pdf
3. UNECE Methodology for assessing public-private partnerships for people benefiting achievements. Sustainable Development Goals Self-Assessment Tool User's Guide.Project. (2022). Retrieved from https://unece.org/sites/default/files/2022-01/Russian%20-%20User%20Guide%20Self-Assessment%20Tool.pdf
4. UNECE Guiding Principles on Public-Private Partnerships for Achieving the United Nations Sustainable Development Goals-Access (2022). Retrieved from https://unece.org/sites/default/files/2022-11/ECE_CECI_WP_PPP_2022_07-ru.pdf
5. Zapatrina, I. V. (2017). Public-private partnership for the Goals of Sustainable Development. Kyiv, Ukraine: Swan.
6. Zapatrina, I. V. (2012) The role of public-private partnership in the modernization of developing economies. Economic science of modern Russia, 56, 49-61.
7. Maslova, S. V. (2021). Development of the concept of public-private partnership in the international legal environment. Bulletin of St. Petersburg University. Law, 11(4), 950-971.
8. Maslova, S.V. (2021), Trends in the development of international legal regulation of international and cross-border relations in the field of public-private partnership. Saint Petersburg, Russia: Saint Petersburg State university.
9. Popondopulo, V. F., Sheveleva, N. A. (Eds.). (2015) Public-private partnership in Russia and foreign countries: legal aspects: collective monograph. Moscow, Russia: Infotropic Media.
10. Resolution of the UN General Assembly of September 25, 2015 A/RES/70/1.Agenda for Sustainable Development. (2015). Retrieved from https://undocs.org/ru/A/RES/70/1
11. Fomin, M.V. (2016). Sustainable (non)development. World Economy and International Relations, 60(5), 73-83.
12. Ceruti, M. (2017). Sustainable Development and Smart Technological Innovation within PPPs: The Strategic Use of Public Procurement. European Procurement & Public Private Partnership Law Review (EPPPL), 12(2), 183-191.
13. Draft standard on People-first PPP/Concession Model law (2021). Retrieved from https://unece.org/eci/documents/2021/11/working-documents/draft-standard-people-first-pppconcession-model-law
14. Dragos, D., Neamtu, B. (2013). Sustainable public procurement: Life-Cycle Costing in the New EU Directive Proposal. European Procurement & Public Private Partnership Law Review (EPPPL), 8(1), 19-30.
15. Fadeyi, O. I., Kehinde, O. J, Nwachukwu, C., Adegbuyi, A. A., Agboola, O. O. (2018). Public private partnership for sustainable infrastructural development in Lagos metropolis: prospects and challenges. Research and science today journal, 1(15), 25-40.
16. Ma, M., Wang, N. (2020). Public–private partnership as a tool for sustainable development – What literatures say? Sustainable Development, 29(1), 243–258.
17. Maslova, S. V. (2020). People-first PPPs impact assessment tool: UNECE's Evolutionary Approach and Possibilities for Implementation in National Jurisdictions. Annual GSOM Emerging Markets Conference, 356-358.
18. UN General Assembly. Transforming our world: the 2030 Agenda for Sustainable Development, 21 October 2015, A/RES/70/1. (2015). Retrieved from www.refworld.org/docid/57b6e3e44.html
19. UNECE PPP and Infrastructure Evaluation and Rating System. (PIERS). Retrieved from https://unece.org/ppp/em
20. Zapatrina, I. (2016). Sustainable Development Goals for Developing Economies and Public-Private Partnership. European Procurement & Public Private Partnership Law Review (EPPPL), 11(1), 39–45.

First Peer Review

Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.

