TOP 5 TAKKAR NEWS OF THE DAY (28th JUNE 2023)

1. BRAZIL GLOBAL ENVIRONMENT FACILITY (GEF) MEET

TAG: GS 3: ENVIRONMENT

THE CONTEXT: At the 64th Global Environment Facility (GEF) council meeting in Brazil, the governing body approved the disbursement of $1.4 billion to accelerate efforts to tackle the climate, biodiversity and pollution crises. Over half a billion dollars set aside for work on biodiversity.

EXPLANATION:

• Adequate funds are needed to meet the 4 goals & 23 targets set under the Kunming-Montreal biodiversity framework by 2030.
• Of this, $653 million has been set aside for biodiversity and this would be used to help countries update their National Biodiversity Strategies and Action Plans, biodiversity programmes and meet the targets of the Kunming-Montreal Global Biodiversity Framework (GBF) agreed in December.
• This is the second work program of the GEF-8 funding period, which runs from 2022 and 2026.
• The funding package includes support for 136 countries and has a significant focus on action to address species and habitat loss, in line with the GBF.
• Keeping this in mind, 47 per cent of the funds have been earmarked for work on biodiversity, followed by 16 per cent for climate change, 12 per cent for land degradation, 11 per cent for international waters and 6 per cent for chemicals and waste.
• The Latin America and the Caribbean region is getting the most of the funds, followed by the Africa region. Out of the 18 implementing agencies for GEF; the United Nations Development Programme is getting the maximum funds followed by the UN Environment Programme and the Food and Agriculture Organization.
• At the 15th Conference of Parties to the UN Convention on Biological Diversity, it was decided that a new trust fund, GBF, would be put in place to run the projects under the framework.
• Approval to establish the GBF fund with the objective to ratify it at the upcoming GEF Assembly in August 2023 will now ensure “adequacy, predictability and timely flow of funds” in the implementation of the Kunming-Montreal biodiversity framework.
• Adequate funds are needed as there are merely eight years to meet the four goals and 23 targets set under the Framework.

 Global Environment Facility (GEF):

• Global Environment Facility (GEF) is a family of funds dedicated to confronting biodiversity loss, climate change, pollution, and strains on land and ocean health.
• Its grants, blended financing, and policy support helps developing countries address their biggest environmental priorities and adhere to international environmental conventions.
• Over the past three decades, the GEF has provided more than $22 billion and mobilized $120 billion in co-financing for more than 5,000 national and regional projects.
• GEF funds are available to developing countries seeking to meet the objectives of international environmental agreements.
• Support is provided to government agencies, civil society organizations, private sector companies, research institutions, and other partners to implement projects and programs related to environmental conservation, protection, and renewal.
• The GEF’s governing structure is organized around an Assembly, Council, Secretariat, 18 implementing agencies, a Scientific and Technical Advisory Panel, and the Independent Evaluation Office.
• The Council, the GEF’s main governing body, comprises 32 members appointed by constituencies of member countries.

2. NEW CERTIFICATION SCHEME FOR ANTIBIOTICS MANUFACTURING

TAG: GS 2: HEALTH ISSUES

THE CONTEXT: A new certification scheme to promote responsible antibiotics manufacturing was launched in India on June 26, 2023, by British Standards Institute (BSI) and AMR Industry Alliance.

EXPLANATION:

• In 2022, The AMR Industry Alliance and BSI came up with a set of Antibiotic Manufacturing Standards and launched the certification to ensure their implementation.
• AMR Industry Alliance, one of the largest private sector coalitions that provide long-term solutions to antimicrobial resistance, engaged BSI, a business improvement and standards company, to provide expert services for the development of this standard.
• Responsible antibiotic production is critical to encouraging sustainable drug production.
• This also addresses growing environmental concerns about antimicrobial resistance (AMR) by limiting the release of antibiotic residues into waterways through industrial waste, which contributes significantly to AMR, particularly the environmental aspect of it.
• Antibiotic residues enter waterways from various sources, including hospital wastewater, farms, sewage systems and others. While antibiotic overuse in humans and animals is considered the primary cause of AMR, the environmental aspect of AMR is gaining global attention.
• The certification is the first of its kind, with a third-party validation process, to monitor environmental concerns in the antibiotic manufacturing process. The certification helps in determining whether environmental and waste control procedures are in place throughout the manufacturing process.
• This intends to ensure that the concentration of antibiotics in waste streams is below a threshold that does not result in the emergence of AMR in the environment. During the development of this certification, several manufacturers have expressed their willingness to self-regulate the processes.
• A manufacturer should provide effective environmental management and a wastewater treatment system that minimises the discharges of active pharmaceutical ingredients to obtain certification. The certificate, once issued, is valid for three years. Annual surveillance is carried out to ensure ongoing maintenance.
• Antibiotic concentration at the release point must be less than the predicted no-effect concentration the level at which the chemical has no toxic effect and will not promote AMR to meet the certification standard.
• Waste should be minimised and strictly controlled every time production is run, so we want to create a robust environmental management system,” said Steve Brooks, an advisor to the AMR Industry Alliance.

ANTIMICROBIAL RESISTANCE (AMR):

• Antimicrobial resistance (AMR) threatens the effective prevention and treatment of an ever-increasing range of infections caused by bacteria, parasites, viruses and fungi.
• AMR occurs when bacteria, viruses, fungi and parasites change over time and no longer respond to medicines making infections harder to treat and increasing the risk of disease spread, severe illness and death. As a result, the medicines become ineffective and infections persist in the body, increasing the risk of spread to others.
• Antimicrobials – including antibiotics, antivirals, antifungals and antiparasitics – are medicines used to prevent and treat infections in humans, animals and plants. Microorganisms that develop antimicrobial resistance are sometimes referred to as “superbugs”.
• Increased use and misuse of antimicrobials and other microbial stressors, such as pollution, create favourable conditions for microorganisms to develop resistance both in humans and the environment.
• Bacteria in water, soil and air for example, can acquire resistance following contact with resistant microorganisms. Human exposure to AMR in the environment can occur through contact with polluted waters, contaminated food, inhalation of fungal spores, and other pathways that contain antimicrobial resistant microorganisms.

What is the impact of AMR?

• The World Health Organization (WHO) lists AMR among top 10 threats for global health. Antimicrobial resistance threatens human and animal health and welfare, the environment, food and nutrition security and safety, economic development, and equity within societies.
• Antimicrobial resistance in mycobacterium tuberculosis, malaria parasites, viruses, and HIV is becoming a reality that could increase human suffering.
• It could also deal a huge blow to the world economy due to productivity losses, increased healthcare costs and a rise in poverty. Even if it is a global crisis, poverty, lack of sanitation and poor hygiene make AMR worse. Also, AMR disproportionately impacts Low-Income Countries and Lower-Middle-Income Countries. AMR is thus an equity issue too.

Management and response to AMR:

• Environment plays a key role in development, transmission and spread of AMR. Therefore, the response must be based on a One Health approach, recognizing that humans, animals, plants and environment are interconnected and indivisible, at the global, regional, and local levels from all sectors, stakeholders, and institutions.
• Prevention is at the core of the action needed to halt the emergence of AMR and environment is a key part of the solution

3. US INDIA DIGITAL TRADE

TAG: GS 2: INTERNATIONAL RELATIONS

THE CONTEXT: U.S. industry body CCIA backed by the likes of Google and Meta has flagged India’s “protectionist” approach to US digital services providers while also describing a set of other policies as trade barriers.

EXPLANATION:

• During Prime Minister’s U.S. state visit, cooperation on technology emerged as a prominent talking point and yielded some of the most substantive outcomes.
• However, digital trade is also the area where some of the biggest U.S. tech companies have recently flagged multiple policy hurdles, including “India’s patently protectionist posture”.
• Earlier this year, the Washington D.C.-headquartered Computer & Communications Industry Association (CCIA), with members like Amazon, Google, Meta, Intel, and Yahoo, flagged 20 policy barriers to trading with India in a note titled “Key threats to digital trade 2023”.

