Nonprofit Lawyers: It’s not an Oxymoron, It’s ELAW

ELAWlawyersBy Sunny Lewis

EUGENE, Oregon, October 19, 2015 (Maximpact News) – The nonprofit Environmental Law Alliance Worldwide (ELAW) is the go-to organization for 300+ lawyers in more than 70 countries who act as environmental defenders.

Based in an historic house in downtown Eugene, the ELAW Secretariat helps its partners around the world gain skills and build strong organizations of their own that will work to protect the environment for years to come.

ELAW Executive Director Bern Johnson says, “Our work is better known in Jakarta or Mexico City or New Delhi than it is in Eugene.”

Since 10 lawyers started ELAW in 1989, the organization has offered the legal tools to help associates strengthen existing environmental laws, bring enforcement actions, critique proposed statutes, and replicate model laws.

These advocates rely on ELAW staff scientists to critique plans for proposed developments, develop systems to monitor environmental conditions, provide expert testimony, and recommend cleaner alternatives.

ELAW has hosted more than 100 lawyers for fellowships. They come to Eugene to gain language skills, tap legal and scientific resources, work closely with ELAW staff, and learn from U.S. efforts to protect communities and the environment.

Funded by donations from foundations and private citizens, ELAW has a budget for helping lawyers challenging injustice, who often face serious legal or other consequences for their advocacy.

 

IndiaPollutedRiver

Clearing India’s Ganges River of Industrial Polluters

For 30 years, ELAW partners in India, led by the pioneering Goldman Prize winner M.C. Mehta, have fought to clean up the Ganges River. Contamination in the Ganges far exceeds World Health Organization standards.

A case that began in 2013 when ELAW partners Rahul Choudhary and Ritwick Dutta filed a suit in the National Green Tribunal (NGT) against a single polluter in the town of Simbhaoli has mushroomed into a case against some 1,000 industrial polluters along the Ganges River in five states.

Last fall, the Supreme Court gave the NGT exclusive jurisdiction to clean up the Ganges, and the NGT responded by sending teams of inspectors to investigate each polluting industry.

ELAW Staff Scientist Mark Chernaik is reviewing inspection reports and helping partners identify which polluters are violating the law and harming the Ganges.

This approach is yielding results. More than 60 industries that had been operating without wastewater pollution controls have been closed, including dozens of tanneries in the notorious Jajmau industrial district of Kanpur.

Read a report from ELAW on Cleaning up the Ganges.

 

UkraineDam

Ukraine’s Rivers Dammed to Trickles

Remote rivers in Ukraine’s Carpathian Mountains are among the world’s most beautiful, but ELAW advocates allege that “corrupt investors” are “installing small hydropower projects that are reducing rivers to a trickle, stranding fish.”

More than 300 small hydropower projects are proposed for the region.

ELAW Staff Scientist Heidi Weiskel traveled to Verkhovyna in the Ivano-Frakivsk region in August to help Ukrainian partners protect the rivers.

Joining her were staff scientist Petro Testov and staff attorneys Marta Pankevych and Nataliia Kuts from ELAW’s partner organization, Environment-People-Law.

“What we saw was devastating,” Weiskel exclaimed. “Dams and pipes were siphoning most of the water out of rivers, leaving small fish ladders so poorly constructed that fish had no chance of survival. Sediment-filled water dumped by powerhouses compromised water quality for hundreds of meters downstream.”

The Carpathians are being destroyed, she says. “In the wake of the new roads servicing the dams and powerhouses, we saw illegal logging, fragmented landscapes, and the disruption of natural migration for many species.”

At a September 7 roundtable in the Ukrainian city of Lviv, Environment-People-Law Executive Director Olena Kravchenko called for a moratorium on small hydropower “until the government, investors, and developers can meet strict criteria to protect the viability of this watershed.”

Globally, water pollution is getting worse as the population grows.

The United Nations says 80 percent of all sewage in developing countries is discharged untreated into waterways. There is the legacy pollution of abandoned mines and drill sites, and polluting industries, such as leather and chemicals, seek to set up shop in emerging economies.

