Technical Trade Barriers Brazil: The case of organic imports

National regulation for organic production in Brazil was implemented on January 1st of 2011, demanding all imported organics to be certified according to the specifics of Brazilian norms. This new regulatory framework brought a particular condition of technical barriers to trade in the country, as it makes it unfeasible for foreign brands to locally certify their organic manufacturing processes due to the complex demand of tracking all raw material used in production, extending it to the need of multiple certification packages far down the supply chain.

For US brands, for example, the inability to conform to such measures becomes particularly proven by the fact that the largest and most recognized certifying agency in Brazil (IBD) has only two certified US producers in their database – both in the very primary base of agricultural production.

This article is an attempt to initiate a debate on possible alternatives to stimulate market transformation and perhaps openness to organic imports. In this sense, we propose the following four potential strategies for local market development:

Strategy 1: Conform to certification norms

Though in itself the national regulation structure is one of extremely difficult comformity, the program is setting the bar at a high quality assurance standard for organic farming and industrialization practices – not at all prejudicial to a conscious consumer demand. Files containing the regulatory framework for organic certification in Brazil are available for download in this link.

Strategy 2: Adopt a market driven approach

Adaptation is a premise of international markets, so if no other option seems to be feasible, then foreign companies must adapt the product to local market features.

Brazil is a potential market with roughly 200 million consumers, which makes it unquestionable that the cost-benefit relation of investing in marketing and package redesign is no higher then either certifying or interfering in regulation. Plus, in order to be commercialized in accordance to current regulations, organic products must show the BR certification logo on the package, so some level of adaptation would occur either way. In fact, one strong argument behind the defense of current regulatory practices is on policy reciprocity, being that brazilian brands very frequently must conform to foreign market conditions.

Based on Decrete 6323, Chapter II, Section III – Of the Technical Regulation of Production. Art. 9o. Paragraph 2o. The norms for products from sustainable organic extrativism will be applied only to those which have as its objective the identification as an organic product.

The suggestion here is finding a substitution for the branding term organic, yet making sure it doesn’t fall into the specifics of organic regulation. This will most likely drive the consumer to rethink the concept. Some adapted branding examples are: Sustainable Production, Sustainable Culture, etc. In short, developing a local marketing strategy that compensates for the lack of organic certification.

We do however, have to observe the following Decrete 6323, Chapter IV, Section III. Of Publicity and Advertising. Art. 23. It is forbidden, in the publicity and advertising of products that are not produced within organic systems of production, the use of expressions, titles, marks, images or any other mode of information capable of inducing the consumer to error in regards to the organic quality of products.

But we should also notice that there is room for interpretation in the text, and specially when crossing this passage with the one previously mentioned – of not objectively identifying (i.e. cathegorizing) the product as organic or even as a product sourced from an organic system of production (i.e. if you don’t meet the specifications in the law, then you’re not producing from such a system). This strategy implies the creation of a new market concept for toxin free production.

For some particular cases, what is present today in Brazil is a market opportunity to focus on the consumer who is lactose intolerant, and/or in the phases of substituting animal products for a plant based diet. And lastly, a peculiarity of the brazilian market is that imported brands are often placed as premium products, and brands from developed markets are often a reference to high quality standards, and therefore pricing is not a limitation when companies still have room for similar profit margins expected from organics per se.

Strategy 3: Diplomatic articulation for regulation revision

Though a time intensive, unsure and expensive process, participation in regulation revision if foreseen in the following passages:

Law 10831, Art. 11, Paragraph 1. The regulation will contemplate the participation of representatives of the agricultural sector and civil society with recognized participation in any stage of the organic production chain; and

Law 10831, Art. 11, Paragraph 2. The regulation of this Law will be revised and updated when necessary and, in the maximum, every four years.

These revisions are executed through a specific mechanism, as per Decrete 6323, Chapter III, Section II – Of the Commissions. Art. 34. Responsibilities of CNPOrg (National Comission). II. Propose regulations that have as objectives the improvement of the organic production chain at the national and international levels, considering proposals sent by CPOrg-UFs (Comissions from each state).

These are the comissions to which proposed formulations must be addressed. An interesting suggestion is to provide an international mechanism  under the structure of an Economic Complementation Agreement for thorough transfer of technology and technical capacitation of local producers, allowing significant improvements in national quality and productivity, specially targeting the country’s national family farming programs.

