BUSINESS PROGRESSING TOWARDS SUSTAINABLE DEVELOPMENT, HIGH-LEVEL MEETING TOLD

29 April 1998

Press Release
ENV/DEV/475

BUSINESS PROGRESSING TOWARDS SUSTAINABLE DEVELOPMENT, HIGH-LEVEL MEETING TOLD

19980429 Statements in Sustainable Development Commission Address Role of Industry, Social Dimensions of Freshwater Management

Business was progressing towards sustainable development, but it needed the right framework conditions from society if it was to make more rapid progress, the Chief Executive Officer of Westvaco Corporation said this afternoon. He was addressing the Commission on Sustainable Development as it continued the high-level segment of its current session.

He said that business was contributing to solutions and only asked that it be allowed the opportunity to earn a profit. The role of business was to highlight the conditions which would enable it to advance sustainable development -- the most crucial of which were freer and more open markets and international standards for quality and environmental performance.

A representative of the Women's Caucus, however, cautioned about the role of business in freshwater management. One's guard should go up against being romanced by a market which sought to price water as another global commodity, euphemistically calling it "an economic good", she said. While welcoming voluntary initiatives by industry, she said they should be required to meet acceptable time-bound targets, to be monitored by broad-based, independent mechanisms that included all stakeholders.

The Chairman of the International Affairs Committee of the American Federation of Labor/Congress of Industrial Organizations (AFL-CIO), said the question was not whether markets were open, but under what terms, for whose benefit, and with what kinds of environmental consequences. The benefits of more open trade had not helped those struggling to get out of poverty, much less trickled down to the middle class. Including worker and environmental rights in the core texts of trade agreements would help to alleviate poverty, he said.

The financial burden of protecting the environment was an issue that never escaped a developing country. Thailand's Deputy Minister of Environment, Science and Technology told the Commission. Insufficient financing was a key obstacle

to developing countries' environmental efforts. Also, those who had begun the depletion of natural resources and gained economically from it should be held accountable for the remedy as well.

Statements were also made by ministers from Ghana, Pakistan, Lithuania, Argentina, Algeria, the Philippines, Egypt, Mozambique and Zimbabwe, as well as by the representatives of China, France, South Africa, the Netherlands, Panama, Saudi Arabia and Ethiopia. A representative of the Indigenous People's Caucus also spoke.

The Commission will meet again at 10 a.m. tomorrow, 30 April, to continue its high-level segment.

Commission Work Programme

The Commission on Sustainable Development met this afternoon to continue its high-level segment. (For background, see Press Release ENV/DEV/474 of 29 April.)

Statements

J.E. AFFUL, Minister of Environment, Science and Technology of Ghana, said his country was currently facing a water crisis. Drought was affecting river levels and production of electricity, because water power was needed to run generators. Electricity was being rationed, and the use of coal and wood for fuel was having a detrimental effect on the environment. Communities were facing a shortage of drinking water. If rain did not come in a few weeks, there would be more serious problems. Had effective water management measures been taken earlier, the problem would not be as severe. His country had taken water access for granted, despite water scarcity problems in the past.

While the idea of having users pay the primary costs of water was a positive one, it would lead to a social problem in Ghana, he said. The rural poor, who could not pay, would have to resort to using unclean water, exposing many people to disease and placing a great burden on society. Countries should be encouraged to share their experiences in the area of freshwater management. He expressed the hope developed countries would come to the aid of Ghana and help it design effective and sustainable water management policies.

MAKHDOOM SYED AHMAD MAHMUD, Minister of State for Environment, Local Government and Rural Development of Pakistan, said the finite supply and competing uses of water made it an economic good, but that should not take precedence over its social dimension. In Pakistan, less than 20 per cent of the population had access to clean water and sanitation. The internationalization of all costs associated with it would deprive a large

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majority of access to freshwater. His Government was working closely with industry to promote responsible entrepreneurship, both in economic development and environmental protection.

He said the transfer of environmentally sound technologies remained central to realization of the objectives of Agenda 21 -- the action plan of the 1992 United Nations Conference on Environment and Development. Markets alone could not ensure adequate investment in the development of such technologies. The role of governments should move beyond that of establishing an enabling framework.