Read the UN report “Sick Waters? – The Central Role of Wastewater Management in Sustainable Development”

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Safeguarding Guatemala’s Clean Water

The Motagua River flows from Guatemala’s Western Highlands, gathering the waters of 29 other rivers as it runs to the Gulf of Honduras. But today it does not flow as cleanly as it has for centuries.

“Tons of domestic and industrial waste, untreated effluent, and sewage from urban and rural communities go right into the river,” says ELAW Staff Scientist Meche Lu who toured the Motagua this summer. “The neglect and level of contamination is appalling.”

In Guatemala, an ELAW staff scientist is working with the Guatemalan organization Environmental and Water Law Alliance to raise awareness about Motagua River pollution and engage citizens and government authorities in conservation

“Cleaning up the Motagua is not just about protecting nature, it’s about giving local people dignity,” says Lu.

PeruOilCommunityMeeting

De-Oiling Peruvian Rivers

Since 2002 ELAW has helped advocates in Peru protect indigenous communities and rivers of the Peruvian Amazon – the Corrientes, the Tigre, the Pastaza, and the Marañón rivers – from toxic oil industry pollution.

In the early 1970s, multinational oil companies, such as Oxy and PlusPetrol, began drilling for oil in these watersheds. Many pipelines have ruptured and the companies have released contaminated by-products into the water.

The contamination has harmed Quechuea, Achuar, and Cocama Cocamilla indigenous communities, who rely on these rivers for clean water and fish.

The contamination in the four river basins has become so severe that Peruvian authorities declared an environmental emergency in September 2013.

Lu has been helping the indigenous federations in collaboration with PUINAMUDT, an umbrella organization formally named Observatorio Petrolero de la Amazonia Norte.

She has interpreted dozens of water quality reports containing evidence of how the Corrientes, Tigre, Pastaza, and Marañón rivers have been harmed by oil and gas activities and presented this evidence at workshops with community leaders and government representatives.

In April, after lengthy debate, the Peruvian Congress set aside US$50 million to clean up contamination in these watersheds and plan to prevent and respond to future spills.

Now Lu is helping ELAW’s Peruvian partners design and implement a health and toxicology assessment of the affected communities.

ACC cement

Fuming Over Coal in Egypt’s Cement Industry

Egyptians are concerned that without citizen input their government is moving to allow multinational cement corporations to switch from clean burning gas to polluting coal-fired kilns.

The cement companies are facing lack of access to a reliable natural gas supply. The switch saves corporate dollars but threatens public health.

“Natural gas-fired cement plants do not emit any particulate matter or sulfur dioxide,” says ELAW Staff Scientist Chernaik. “By switching to coal, the plants will emit twice as much CO2 [carbon dioxide], and add particulates and SO2 [sulphur dioxide] on top.”

ELAW partners at the Habi Center for Environmental Rights say the plans by Lafarge and Suez Cement “violate the environmental rights of citizens, especially their right to health, healthy clean environment, right to information and participation.”

Habi and eight local organizations are demanding that the companies make public the environmental impacts of switching to coal.

Lafarge is experimenting with municipal waste as a fuel. There’s no access problem. Cairo produces 15,000 tons of municipal waste each day, while the El Sokhna Lafarge plant uses just 15-20 tons a day.

To ensure quality and regularity of supply, Lafarge involved the Zabbaleen, the local informal network who have sorted and resold Cairo’s recyclable waste for the past 80 years. A team of Zabbaleen people was hired and trained to collect, treat and recycle waste for Lafarge Egypt.

Meanwhile, Egypt’s Environment Minister Khaled Fahmy agreed this month to assess the environmental impact of seven out of 19 cement companies that have conducted studies to use coal as an alternative source of energy.


Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.

Featured image: ELAW Logo
Header image: ELAW lawyers, partner advocates, scientists and staff at the 2015 ELAW Annual International Meeting, Yachats, Oregon, March 2015.  (Photo courtesy ELAW)
Image 01: Waterway in the Jajmau industrial district of Kanpur, India. (Photo by Mark Chernaik courtesy ELAW)
Image 02: One of the small hydropower dams being built in Ukraine’s Carpathian Mountains (Photo courtesy ELAW)
Image 03: Children Washing Hands at School Handwashing Station in Pahuit, Guatemala photo by Cecilia Snyder photo courtesy Flicker – Water For People/Nancy Haws
Image 05:  Egyptian cement bags courtesy PEi

 

How corruption kills the promise of social enterprise—and drives extremist violence

492795977By Marta Maretich @maximpactdotcom

Corruption is bad for business. It damages the global marketplace by siphoning away profit and hijacking capital that could otherwise be used to build enterprises and increase prosperity.