What is the current status of India-U.S. technology trade?

• Notably, in FY2023, the U.S. emerged as India’s biggest overall trading partner with a 7.65% increase in bilateral trade to $128.55 billion in 2022-23. However, digital or technology services did not emerge as one of the sectors at the forefront of bilateral trade.
• The CCIA points out in its report that “despite the strength of the U.S. digital services export sector and enormous growth potential of the online services market in India, the U.S. ran a $27 billion deficit in trade in digital services with India in 2020”.
• In the recent past, however, the two countries have been ramping up their tech partnership through moves like the Initiative on Critical and Emerging Technology (iCET).
• Under the iCET, India and the U.S. agreed to cooperate on critical and emerging technologies in areas including artificial intelligence, quantum computing, semiconductors and wireless telecommunication.
• Additionally, under the iCET, India and the U.S. also established a Strategic Trade Dialogue with a focus on addressing regulatory barriers and aligning export controls for smoother trade and “deeper cooperation” in critical areas.
• The joint statement released on the first day of PM’s visit, also mentions the ambitious MoU signed between the two states on the Semiconductor Supply Chain and Innovation Partnership, which includes a combined investment valued at $2.75 billion.
• On the telecommunications front, the two leaders launched two Joint Task Forces to focus on the Open RAN network and research and development in 5G/6G technologies.
• Besides, the two countries are bullish on future tech such as AI and Quantum Computing, having put in place the Quantum Coordination Mechanism and a joint fund for the commercialization of Artificial Intelligence

What taxation measures has the CCIA raised concerns about?

• One of the taxation tools that U.S. tech firms have long taken exception to is the expanded version of the “equalisation levy” that India charges on digital services.
• India in 2016, with the goal of “equalising the playing field” between resident service suppliers and non-resident suppliers of digital services imposed a unilateral measure to levy a 6% tax on specific services received or receivable by a non-resident not having a permanent establishment in India, from a resident in India who carries out business.
• In 2020, the Centre came out with the ‘Equalisation Levy 2.0’, which imposes a 2% tax on gross revenues received by a non-resident “e-commerce operator” from the provision of ‘e-commerce supply or service’ to Indian residents or non-resident companies having a permanent establishment in India.
• The equalisation levy, when it was first introduced in 2016, led to double taxation and further complicated the taxation framework. Besides, it also raised questions of constitutional validity and compliance with international obligations.
• The 2020 amendment again led the levy to become sweeping and vague in its scope. Further, in 2021, instead of introducing an amendment, the government issued a “clarification” to say that the expression ‘e-commerce supply or service’, inter alia, includes the online sale of goods or the online provision of services or facilitation of the online sale of goods or provision of services.
• The CCIA argues that the government decided to put the levies in place and continue their imposition unilaterally even as 135 other countries await clarity on an Organisation of Economic Cooperation and Development (OECD) agreement to overhaul the global tax system. This deal would ask countries to remove all digital services tax and other similar measures and to commit to not introduce such measures in the future.

What about India’s IT Rules 2021?

• The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, has been flagged by the consortium of foreign tech firms under the some of the most “problematic policies”.
• The IT Rules place compliance burden on social media intermediaries (SMIs) and platforms with five million registered users or more, which means several U.S. firms end up falling under the ambit.
• Some points of concern raised are the “impractical compliance deadlines and content take-down” protocols — the IT Rules require intermediaries to take down content within 24 hours upon receiving a government or court order. The platforms are also required to appoint a local compliance officer.
• Moreover, with the amendments made to the Rules late last year, SMIs are now obligated to remove, within 72 hours, information or a communication link in relation to the six stipulated prohibited categories of content as and when a complaint arises.
• There is also major criticism against the government’s institution of the three-member Grievance Appellate Committees (GAC), which will hear user complaints about the decisions of SMIs regarding their content-related issues and have the power to reverse those decisions.
• Additionally, in January 2023, the Ministry of Electronics and IT (MeitY) added another layer of compliance, requiring platforms to make reasonable efforts to prevent the publication of content fact-checked as fake or false by the Press Information Bureau (PIB).