Needless to mention, Brazil is a developing economy that is greatly damaged by a lack of good public governance practices, and local producers, broadly capillarized into a network of small traditional farming communities, would significantly suffer the social impacts of fierce corporate competition.

Strategy 4: Mobilize a dispute or agreement under the WTO TBT

Claiming that the brazilian government is violating the World Trade Organization’s Technical Barriers to Trade Agreement is an option. In this link you will find a copy of the agreement with key highlights in consideration to this particular case. However, the text can be interpreted in such a broad and subjective manner, that under the agreement you will find arguments for both in favor and against current regulatory practices in Brazil, as likely as in many cases of TBT disputes in the WTO system. So, ultimately, this option is more reliable if an inclusive counterproposal for standardized practices is put in place.

Author: Juliana Michelon Alvarenga. BSc. International Relations, MBA Business Intelligence. [julianama@aldeotaglobal.com]

Advocacy strategy for the sustainable transition of high impact enterprises

Building a sustainable strategy sometimes demands complex action plans involving multidisciplinary and interdependent areas of any organization. Such approach may come at high planning and interwoven execution costs, which may represent the first barrier at the decision making process on transitioning from an ordinary twentieth century business to a sustainable twenty-first century enterprise.

However, if your organization is indeed intending to incorporate the new business development model in its institutional framework, action shall not precede planning, and a simple road map to guide a first discussion on which actions should be given priority to during the transitional phase – however long it may last – will certainly fit a broader purpose. The following are the four key elements I believe lies at the core of a well planned head start.

Research & Development: R&D is the primary element in changing the ways in any organization, thus it provides technological solutions for current industrial processes that may release harmful residues to the environment, as well as new modes of product development. As we experience great increase in innovation initiatives along with growing incentives, having a strong R&D system may support consistent economic and intellectual property growth.

Measures of Compensation: Sustainability implies rational use of resources, and that means understanding the need of mitigating negative environmental and social impacts through reconstructive initiatives, such as the recovery of damaged areas, treatment of contaminated resources or restablishment of displaced communities. This may intertwine with the organization’s R&D capacity, for the development of specific technologies, or plans for community engagement in the cases of considerable social impacts.

Community Engagement: It is important to engage community members for awareness growth. This is the element conducting collective and collaborative transformation, which may be provided through capacity building and interactive educational campaigns.

Corporate Governance: It is essentialy important for any institution to publicly engage through incorporating governmental measures and combining internal and public policies in order to attract political support and stronger institutional recognition. At a time when private sector is continuously growing its active participation in development policies construction, incorporating external policy models may contribute to building holistic synergies between enterprises, market, society and government.

Legal Services in Brazil: Business environment, market opportunities and engagement strategy

Generally stating, legal services is a highly competitive sector in Brazil, and engaging in profitable business development often depends on persistent and long term relationship building as an inherent trait of the country’s business culture.

Traditionally, there is a vast area of legal specializations, all of which contain extensive and complex law structures that undergo frequent amendments. Furthermore, new sub-areas are emerging to show growing demand as in response to the more recent dynamics of the country’s economic and market’s development.

As an overview of the commercial structure, corporate accounts and large economic groups sit in the country’s financial hub – the city of São Paulo – and also, on a lower scale, in the city of Rio de Janeiro. Such centralization of accounts is generally consistent in cases of larger ventures held throughout other regions, whilst smaller accounts are negotiated through local offices.

International investment opportunities in Brazil are found within a vast range of segments from which different areas of legal services can benefit from. Throughout recent years, large investments have been particularly applied into the sectors of infrastructure and civil construction, creating high demands for quality legal advise from independent law firms for contract management. However, although through a short term analysis we may identify the stabilization of growth in governmental funding disbursement – which limits new players into larger governmental contracting schemes – and also, considering current crisis in former due diligence practices towards the realization of ROI from large national contractors, public biddings may still be a strong possibility for foreign practitioners provided with strategic local alliances and engaged support from well established groups of interests, including the execution of articulations for technical cooperation from diplomatic officials at institutional levels.

According to the report released in February of 2013 on Perspectives of Investment from BNDES (National Bank for Economic and Social Development) – which strictly follows federal development financing policies – disbursements will considerably benefit the sectors of oil & gas, logistics, and aerospace industries, respectively. In this sense, market entrance for legal services related to such public biddings may be well planned and executed for large and medium sized law firms.