Sustainable use of the marine environment was essential for the global life support system, he said. At its next session, the Commission should suggest specific measures to realize the related goals and objectives contained in Agenda 21. Sustainable development was an inescapable reality. The results of the review process, held five years after the 1992 Conference, had been sobering. "We should endeavour to ensure that the review in the year 2002 would not be as disappointing."

ARTURAS DAUBARAS, Vice-Minister of Environmental Protection of Lithuania, said his country had prepared a detailed strategy and action plan which included more than 200 environmental protection directives. Public participation was a key element in Lithuania's environmental strategy. The society must have the knowledge, expertise and skills to achieve sustainable development; there must be public awareness of environmental concerns and an interest in finding solutions. It was important to emphasize the role played by regional agreements, which proved very useful in addressing sustainable development challenges in practice.

JOHN A. LUKE, JR., Chairman and Chief Executive Officer of Westvaco Corporation, said that two paradigms had emerged as winners from the past 30 to 40 years of the debate on sustainable development. The first was that the environment was integral to society; the second was the concept of free and open markets. Progress would be fastest through cooperative, collective efforts that took account of those two winning paradigms.

Today's world was tri-polar, comprised of governments, business and civil society, he said. Governments had a crucial contribution to make, and business operated within the framework conditions enacted by governments. Business was contributing to solutions, asking only that it be allowed the opportunity to earn a profit. The role of business was to highlight the framework conditions which would enable it to contribute to sustainable development. The most crucial included freer and more open markets -- the lifeblood of all economies -- and international standards for quality and environmental performance.

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Business was progressing towards sustainable development, but that was only the tip of the iceberg, he said. The ongoing process of change, and the improvements stemming from both technological and management innovations, would have significant consequences. However, for business to make faster progress in that direction, it needed the right framework conditions from society. Business could not address the sustainable development challenges alone; it needed an active dialogue with all of society's stakeholders.

MARIA JULIA ALSOGARAY, Secretary of Natural Resources and Sustainable Development of Argentina, said her country had been a leader in privatizing its public sector. That task had been easy with such services as the telephone system but not with water, since there were political, social and economic aspects to be considered. There was no such thing as free clean water; it had to be produced, and there was a price. The question to be asked was who would pay.

There were differences between water for agriculture, industry and human consumption, she said. The problem arising from those differences had not yet been solved. The public and private sectors had to work together with investment generated by the private sector. Attracting investment in water resources would depend on ensuring the presence of juridical assurances, economic compensation and efficiency. The issues related to water management had to be solved by partnership between the public, private and civil sectors. Solutions must be based on the principle of sustainable development.

PORNTEP TECHAPAIBUL, Deputy Minister of Environment, Science and Technology of Thailand, said the financial burden of protecting the environment was an issue that never escaped a developing country. Insufficient financing was a key obstacle to promoting the effectiveness of developing countries' environmental efforts. With official development assistance (ODA) dwindling, foreign direct investment (FDI) was useful. However, it should not replace ODA, especially in the least developed countries.

During the course of industrialization and economic growth, Thailand had faced many adverse impacts on the environment, he said. There was pollution in congested areas and widespread deterioration of the natural environment, and many remedial actions had been taken. Thailand subscribed to the "polluter pays" principle. That principle applied both to past and present users and polluters. Those who had begun the depletion of natural resources and gained economically from it should be held accountable and responsible for the remedy as well.

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The United Nations Conference on Environment and Development, held at Rio de Janeiro in 1992, had set the target for ODA at 0.7 per cent of gross national product (GNP); not even half that had been achieved. The present burden on the environment caused by the past must be shared equitably.

JAY MAZUR, President of the Union of Needletrades, Industrial and Textile Employees and Chair of the International Affairs Committee of the American Federation of Labor/Congress of Industrial Organizations (AFL-CIO), also spoke. He said that with the debate between free trade and protectionism concluded, the question now was not whether markets were opened, but under what terms, for whose benefit, and with what kinds of environmental consequences.