What are the criticisms of the new draft of the data protection law?

• India, with more than 759 million active internet users representing more than 50% of its population is a gold mine for data.
• The country is also planning to become a hub for data processing, wanting to host data centres and cloud service providers.
• This means that India’s policy on the flow of data across borders will impact the same on a global level, as was seen with the European Union’s landmark General Data Protection Regulation (GDPR).
• While there are various arguments in favour of data localisation requirements by governments, such requirements also tend to significantly increase operating costs of companies and can be seen as discriminatory by foreign companies.

4. SUGAR SUBSIDIES AT WTO

TAG: GS 3: ECONOMY

THE CONTEXT: India is expected to negotiate with Brazil to resolve a long-standing dispute about sugar subsidies accorded by India. Brazil had submitted a complaint in 2019.

EXPLANATION:

• Ministry of Commerce and Industry is coordinating with the concerned departments to arrive at possible alternatives. The same approach has been adopted with other complainants in the dispute.
• Back in 2019, the South American nation had submitted a complaint against India alleging that the latter’s according of sugar subsidies was inconsistent with global trade rules.
• In February 2019, Brazil, Australia and Guatemala sought consultations with India, concerned about domestic support measures to agricultural producers of sugarcane and sugar.
• They alleged that India for five years, from 2014-15 to 2018-19, provided domestic support in excess of the permissible 10% of the total value of production thus, inconsistent with the norms laid out under the organisation’s Agreement on Agriculture.
• The countries argued that the minimum prices of sugarcane and sugar, specifically fair and remunerative prices (FRP) alongside specific states enforcing higher minimum prices, incentivised Indian sugarcane farmers. This led to increased domestic production of sugarcane and sugar.
• It contended that with production exceeding domestic demand, and ensuing increases in sugar stocks, the government also intervened in the market with assistance programmes, thereby facilitating lowered prices for the commodity in the global market.
• The complainant also argued against India’s mill-specific Minimum Indicative Export Quota (MIEQ) wherein sugar mills must export an allocated amount of sugar by the end of each season (October-September).
• It alleged that certain support measures were dependent on compliance with the MIEQ, or otherwise dependent on export performance. MIEQ allocates the minimum quantity of sugar which must be exported and distributes that quantity among individual sugar mills operating in India.
• India is the second-largest producer of sugar in the world behind Brazil, which also is the largest exporter.
• WTO constituted a panel to study the allegations in October 2019, which submitted its report in December 2021.

What did the WTO conclude?  

• The multilateral trade organisation held that India was acting inconsistently with its obligations under Article 7.2 (b) of the Agreements on Agriculture (AoA) as far the domestic support was concerned. This article stipulates that members cannot provide support in excess of the relevant de minimis standards.
• It held that the ‘price support’ would entail “assistance from a government or other official body in maintaining prices at a certain level regardless of supply or demand.” In FRP, while the prices may appear to be paid by the mills, they are set by the government, it said.
• The WTO asked India to withdraw its exports subsidies within 120 days from the circulation of the report. It also sought that the country withdraw the proscribed subsidies (as per the multilateral organisation’s rules) meant for production assistance, buffer stock, marketing and transportation along with the duty-free import authorisation (DFIA) scheme.
• The report concluded that India was providing “lump sum assistance” for expenses emanating on account of sugar towards maximum admissible export quality or MAEQ (which works as a marketing assistance listing upper limit for exports) of sugar mills for the sugar season 2019-20. It broadly covered marketing including handling, quality upgradation, debagging and re-bagging and other processing costs.

What was India’s defence?  

• Following the report in December 2021, the Indian government stated the panel had made “certain erroneous findings” about the schemes meant to support sugarcane producers and exports. It held the findings of the panel were “completely unacceptable to India”, adding, “The panel’s findings are unreasoned and not supported by the WTO rules.
• It contended that FRP and state-advised prices do not constitute ‘applied administrative prices’, that is, prices for agricultural products determined by administrative actions of the government and not market forces.
• It was before the consultations that India had argued that market price support could only exist when the government or its agents pay or procure the product. Thus, it would be incorrect to conclude that India provided any market price support to sugarcane producers, it said.