This shouldn’t be news to anyone. Nobody, apart from the profiteers, likes corruption. But now evidence is emerging that corruption is even worse, and more dangerous, than we thought.

In her new book, Thieves of State, journalist, social entrepreneur and anti-corruption activist Sarah Chayes takes the case against corruption into new territory. She argues that, not only is corruption bad for the marketplace, it actually generates violent extremism and poses a direct threat to global security.

Drawing on her first-hand experience of founding and operating the social enterprise Arghand in Afghanistan for almost a decade, Chayes demonstrates how extremism arises as a reaction to corruption. And she makes a forceful case for dealing with systemic corruption as a way of strengthening global security and creating a climate where economic development can make a difference to people’s lives.

Old as sin

We’ve known for a long time—perhaps since markets were invented—that practices such as fraud, bribery, extortion and embezzlement poison the business environment and corrode economies from within.

And, if corruption is toxic to mainstream business, it is twice as deadly for businesses with a social or environmental mission, as we argued in a recent blog:

Corruption strikes simultaneously at both of impact investing’s stated aims: profit and benefit. … Sustainable, socially beneficial businesses are unlikely to thrive in corrupt contexts. Investors who put money into them run risks they may not initially see or understand… Impact measurement and reporting, too, can be tainted by corruption. Read more…

Worse than ever

Dirty dealing has always been with us, but over the last two decades globalization of business and the financial markets have highlighted both the prevalence of corruption in many parts of the world and its ill effects. Huge multinational corporations, finance institutions, international aid bodies and accountable governments have all fallen prey to corrupt practices when dealing with countries where kleptocracy—the rule of thieves—is a feature of civic life.

Some of these victims, like the Norwegian government with their Norad program, have fought back. Yet many have accepted corruption as a cost of doing business, effectively colluding with the criminals. And, while some governments, like China, make a show of stopping corruption among their own leaders, others, such as Afghanistan and Nigeria, facilitate theft on a stunning scale. At the same time, tax havens shelter wealth that is known to be stolen and rich economies allow thieves to invest —and effectively launder—ill-gotten loot in property and other assets.

Anti-corruption takes on more urgency

The global reaction to corruption has so far been mixed and to a large extent uncoordinated. Yet a global anti-corruption movement has been gathering momentum.

Since 1993, Transparency International has amassed an extensive pool of data on global corruption. Global Witness has launched a number of successful anti-corruption campaigns and is now leading the charge to ban anonymous companies.  Largely because of their work, corruption is going mainstream, with a number of anti-corruption topics on the agenda at the WEF at Davos this year.

Chayes’ book adds to the literature on corruption and brings a new urgency to the conversation. Using a readable mix of memoir, history and analysis, she bears witness to the way corruption undermined efforts to bring peace and prosperity to Afghanistan.

While leading her social enterprise and living among ordinary Afghans, Chayes shared their fury when police demanded bribes and government officials refused to do their jobs without payoffs. As corruption steadily increased under the rule of Hamid Karzai, she watched levels of violence rise apace, often directed against the military occupiers and civilian agencies like the police who were seen as the protectors and enforcers of a corrupt government.

Sarah Chayes founded the social enterprise Arghand in Afghanistan with high hopes.

Sarah Chayes founded the social enterprise Arghand in Afghanistan with high hopes.

In her role as special advisor to a series of ISAF military commanders, Chayes did her best to drive home the link between corruption and violence, with limited success. Meanwhile, she watched the hopes that drove her to establish her social enterprise—the promise of a better life for Afghans—slip away as Afghan society became crippled by violence.

Chayes’ experience makes a powerful case for re-evaluating the way international development agencies, businesses and governments interact with countries like Afghanistan—and this has deep implications for the social investing sector.

