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Great Lakes Commons Trust and Community Bank: A Scenario

Great Lakes Commons Gathering

Notre Dame University

September 30 - October 2, 2012

James B. Quilligan

This proposal is for consideration and discussion only. Its realization would involve input, modification and agreement from the widest possible number of stakeholders. 


Managing Transboundary Commons 

Bioregional trusts are an emerging horizon in environmental sustainability and financial stability for the people of a common resource area. Since governments and corporations were not created to manage ecosystems, it’s not surprising that their attempts to do so are often unsuccessful. What is generally missing is the input of the people who use these commons. They have the unique expertise, cultural understanding and long-term incentives for effective resource supervision. This is why local and regional participation in the care and allocation of transboundary commons is now becoming a crucial factor in international decisions on the governance of large ecological areas.

The purpose of a bioregional trust is to safeguard a resource for future generations. Just as some communities across the world have become adept at preserving, creating and replenishing their local commons, bioregional trusts can also apply the principles of subsidiarity, polycentricity and inclusive decision-making to the protection and production of resources that are shared on a broader scale. Integrative commons management contributes not only to a clean and healthy biological environment, but also to people’s social well-being. In addition, a bioregional trust may generate funds which could be used for ecological restoration as well as a basic income for the people of a region. In brief, here is how a transboundary commons model could be applied to the water and coastal management of the Great Lakes area of Canada and the United States.

I. Great Lakes Social Charter

A group of people with an interest in the Great Lakes ecosystem begins by discussing inclusive principles for resource management. They decide to create a social charter, which identifies the ecosystems of the Great Lakes and how people can take responsibility for them. The charter includes:

A. Vision and Mission Statement

• an affirmation of the meaning of sustainability for the Great Lakes

B. Historical Claims

• a description of the current users, natural boundaries, legal jurisdictions and political control of the bioregion

• a review of what is working and what isn’t

• a summary of traditional or emerging claims to legitimacy and responsibility for preserving the ecosystem

• a notice of claims for the re-territorialization of accountability structures within the bioregion

C. Rights to Fair Access and Use

• a declaration of the users’ rights to organize and participate in the development of new institutions and rules for the ecosystem

• a statement of the entitlements and responsibilities of users, managers, and producers of the ecosystem

• a statement of shared benefits, quality standards and safeguards

• a code of ethics and common values

• a framework for democratic decision-making and participation

D. Plan for Resource Management & By-Laws

• an inventory of regional economic resources and possible additional participants, stakeholders, and business and government partners

• a means for matching the rules of provision and appropriation of resources to local conditions

• a set of by-laws for a Trust, covering goals, management, operations, due process, conflict resolution and financial, legal and accounting activities

• a set of criteria for qualifying candidates in trustee roles

• a method of appointing and designating responsibilities for trustees

• a process for monitoring and evaluating the work of a Trust


II. Great Lakes Commons Trust

The social charter establishes the Great Lakes Commons Trust. The Trust is a legal and fiduciary organization, managed by its members and trustees, with the purpose of ensuring the long-term sustainability of the Great Lakes watershed. As set forth in the by-laws, participation in voting is extended to all members and trustees. The number of trustees, their terms and appointments are decided by the members. This is not a cooperative ownership structure, where a small group of trustees make the ultimate decisions like private owners. Bioregional trusteeship is a bottom-up process which emphasizes broad public involvement, pluralism, checks and balances and multi-perspective decision-making. The Trust initiates:

A. New Methods and Metrics

• a court petition granting legal standing to the Great Lakes Bioregion

• governmental agreements through which commercial licensing and regulatory rights to the ecosystem are turned over to the Trust as tangible assets

• a differential rate which delineates how much of a particular resource is available for current use in relation to how much to set aside for the future

• a cap placed on the access, impact, extraction and use of ecosystem products and services, indicating how much the withdrawal rates of these resources must be slowed to allow for their replenishment

B. Sustainable Caps

• transfer of authority (from Provinces and States to the Trust) on the present catch limits of fisheries, creating a precedent for further caps

• development of caps for other segments of the Great Lakes ecosystem:

• access to beaches

• boating

• tourism and recreation

• shoreline erosion

• coastal wildlife and wetlands

• interaction effects with rivers, including flooding

• industrial uses of water

• industrial dumping

• pollutants such as fertilizers, chemicals and oil leaks

• carbon dioxide emissions from cargo ships

• commercial transportation

• port usage and dredging

C. New Partnerships with Business and Government

• a designated proportion of resources protected under each cap may be rented by the Trust to the private sector or to state businesses and utilities

• a business extracts, produces or uses the resource and pays rent to the Trust, a portion of which is taxed by Provincial and State governments