The benefits of more open trade had not helped those struggling to get out of poverty, much less trickled down to the middle class, he said. Including worker and environmental rights in the core texts of trade agreements would help to alleviate poverty by building a consuming class around the world. The real question was how international trade, development and environmental agreements could protect basic standards and promote sustainable development.

One needed only to visit the neighbourhoods on the Mexican side of the Rio Grande River to see the devastation created by unsustainable development, he said. There, modern factories were using the most advanced technology but workers were paid less than $1 an hour and lived in squalid conditions. The issue of worker safety was best illustrated by the situation of hundreds of thousands of young women workers in Asian sneaker factories which used glues containing benzene -- a severe cancer hazard.

What would it take to reverse those frightening trends, and achieve the goals of Agenda 21? he asked. The real solutions to poverty and environmental degradation were to plan for economic changes which benefited all the people of developing countries -- not just the wealthy. That must mean incorporating core labour and environmental standards into national laws and development policies, as well as into international agreements. The new treaty on climate change, for example, must include specific and enforceable provisions guaranteeing national recognition of those core labour standards.

MOHAMED GUENDIL, Secretary General of the Ministry of Interior, Local Communities and Environment of Algeria, said his country suffered greatly from lack of freshwater, a situation that was aggravated by poor distribution. Supply of water had always been an essential element of the economic and development process in Algeria. His country had resolutely committed itself to reorganization of its water management policies and had established five regional agencies to control and monitor water management.

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He said that Algeria's new strategy also involved committees made up of all stakeholders to monitor water policies, and new legislation had opened up the water market to private and foreign investment. A fifth of the world's population did not have water access. Efforts should be taken by developing countries to improve that situation through such measures as the transfer of technology, investment, and education and training.

RAPHAEL P.M. LOTILLA, Deputy Secretary-General for Economic Planning of the Philippines, said there were many ways of legally protecting the environment, including the ecosystem approach now being implemented in his country. Community-based approaches could serve as models for organizing other plans.

In considering whether water should be viewed as an economic good or a human right, it must be remembered that people had no option with respect to water, he said. They could be made to pay for it, but privatization was not the only way to involve the private sector. In Manila, concessionary arrangements had been made whereby private firms were committed to providing clean, healthy water to the people within a given period of time.

MOSTAFA TOLBA, Former Minister of Scientific Research and Senior Advisor on the Environment of Egypt, said the Commission should consider was how to bring about greater dialogue in its high-level segment. The industry segment was a marvelous example of how to effect such a dialogue, but there had been an imbalance in representation between the North and the South. Efforts should be taken to ensure equal participation from all groups and areas of the world at the Commission's 1999 session.

He said the proposal on the pricing of water might work for developed countries were industry was the primary user of water. In developing countries, however, where most water was used for agriculture, it was much more difficult to assess a price on it. The idea of putting a price on water's social and economic functions was challenging.

SHEN GUOFANG (China) said that industrial development was an important prerequisite for sustainable development. It was also a major reason why environmental protection was needed. China had made progress in managing water resources and in pursuing sustainable industrial development. Like other developing countries, however, it faced the formidable tasks of developing its economy and eradicating poverty while overcoming severe water shortages, pollution and backward industrial technologies.

Developed countries should translate their commitments into actions, he said. In addition to aid projects and technology transfer, industry should help developing countries devise environmentally friendly, clean and energy- saving technologies. Favourable terms should be extended for the transfer of

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environmentally sound technologies under direct or indirect government control. Only by helping developing countries to achieve sustainable development would the ultimate goal of global sustainable development be realized.

JACQUES ANDREANI (France) said the recommendations made at a ministerial conference on freshwater last year in France should be considered by the Commission. Conference participants had stressed the importance of integrated water management, and that water had costs which must be recovered in some way. Such recovery should take account of the many related circumstances, especially the situation of the poor.

He said the Commission's segment on industry had been characterized by a spirit of partnership between the public and private sectors. The idea of voluntary initiatives by businesses to promote sustainable development was important. However, governments should remain deeply involved in such efforts through regulations and incentives.