For social investors, including aid and development agencies, it demonstrates the danger of unwittingly putting resources behind programs and enterprises controlled by kleptocrats and kleptocratic regimes. Not only does this amount to pouring good money into a bad system, Chayes argues, it makes well-meaning institutions look like they support corruption and its oppressive effects on local people. In brief, it makes them part of the problem rather than part of the solution.

Time for social investors to think again

So what can we do about corruption? Chayes offers a range of remedies including improving intelligence, using diplomatic levers against kleptocratic regimes, and putting in place measures that keep state thieves from buying clean assets in developed countries.

Her suggestions for aid agencies give an idea of what can be done by social investors. Aid agencies (and, by implication, social investors focused on development) need to actively collect information about corruption in the countries where they work, listening to the voices of ordinary people, not just those of plausible intermediaries who often turn out to be kleptocrats. They need to improve contracts, increasing accountability for how their money is used. Finally, they need to establish independent monitoring and evaluation stystems, tracking impacts and chasing any irregularities that arise.

For far too many people around the world, systemic corruption is a daily part of life—and a daily insult that can, as Chayes argues, drive citizens to desperation and violence. The social investing sector should heed her warning and think again about our role in enabling corruption. Chayes is, after all, one of us: a social entrepreneur who devoted a good chunk of her life to helping people through building a business. Her experience holds important lessons for us on how to be part of the solution to corruption—and avoid becoming part of the problem.

After Davos: Lessons for Impact and Social Investors from the WEF 2015

By Marta Maretich @maximpactdotcom

Aerial photograph of Davos, Switzerland

Davos: Returning to normal after WEF15 but what will the forum mean for us?

The World Economic Forum has been and gone, leaving the Davos snow more than a little trampled. Now that 2500+ of the world’s most powerful people have flown home in somewhat fewer (it seems) than 1700 private jets, what do we know about what’s coming in 2015? And, more specifically, what lessons did the Forum hold for impact and social investors?

Impact and social investing are part of the global economic reality, so the larger trends identified at Davos will be felt in our sector, too. Quantitative easing in the Eurozone, the unpredictable fallout from the Grexit, the slowdown in growth in China and India, its surge in the US, will all shape the world economic outlook for 2015 and will inevitably have their effects on the social sphere. And yet it was interesting to notice certain issues — some our own favorite topics — were more prominent on the agenda than they have been in previous years.

Climate Change

The financial crisis pushed climate change off the agenda; the presence of Gore as the opening act at Davos seems to indicate that it’s now back on. The ex-US Vice President (and his musical friend Pharrell Williams) were on hand to drive home, once again, the message that we need to act fast to avert disaster. This can’t have been news to the delegates at Davos, all of whom have heard Gore’s arguments before and yet have presided over the increase in the use of fossil fuels we’ve seen in recent years.

Among those in the know, real indicator that things are changing was the advocacy of Lord Stern, Tony Blair’s climate change adviser.  At Davos, he argued cogently that fossil fuel is not, as it long appeared, cheap anymore, and that alternatives are now getting cheaper. Governments don’t have to make a tradeoff between growth and preventing climate change, he said, and his argument seems to be gaining traction in the world of business. It’s one that impact and sustainable investors have long understood, of course, but the mainstreaming of sustainability should bring new opportunities for impact investors and climate-friendly social enterprises alike, especially when it comes to collaborating with business and government.

Alternative energy

Related to the issue of climate change is that of energy, another hot topic at Davos. The energy landscape is changing, partly because of the wider acceptance of the reality of climate change, but also because alternative energy sources are coming into their own. A plunge in oil prices, due in large part to the availability of cheap gas from fracking, is driving oil-producing nations to re-examine their strategies, diversify their activities and rethink their future. It’s also fanning the flames of the divestiture movement, which is gaining ground as the value of fossil fuel stocks, for so long the central pillars of many portfolios, continues to fall.

For impact and social investors, this shift in focus will help in two ways. First, the exit of capital from fossil fuels could spur a renewed wave of investment in existing forms of alternative energy such as wind, solar and hydrogen, and in energy efficient technologies, all areas where impact investing has a track record. Second, turning away from fossil fuels will require more investment into developing new alternative sources of energy. Investment in energy R&D and in companies rolling out alternative energy solutions to new markets will be attractive opportunities for social investors.