Alternatively, smaller businesses may explore more fragmented market opportunities such as legal disputes and out-of-court negotiations in the financial, consumer, and labour areas. Higher demand seems to be arising in these areas due to the particular effects of lower than estimated economic growth. The underachieved predictions, combined with recent – and quite sudden – eased access to credit have been contributing to the increase of delinquency rates from companies and individuals, and therefore augmenting litigations.

Lastly, it seems fortunately important to highlight the opportunities within the momentum of corporate tax planning and restructuring. This is a market move currently well observed through large leading consulting groups already present in the country such as Ernst & Young, PwC and KPMG, for example. Such legal services may be served by offices specialized in tax legislation.

But foremost, relationship building lies at the core of structuring any engagement strategy within the legal services and business community in Brazil. Besides mapping out and segmenting market opportunities based in the particular interests of the law firm, it is essential to carefully map and analyse specific related institutions – such as the Brazilian Bar Association and other influential organizations. Ultimately, identifying local law firms according to regional market strategies serves the purpose of developing a network of potential partnerships.

The one information source that seems to be especially relevant is the annual publication by Exame SA Advocacia, which concentrates not only a comprehensive sector analysis, but also ranks the 500 largest and most influential law firms in the country, along with including details on size, contact information and areas of commercial activity.

Snowden’s appeal for public debates on Global Governance and Big Data

It is quite unfortunate to be an observer of such an important discussion not taking place at the level it should be in our global arena. All the fuss that took place over Edward Snowden’s courage of standing up and speaking his mind to global spectators on unethical practices executed by a governmental institution – and please note the intended broad purpose on using this particular expression – have been slowly phasing out while the guy humbles his way into simply re-establishing a safe place to live and stay.

Despite the reaction of the multilateral positioned public, what is really in question here is his reasons for “whistleblowing” his way out of a comfortable and well privileged life. Edward Snowden bet his life-worth of professional opportunities with a specific purpose: a better world. And leaving aside the counterbalanced debate on realism versus idealism views, the young professional stood up for an entire generation that has been raised alongside massive worldwide political and intellectual efforts on constructing the very foundation of the long emerging ethical social models of democracy and sustainable development.

By undertaking a close analysis on his original interview, it becomes clear that his statements over his motives behind the decision of acknowledging the public about the abusive surveillance practices that take place at high level authority tables are not only genuine, but also well reasoned:

“But if you realize that that’s the world you helped create and it’s gonna get worse with the next generation and the next generation who extend the capabilities of this sort of architecture of oppression, you realize that you might be willing to accept any risk and it doesn’t matter what the outcome is so long as the public gets to make their own decision about how that’s applied.”

And particularly interesting is his further observation that explores, even if not intentionally, but to the core of political science theories, the dual conflicting concept of personification versus personalization of power, that, if not duly comprehended and rightly suited at both the individual and collective levels, may alienate the governmental body from its people.

When the interviewer stated that many people would possibly consider Snowden being in Hong Kong as to “seeking to aid an enemy of the United States”, he responds by correcting the assumption of China being an enemy: “It’s not. I mean there are conflicts between the United States government and the Chinese PRC government but the peoples inherently we don’t care. We trade with each other freely, we’re not in armed conflict, and we’re not trying to be. We’re the largest trading partners out there for each other.” When then he defends his choice of Hong Kong for its tradition on free speech and political manifestation, closing his interview by exposing his worries of no change after the disclosures, and such continuing abuse of authority leading to a world of tyranny.

Indeed, Snowden may not see any change in the short term. It seems as his outbursting plead for public criticism can’t mobilize enough of a critical thinking mass for debating over sciences of such complex nature, and rather technically untapped by the majority of society. The regular individuals out there who have been having their everyday personal information collected, stored, and analysed by governmental agencies most of the time don’t even read privacy policies from the medias through which they communicate. In fact, most people wouldn’t know what to do, where to go, nor have the means in order to face the organizations that are yielding their data into third party systems.

Private organizations and businesses, on the other hand, have a lot to lose by not demanding proper multilateral discussions in order to set the grounds and benchmark enforced policies on ethical practices for the use of the fast evolving information technology structures. Thus, it seems like many of us have been underestimating the historical importance of Snowden’s individual efforts, made at such a high personal cost, to call the attention of global institutions to the inexistence of formal data governance laws and agreements.