Agreements on Agriculture (AoA)

• The domestic support systems in agriculture are governed by the Agreement on Agriculture (AoA), which entered into force in 1995 and was negotiated during the Uruguay Round (1986-1994).
• The long-term goal of the AoA is to establish a fair and market-oriented agricultural trading system and to initiate a reform process through the negotiations of commitments on support and protection, and through the establishment of strengthened and more operationally effective rules and discipline.

5. MINERALS SECURITY PARTNERSHIP

TAG: PRELIMS PERSPECTIVE

THE CONTEXT: India joins the critical minerals club. India’s inclusion in the partnership will help its transition to clean energy & pave way for other countries to be part of the critical minerals club.

EXPLANATION:

• India became a part of the coveted critical minerals club the Mineral Security Partnership (MSP) headed by the United States.
• MSP is a strategic grouping of 13 member states including Australia, Canada, Finland, France, Germany, Japan, the Republic of Korea, Sweden, the United Kingdom, US, the European Union, Italy and now India.
• It aims to catalyse public and private investment in critical mineral supply chains globally.
• The proposal to onboard India comes after strong diplomatic engagements and push for joining the strategic partnership to secure and build a resilient supply chain for critical minerals.
• India is already a member of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, which supports the advancement of good mining governance.
• India’s inclusion in the club is vital for India to fulfill its ambition of shifting towards sustainable mobility through large, reliable fleets of electric public and private transport. Securing the supply chain of critical minerals will also provide the country with the necessary push towards a concerted indigenous electronics and semiconductor manufacturing.
• The inclusion will also pave the way for equitable sharing of resources across the globe. The MSP is elitist in its very idea of formation and induction of members. Countries like Indonesia, Vietnam, the Democratic Republic of Congo, which have abundant reserves of critical minerals are not part of this strategic grouping formed by US.
• The diplomatic strength India possesses can create space for other countries to be part of the partnership and reduce their dependence on China by building a robust and reliable supply chain of raw materials needed for the clean energy transition, something that many economies across the world have been hoping for.
• With heavy demand and the supply chain irregularities across the global mineral markets, various strategic groupings or international agreements have been started by major players to foster international partnerships, and to ensure a reliable and secure supply chain. Due to geopolitical uncertainties, unfavourable rising of prices, COVID-19 pandemic and the ongoing Russia-Ukraine war have resulted in the supply chain disruptions across the globe for these critical minerals.
• Over the past decade, the G7 and G20 member countries, including US, UK, EU, Canada and Australia have declared their critical minerals lists and are also the part of several bilateral, plurilateral and multilateral agreements, specifically for the governance involving critical minerals and their strategic importance.
• Cobalt, graphite, lithium, manganese, nickel and rare earth elements are these common strategic mineral resources that are demand-intensive due to their strategic uses in wind turbines, batteries of electric vehicles and other critical emerging technologies for green transition.
• Recently, the US and the UK signed the Atlantic Declaration to begin negotiations on a critical minerals agreement, which would allow some UK firms to access tax credits available under the US Inflation Reduction Act.
• With India pushing for an indigenous development of emerging technologies in the clean energy sector, scaling up the manufacturing of the technologies, including solar panels, wind turbines, batteries and electric vehicles will result in significant demand for and dependence on the supply of a range of minerals for the foreseeable future.
• India and Australia have already signed the Critical Minerals Investment Partnership — a major milestone in working towards investment in critical minerals projects to develop supply chains between the two countries.
• Investments under the partnership will seek to build new supply chains underpinned by critical minerals processed in Australia that will help India’s plans to lower emissions from its electricity network and become a global manufacturing hub, including for electric vehicles.
• India’s entry into MSP will foster several bilateral, plurilateral and multilateral agreements, specifically for the governance involving critical minerals and their strategic importance among the member countries.

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