Inequality

The specter of Thomas Piketty was found haunting many of the sessions at Davos. The French economist’s landmark tome, Capital in the 21st Century, has sparked wide-ranging debate about the nature and role of capital in our times. One of its impacts is to highlight the growing problem of wealth inequality, an important theme threading through many discussions at WEF15.

The Economist explains Piketty in four paragraphs

Different delegates working in different contexts and sectors interpreted inequality in a number of ways. Piketty is mainly concerned with the current dynamic that sees wealth in societies moving inexorably in one direction—upwards—and accumulating in the hands of fewer and fewer people at the top (such as those attending the Davos conference, for instance). Other kinds of inequality, however, were on the agenda, including the disparity between rich and poor nations, and among different groups, for example women and marginalized groups, within societies.

For impact and social investors, investments aimed at reducing inequality of all kinds are already part of the landscape and can take a number of forms. Affordable loans for college students, edutech that brings learning to those who need it, and provision of healthcare for girls and women, are all examples of investments that can help reduce inequality. Technology also has a role to play. Sheryl Sandberg, when asked by Arianna Huffington, opined that more technology, specifically access to the internet, and, less specifically, “more data” would bring more equality to the world. Social investments that extend tech to the tech-poor are already on the cards, but more work, targeted specifically on easing inequality, is needed from our sector.

Corruption and crime

In a recent blog, we showed why the impact and social investing sector should be putting its weight behind the growing global movement to fight corruption.  At Davos, corruption and crime were prominent on the agenda, an indication that the movement is now hitting the mainstream thanks to the efforts of campaigners like Global Witness. The connection between corruption, poverty and the health of markets is becoming clearer, as is the role of the business community in tackling this scourge. These topics and others were addressed in number of sessions and an issue briefing at the WEF. Impact and social investors should keep abreast of how this discussion develops and, in keeping with their commitment to ethics, adopt anti-corruption strategies wherever possible.

Changes to the way the world invests

The delegates at Davos showed a new level of interest in the way capital markets are changing, and this has implications for the impact and social investing movements. This change-consciousness was evident in this year’s sessions, many of which acknowledged, in different ways, a new mood and attitude toward investing in  mainstream markets. Yet it can be seen most clearly in the future projects funded by the WEF for next year. Projects on accelerating capital markets in emerging economies and direct investment by institutional investors, for example, point to trends in the markets that could be important for impact investors. Meanwhile. Phase III of the Mainstreaming Impact project has been cleared to move forward, led by Abigail Noble. If the excellent work coming out of this project so far is any indication, this will give us even more data to work with and deepen our understanding of the developments in our own corner of the financial world.

An insight into the things to come?

The World Economic Forum provides a fascinating snapshot of the forces that shape our global economy and thus determine the fate of billions—billions of people, that is, not only dollars. It gives us a fleeting glimpse of the individuals making the decisions and the merest hint of how things will go in the year to come. For our emerging sector, it’s vital to tune in to the lessons of Davos and learn what we can, especially if our aim is to one day become the mainstream that Davos represents.

And yet, in another sense, Davos may be less relevant to us than it first appears. As a guage of the status quo—what is now—nothing compares to it. But as a guage of what will be, it falls short. Piketty reminds us all that economics is, after all, not a hard science like mathematics, but a social science with historical underpinnings. Looking at the past is very helpful for understanding the present, as he ably proves. However it doesn’t necessarily help us predict the future with perfect certainty. For many, Davos is already the past. The future, if committed impact and social investors have their way, could be very, very different.

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Why corruption is a problem for impact investors—and what we can do about it

Money in pocketBy Marta Maretich, Chief Editor @maximpactdotcom

“Corruption is a disaster for development. It wastes the resources that can build sustainable economies, guts confidence in government, and fuels inequality and conflict. So common sense dictates that massive global efforts to end poverty must find a way to fight corruption, or they will fail.”  —Dana Wilkins

So writes Dana Wilkins, an analyst for Global Witness, the anti-corruption campaigning organization, in her recent blog on the corrosive effect of corruption on global efforts to fight poverty. Her remarks highlight the problems corruption creates for development aid, but every word of it should set alarm bells ringing for impact investors, too.