To my utmost understanding, Snowden is the empowered high technical guy who throughly understands, by experience, the intangible magnitude of big data use, and urged the world to publicly discuss its cross-border political implications.

Accession of the Russian Federation to the World Trade Organization

Russia’s accession to the WTO cleared a major hurdle when the WTO Working Party on its accession approved, ad referendum on 10 November 2011, the package spelling out Russia’s terms of entry to the organization. The Working Party will now send its accession recommendation to the 15 – 17 December Ministerial Conference, where Ministers are expected to approve the documents and accept Russiaas a WTO Member. [1]

All unrestricted WTO documents on accession of Russian Federation.

As part of the accession accord, Russia has agreed to undertake a series of important commitments to further open its trade regime and accelerate its integration in the world economy. The deal offers a transparent and predictable environment for trade and foreign investment.

From the date of accession, the Russian Federationhas committed to fully apply all WTO provisions, with recourse to very few transitional periods (see details below). The Russian Federation’s commitments will include the following:[2]

  • Market access for goods
  • Market access for services
  • Export duties
  • General commitments on market access
  • Industrial and agricultural subsidies
  • Pricing of energy
  • Sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT)
  • Trade-related investment measures
  • Protection of trade-related intellectual property
  • Transparency
  • Functioning of the Custom Union betweenRussia,KazakhstanandBelarus

There is considerable concern about the disparity in incomes in Russia. The richest Russian regions are 67 times richer than the poorest Russian regions in nominal terms and 33 times richer when price differences between the regions are taken into account (World Bank, 2005). The richest regions include the European North, Moscowand the resource rich regions of Siberia and the Far East. The poorest regions include the North Caucuses, Southern Siberia and Central Russia.[3]

All text is reposted Ipsis litteris from its official sources for information purposes only.

Bilateral Relations Brazil – Finland

On February, 14 2012, Mr Jyrki Katainen, Prime Minister of Finland was received by Dilma Roussef, President of Brazil, with the second largest ever official delegation sent from Finland to anywhere in the world. They talked about strengthening bilateral cooperation on science, technology, innovation and education.

On Education, Mr Katainen assumed the commitment of providing better access to institutions and research centers in Finland, to students and researchers under the Brazilian national program Science without Borders. Representatives from the Brazilian national institutions that coordinate the program will sign an agreement that adds Finland to the program. It has also been agreed on adding the entrepreneurial sector to the educational opportunity in order to qualify workers already in the job market.

It the press release by the Brazilian Ministry of External Relations, it is said that in order to strengthen bilateral cooperation on environmental issues, the countries are structuring a Memorandum of Understanding.

The bilateral diplomatic relations between Brazil and Finland has in records 6 (six) bilateral treaties, from which two are not valid. The existing agreements are as follows:

  • Agreement on Economic and Industrial Cooperation – celebrated in 1981 and put into force in 1983
  • Agreement on Cultural, Educational and Scientific Cooperation – celebrated in 1988 and put into force in 1990
  • Agreement to avoid double taxation and to prevent tax evasion on matters of income taxes – celebrated in 1996 and put into force in 1997
  • Memorandum of Understanding on Cooperation in the Areas of Climate Change and the Development and Execution of Projects under the Clean Development Mechanism from the Kyoto Protocol – celebrated and put into force in 1997

It is important that private sector, civil society and other interests groups follow up on these governmental agreements. They are important instruments and subsidies for project development initiated by institutions other than governmental agencies.

Roadmap for discussion for the United Nations Conference for Sustainable Development (UNCSD)

The United Nations Organization plan

Agenda 21

Global Compact

ICC Anti-corruption policy and business practices:The Anti-Corruption Commission encourages self-regulation by enterprises in confronting issues and provides business input into international initiatives to fight corruption.

Business Objectives for the UN convention against corruption: Monitoring, technical Assistance, and asset recovery.

ICC Rules of conduct and recommendations: Enterprises should establish reasonable controls and procedures; follow-up and promote the rules.

Natural Resouces

The U.S., Australia, Brazil, Indonesia, and island states across the Pacific and Caribbean are among those advancing calls for more marine environments to be placed under legal protection, providing sanctuary for threatened species, habitats and ecosystems.

  • Public Health
  • Water

Corporate Sustainability

  • Energy and climate
  • Water and ecosystems
  • Agriculture and food
  • Social development
  • Urbanization and cities
  • Economics and Finance of sustainable development