The subject of the study. In the peer-reviewed article "Public-private partnership to achieve the UN Sustainable Development Goals", the subject of the study is the norms of law governing public relations related to public-private partnership as "the most in-demand mechanism for the creation, reconstruction and modernization of infrastructure in the world", in particular, the provisions of the draft model law "Public-Private Partnership for the benefit of people." Research methodology. When writing the article, such methods were used as: logical, historical, theoretical and predictive, formal legal, system-structural, comparative law and legal modeling. The methodological apparatus consists of the following dialectical techniques and methods of scientific cognition: analysis, abstraction, induction, deduction, hypothesis, analogy, synthesis, typology, classification, systematization and generalization. The use of modern methods made it possible to study the existing approaches, views on the subject of research, develop an author's position and argue it. The relevance of research. The dominant concept of sustainable development in the 21st century has a transformative effect on all spheres of international relations. "The crystallization of the concept of sustainable development in the modern sense is reflected in the 17 Sustainable Development Goals (formulated in 2015)." Of particular importance is "Goal 9. "The creation of sustainable infrastructure, the promotion of inclusive and sustainable industrialization and innovation," through which the need for humanity to create an infrastructure that meets the criterion of sustainability is clearly traced," since it is infrastructural growth that contributes to the development of all spheres of activity and relationships, and the key means of achieving this is the mechanism of public-private partnership. These circumstances indicate the relevance of doctrinal developments on this topic in order to improve rulemaking and the practice of its application. Scientific novelty. Without questioning the importance of previous scientific research, which served as the theoretical basis for this work, nevertheless, it can be noted that this article for the first time formulated noteworthy provisions, for example: "... We propose to define a PPP for the SDGs (or sustainable PPP) how to implement an investment infrastructure project based on a PPP agreement that meets the triad of components of sustainable development: social, environmental and economic." Based on the results of writing the article, the author has made a number of theoretical conclusions and suggestions, which indicates not only the importance of this study for legal science, but also determines its practical significance. Style, structure, content. The article is written in a scientific style, using special terminology. As a comment, it can be noted that the article is overloaded with abbreviations, which complicates the perception of the material. Words are repeated in sentences (for example, ... sustainable development ... a sustainable future ...). However, in general, the material is presented consistently and clearly. The article is structured. Although, perhaps, the introduction to the article needs to be finalized, since it does not quite meet the requirements for this part of the scientific article. In addition, in conclusion, it would be necessary to formulate the main results that the author achieved during the research. The conclusion contains fragmentary phrases: "... more likely in those cases...". The text of the article should be carefully proofread by the author. The remarks are disposable. The topic is disclosed, the content of the article corresponds to its title. Bibliography. The author has used a sufficient number of doctrinal sources. References to sources are designed in accordance with the requirements of the bibliographic GOST. Appeal to opponents. A scientific discussion is presented on certain issues of the stated topic, and appeals to opponents are correct. All borrowings are decorated with links to the author and the source of the publication. Conclusions, the interest of the readership. The article "Public-private partnership to achieve the UN Sustainable Development Goals" is recommended for publication with the condition of its completion. The article corresponds to the topic of the journal "International Law and International Organizations". The article is written on an urgent topic, has practical significance and is characterized by scientific novelty. This article may be of interest to a wide readership, primarily specialists in the field of international law, and will also be useful for teachers and students of law schools and faculties.

Second Peer Review

Peer reviewers' evaluations remain confidential and are not disclosed to the public. Only external reviews, authorized for publication by the article's author(s), are made public. Typically, these final reviews are conducted after the manuscript's revision. Adhering to our double-blind review policy, the reviewer's identity is kept confidential.
The list of publisher reviewers can be found here.

The article "Public-Private Partnership for achieving the UN Sustainable Development Goals" is submitted for review for publication in the journal International Law and International Organizations. The title of the article corresponds to the passport of the scientific specialty 5.1.5 – International legal sciences. At the same time, the work complies with the journal's policy of publishing articles devoted to a comprehensive study of topical issues of international law. The author points out the UNECE initiative on the introduction of PPP for the benefit of people, characterizes and defines public-private partnership for sustainable development, and examines a new approach for transnational PPP projects - LEX PPPs, which should become a driver for the implementation of sustainable development goals in PPP agreements. When researching the subject, the author turned to monographic and scientific works of Russian and foreign scientists on the legal relations under study and identified elements of successful development in the field of public-private partnership. The conclusions are also based on the study of principles and norms, methodological recommendations, and the practice of implementing PPP projects. The tendency to outpace the latter is stated against the background of slowing regulatory frameworks. One of the disadvantages is the weak theoretical elaboration. In connection with these urgent problems, the author proposed the author's formulation of the definition of public-private partnership for sustainable development, and also revealed that lex PPPs can become an effective tool for achieving sustainable development goals through their implementation in PPP agreements. The methodology used in writing the article is based on general scientific methods of cognition of the subject of research. The following general scientific methods are used: analysis, synthesis, induction, deduction, analogy as general logical rules for the implementation of a researcher's mental activity when studying the subject of an article, analyzing legislation, and law enforcement practice. Private scientific research methods are also applied: formal-logical, comparative-legal, interpretation of the norms of administrative legislation. In general, the author's article is competently structured, logically consistent and presented in scientific language. The paper draws conclusions and suggestions, the practical and scientific value of which is not questioned and will attract the attention of students of legal fields of study in universities, researchers and practicing lawyers. The bibliographic list used in the preparation of the article, extensive and sufficient for a full–fledged study of the subject designated by the author, includes 20 sources, half of which are international publications and publications of the authors in peer-reviewed publications in international databases of scientific citation. The reviewer's conclusion: the article "Public-private partnership to achieve the UN Sustainable Development Goals" can be published in the journal International Law and International Organizations after its revision in terms of the above comments.