Because, if corruption is a problem for the development aid sector, it’s twice the problem for impact investors. Here’s why:

Corruption strikes simultaneously at both of impact’s stated aims: profit and benefit. It cripples the growth of business and drains investor returns while it chokes off the possibility of creating social and environmental benefit. Sustainable, socially beneficial businesses are unlikely to thrive in corrupt contexts. Impact investors who put money into them run risks they may not initially see or understand, including reputational risks. Impact measurement and reporting, too, can be tainted by corruption, making it impossible to assess the real effects of an investment.

All this makes corruption fatal to the success of impact. Worse, by investing the wrong way, in the wrong places, investors could actually harm the communities they want to help.

Far from fostering economic development, careless investing actually makes corruption worse by propping up a sick system. As Wilkins told us during a recent conversation, “Investing blindly in corrupt contexts can exacerbate the political and economic conditions that undermine long-term development”. And, by pouring good money into corrupt systems, impact investors can come to be seen by local people as part of the problem rather than part of the solution.

Steering clear of rotten deals

So what can impact investors do to avoid getting caught in the corruption trap?

Due diligence is key, according to Wilkins, and should never be stinted on when making an investment. Careful due diligence processes that take account of corruption activity and provide insight into local conditions will help investors steer clear of rotten deals and find healthy ones. “Impact investments must be informed by due diligence and an in-depth understanding of the political economy of corruption in the country,” she told us.

This holds true for investments anywhere in the world, not only those in countries that are infamous for crooked dealing. Although many high profile corruption cases have come out of the developing world, like this one involving Nigeria, it’s important to remember corruption is a global scourge that taints developed economies, too.

Global Witness’s current campaign focuses on getting western economies, especially the US and the UK, to ban anonymous companies, the unaccountable entities often used to launder money stolen through corruption. And, as Global Witness founder Charmian Gooch points out in her award-winning TED talk, theft on such a massive scale is impossible without the collusion of reputable banks and multinationals.

For impact investors, this means taking a hard look at any investment before committing capital to it, regardless of the size, stature or location of the business. By making it a practice to look beneath the surface of deals—a thing all investors would be wise to do—they can choose investments knowledgeably and avoid putting money in the pockets of criminals.

Providing anti-corruption leadership

Avoiding bad deals is one thing, but what else can the impact sector do in the fight against corruption?

Driven by a dual commitment to good business and social and environmental benefit, our sector could (and should) take a leadership role in the anti-corruption movement. Establishing good governance and reporting practices across the impact investing industry will be key, but the first step is to embrace the principle of transparency, according to Wilkins.

“Impact investors should be 100% transparent about the way they do business and who they do business with,” she told us. “This can have a knock on impact of helping improve transparency and accountability more generally, and save investors being seen as complicit in the corruption that is bleeding so many developing countries dry.”

Beyond this, the sector can do more by supporting the work of anti-corruption campaigners like Global Witness and other groups, like Global Financial Integrity. Global Witness is now pushing for anti-corruption to be embedded in the UN’s Sustainable Development Goals, the post-2015 successor to MDGs, a move that could catalyze change across the development sector and give support to wider efforts to end corruption.

Joining the conversation about anti-corruption policy, like this one lead by the US government, is another way the sector can exert influence. Finally, supporting change from within industries through careful investment combined with vocal support for internal anti-corruption activists is another way to help. This will be crucial in industries where the instance of corruption is high—forestry, land, oil, and minerals top the list.

The world is sick of corruption. This survey of millions of people identified “honest and responsive government” as priority #4 out of 16; that means one free of graft, bribery, nepotism and fraud. And it implies a clean operating environment for business, too. The impact investing sector now has an opportunity to respond to this call for fair dealing and put its growing influence behind global efforts to bring change.

