There is an increased focus on reducing the carbon impact of human activity, along with conservation efforts that improve carbon capture on every continent. Yet, more than 70 percent of the earth's surface is covered in water, which raises a question: What more can be done to protect our oceans?

A White & Case team offered one answer through its 2023 work with longtime pro bono partner Conservation International to design a debt-for-nature swap, which will preserve hundreds of square miles of coral reefs in waters off a Southeast Asian country in exchange for cancelling a portion of that country's debt. The deal is believed to be among the first to protect coral reefs under the recently reauthorized US Tropical Forest and Coral Reef Conservation Act (TFCCA). The act enables countries to relieve debt obligations to the US government in exchange for the commitment to protect critical natural areas.

Conservation International called the 1998 law "the most important conservation law you've never heard of." The nonprofit spearheaded a successful effort in 2020 to encourage Congress to reauthorize the TFCCA law, which lapsed in 2014, and to extend its focus on tropical forests to include coral reefs that play a critical role in carbon sequestration and supporting marine wildlife. At the time the law was reauthorized in 2019, Conservation International estimated that it had helped preserve about 68 million acres of tropical forest.

Washington, DC partners Martin Menski and Suzanne Perry led the Firm's team and said the debt swap presented interesting challenges. For example, while the US Congress renamed the law to include coral reefs, some of the finer points of structuring the deal required the lawyers to translate provisions from "land to sea," including accounting for the law's flora and fauna provisions when coral is arguably both.

Menski and Perry believe that debt swap deals like this could be a vital tool for developing countries that are looking for ways to partner with the US on sustainability while reducing their external debt burdens, noting that the TFCCA provides precedent and a clear, feasible path to impact. They hope their team's innovative debt swap paves the way for additional deals to protect threatened coral reefs worldwide.

Since 2006, White & Case has worked with Conservation International and other environmental groups on seven debt-for-nature swaps for a value of approximately US$200 million for conservation. Romas Garbaliauskas, Conservation International's Vice President for Conservation Finance Innovation and Replication, is a White & Case alum who worked on some of the Firm's earliest debt-for-nature transactions.

"Most of my career has been dedicated to driving more finance into nature, starting in 2006 when I led the Firm's first pro bono engagement on a TFCCA deal," says Garbaliauskas. "Since then, White & Case has supported Conservation International's work on debt-for-nature transactions and beyond," he adds. "Our collaboration is growing as the need to conserve biodiversity and address a changing climate grows. We expect to see more deals like this in the future."

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Protecting our oceans through high-quality governance institutions
To advance the Sustainable Development Goals (SDGs) and better understand how governance affects the protection of our oceans, our lawyers teamed up with the United Nations Development Programme's Global Policy Centre for Governance and the German Institute of Development and Sustainability to examine connections between SDG 16 (Peace, Justice and Strong Institutions) and SDG 14 (Life Below Water). This collaborative study grew out of earlier research concerning the relationship between SDG 16 and SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities). By assisting with a systematic review of academic publications, 23 White & Case lawyers from nine offices laid the groundwork for the study's key findings. For example, one finding was that transparency and combating crime, including corruption, are instrumental to marine and coastal protection.

Photo by © Grant Thomas
Sunset at Lissenung Island in Papua New Guinea.