• governments may use the tax as a social dividend for their citizens

• the Trust uses the rent to manage and restore the depleted resources, which may include:

• maintaining fish stocks

• providing water pollution controls, monitoring and remediation

• ensuring public access to beaches

• controlling floods and shoreline erosion

• managing coastal restoration, preservation and adaptation

• protecting wildlife, wetlands and conjoining rivers

• developing offshore wind energy

III. Great Lakes Community Bank

The US National Oceanic and Atmospheric Administration indicates that the Great Lakes bioregion, directly or indirectly, generates over $13 billion in economic benefits each year. This is why the rejuvenation and renewal of the Great Lakes ecosystem is not only an environmental necessity but a practical investment opportunity. To expand its rehabilitative capacities and scope for the safekeeping of this ecological resource area and to encourage citizens to invest directly in a healthier environment, the Trust may develop a financing arm -- a Great Lakes Community Bank. This Bank is established for all citizens in the bioregion, using the sustainability of the various assets of the Great Lakes ecosystem as equity. All members of the Trust would make decisions on both the Trust and the Bank, including:

A. Income Sources

• different means of capitalizing the Trust and the Bank, namely

• financing of the Trust through rental charges (including permit review, user, project and access fees) which are paid by business and consumers for various products or services derived from the Great Lakes watershed

• and financing of the Bank by individual, commercial and municipal investors through bank deposits and purchase of environmental bonds, or through joint investments with businesses or governmental agencies

B. Great Lakes Community Eco-Bonds

• issued by the Bank for the supervision, preservation and restoration of the Great Lakes ecosystem, generating revenues for:

• shoreline and marine restoration projects

• commercial and recreational fisheries

• beach and shoreline access

• boating, tourism and recreation

• protection of coastal wildlife, wetlands and conjoining rivers

• clean water production

• alternative energy

• eco-sustainable products

• information technologies

• the valuation of Eco-Bonds based on (1) the tangible assets of the Trust, and (2) equity in the ecological maintenance projects of the Bank

• preservation and restoration projects of the Bank undertaken through joint ventures with businesses or local governments

• a representative from each joint venture as an equal partner with members and trustees, voting on all activities, investments, staffing and activities of the Bank

• an agreement with each joint venture partner to contribute 50% of its profits to the Bank (the remaining 50% used for reinvestment in the joint venture, dividends for investors, or profits)

C. Bank Location and Management

• bank branches open to citizens throughout the Great Lakes bioregion

• election of bank managers by members and trustees

• a regular assessment of the activities, profitability, accounting and legal systems reported to both the Bank and the Trust by bank managers

• a requirement for term limits on bank managers to prevent corruption

D. Reporting and Accounting

• quarterly reports to members, trustees, depositors, investors and partners

• clear and transparent measures of ecological sustainability and social well-being by the Trust, and financial contributions, investments and disbursements through the Bank

• operations of the Trust and Bank reviewed internally by their accounting and legal departments, as well as outside professional firms

IV. New Canada-United States Treaty

At present, Great Lakes treaties between Canada and the United States are focused more on border protection than on the long-term ecological health of the watershed. The two governments would thus have to develop new treaties for the creation of a Great Lakes Commons Trust and a Great Lakes Community Bank. Why should they find this to their advantage?

A. Transboundary Precedents

• the 1978 Water Quality Agreement and the 1985 Great Lakes Charter between Canada and the US are outdated and need to be amended

• Canada and the US have had successful experience with a common trusteeship for the mitigation of oil spills along the Pacific coast

• numerous transboundary water agreements through international commissions and trust funds have been highly effective, including Indus Waters Treaty; Ramsar Convention on Wetlands; Israel-Jordan Water Agreement; Senegal River Basin Development Authority; Mekong River Commission; Okavango River Basin Commission; Nile Basin Initiative

B. Advantages of Subsidiarity and Mutual Currency

• local communities and regional associations are often better equipped at ecosystem strategy and leadership than government agencies

• bringing community activists and skilled citizens into the supervisory process would improve water resource management and allow governments to cut costs and focus on other tasks

• a Great Lakes Bioregion Opportunity Zone may be created which waives currency exchange rate differences through the Bank, greatly increasing cross-border investment, business development, employment, property values, tax revenue, tourism and technology innovation around the region

V. For Further Discussion and Synopsis

Many questions and issues are not addressed here, such as initial costs, funding, key partners and geographical and political challenges. The aim has been to show briefly how a social charter, commons trust and community bank could lead to a sustainable Great Lakes bioregion for future generations. Integrative resource management would also result in cleaner water and air quality, greater health and well-being, and increased financial stability and security for the current generation of people in the region, as well as those who enjoy or depend upon its resources from outside the area.

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