Read blogs by Dana Wilkins

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Impact Investing in the Justice Entrepreneurs

By Marta Maretich @maximpactdotcom

statue representing justice with scalesAgriculture, healthcare, cleantech and financial services are all now recognized sectors of impact investing with growing track records of success. Businesses from these sectors are frequently the choice of impact investors who want to put their money into related areas of social and environmental benefit such as poverty alleviation or natural resource protection.

But what about investors who are interested in causes such as fairness, the rule of law and universal access to justice? Surely, these aren’t areas where impact investors can place their capital, are they?

Now, thanks to a burgeoning trend for justice entrepreneurship, they just might be.

Once the only way for impact investors to support justice was indirectly, through careful ESG investment screening coupled with impact metrics to assess outcomes. Now thanks to the emergence of bold new approaches to delivering justice, impact investors have the opportunity to put capital behind businesses bringing cost-effective justice solutions to citizens and governments alike.

The justice shortage

Most of us assume that justice is a matter for governments or international bodies like the European Court of Human Rights. But, just as the state monopoly in education is giving way to a more entrepreneurial picture, things are be beginning to change in the justice sector. According to HiiL (The Hague Institute for the Internationalization of Law), a justice sector advisory and research institute, there are important drivers behind this shift.

In the developed world, the cost of delivering access to justice continues to grow while state budgets are contracting. In the US, the number of unrepresented defendants is increasing and more people are representing themselves in court, mainly for financial reasons. Basic legal services, like will writing and land conveyance, are also expensive—too expensive for many who need them.

This means that a growing number of people are unable to afford legal counsel or legal services, a situation that leaves them without basic legal safeguards. This shortfall comes with a high social cost, especially when it denies justice to the poorest and most vulnerable members of society. Governments are now actively looking for more cost-effective ways to deliver access to justice to their citizens.

In the developing world, the problem is even more serious, according to recent studies by the World Bank. Many communities are simply unable to get access to justice, even when their constitution guarantees it. They may live too far from courts and legal services to use them. In many countries, only money buys access to the formal legal system. In others, the justice system works so slowly, or is so corrupt, that it is no help to citizens.

All this means that there is large and growing global demand for justice services, both from citizens and from governments who want to ensure access. And where there is a demand, of course, there is a potential market. For impact investors, the question now is: Who is opening this new market and how do we engage with them?

Enter the justice innovators

The Innovating Justice Accelerator is an early entrant into the field of justice sector entrepreneurship. Responding to what it saw as an urgent need for solutions, HiiL established the intermediary body in 2010, providing a platform and network for justice innovators and sponsoring an annual innovation award.

For any impact investor with an interest in justice and the rule of law, their website is an eye-opener. It features a range of innovative ideas and programs to improve justice and the rule of law, some of them potentially investable and scalable:

  • Prison Paralegal Justice Centers is a program that helps prisoners become legal advisors within the prison system.
  • I Paid A Bribe is a web-based tool to decrease corruption and make it more visible by using a platform for reporting instances of paying or not paying a bribe.
  • Aahung, a reproductive rights organization in Pakistan, is producing a TV series with a commercial production house to spread its message in a financially sustainable way throughout the region.
  • Made in a Free World, an anti-slavery organization, created the Forced Labor Risk Assessment Tool a software program for businesses that exposes forced labor in global supply chains and helps companies eliminate slavery from the way they do business.
  • Rechtwijzer 2.0  is a justice platform developed by HiiL, offering legal information and advice to people in the Netherlands. It enables people to work on solving their legal problems in their own words, at their own pace, from their own homes with the support of legal professionals.

Democratizing access to justice

These examples provide a sense of where the global justice marketplace is heading, with digital approaches to delivery and remote support systems democratizing access to justice and making it more affordable for more people.

But there are still barriers. While digital delivery capabilities bring new possibilities, to be successful many of the new approaches require the cooperation of national governments; some require changes to regulation and law. Hiil, which campaigns in these areas, recognizes that bringing real change will take time.

Yet when you consider the potential benefits of a more innovative justice sector—universal access to justice, effective service delivery, reduced costs, and metrics resulting in a more robust rule of law throughout the world—opening the market seems the obvious thing for impact investors to do. In these early days, they are well positioned to play a key role in what could be the birth of an important new impact sector. Watch this space.

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