BERNARDO FERRAZ, Minister of Environmental Affairs of Mozambique, said his country had participated actively in the Rio Earth Summit. Since then, extensive efforts had been made to promote sustainable development at the national and local levels. Mozambique had undertaken a number of efforts to improve its water management policies, including the establishment of a regional water administration and a new national water policy. They aimed at satisfying the basic needs of the population, strengthening national security, reducing poverty, and promoting development. The challenge now was to put the goals of Agenda 21 into practice. Greater financial and technical resources were needed if those goals were to be realized.

KADER ASMAL, Minister for Water Affairs and Forestry of South Africa, said that apartheid's legacy of inequality was nowhere more apparent than in the unequal access to and control over natural resources. Comprehensive and integrated approaches to freshwater management, based on fairness, equity and sustainable use, were vital. Key principles for sustainable freshwater management in South Africa included establishment of the Government's role as public trustee of its water, which was seen as a public resource; an assured supply of water for ecological requirements; and the assurance of water for basic human needs.

He said the global challenge now was to recognize that while the use of economic principles in water pricing was essential, those sections of society which could not afford to pay the full price must not be penalized. The international community must find innovative financial mechanisms to ensure that lack of access to available water resources did not become an even bigger threat to sustainable development than scarcity of water.

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In the next few days, South Africa would ratify the 1997 United Nations Convention on the Law of the Non-navigable Uses of International Water Courses, he said. The developed and developing worlds were faced with problems which differed in degree but not in content. He cautioned against expecting the developing world to bear the brunt of global resource protection while the developed world reaped the benefits of its historically unsustainable industrial developments.

JAAP RAMAKER (Netherlands) said the dialogue sessions with industry last week had been extremely useful and had set the standard for future exchanges. That was fortunate, because sustainable development was impossible without the full involvement of industry. Industry had also played a major role in the international expert meeting on the environmental practices of offshore and gas activities, co-organized in his country with Brazil earlier in the year.

Among the issues at the heart of sustainable development was the need to change consumption and production patterns, he said. Another was water management, in which the Netherlands had been engaged for centuries. His country was eager to contribute its abilities to elaborating and implementing integrated water management worldwide. To that end, it would host an international conference on freshwater management in the year 2000.

RUTH DECEREGA SMITH (Panama) said the Panama Canal was an entirely unique water system having an enormous impact on the surrounding ecosystem. For each of the approximately 36 ships that passed through it every day, 52 million gallons of fresh water were used. Building the dam had changed the ecosystem and created negative effects. The ships passing through the Canal had impacted on Panama's social, economic and political life.

The canal provided a crucial service to world trade, and the international community should support the country's sustainable development, she said. The concept of sustainable development in Panama involved achieving synergy between canal activities and other social and environmental functions. The basin needed integrated and coordinated management, centring on the need for additional freshwater. That would require construction of another dam.

NIZAR TAWFIQ (Saudi Arabia) said water was very scarce in his country and the little natural freshwater it had was used for agriculture. Saudi Arabia had to turn to the sea to provide much of its fresh water, through desalination techniques. If a market price was charged for water in his country, its cost would be unbearable. Water could not be thought of merely as a marketable commodity but must be considered as a social commodity as well. Greater attention should be given to the transfer of clean and sound technologies. Steps should be taken to ensure that those technologies did not have a negative effect on local industry or upset the competitive balance among businesses.

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CAROL CALAFATIC, of the Indigenous People's Caucus, welcomed the cooperation and good will shown by the groups taking part in this year's session of the Commission. The intergovernmental process should support the new format of the Commission's work and should continue developing strategies for water use and the eco-approach. Nevertheless, the interests of all groups had not been equally represented.

It was universally agreed that the lands of indigenous people must be protected, she said. Governments must manage the environment of indigenous people to ensure their well-being and protect their inherent right to self- determination. The prevailing development paradigm did not do that. Furthermore, it was unsustainable.

The Commission should adopt an approach to its work based more on ecosystems, she said. Self-determination and collective rights should be considered when sustainable development took place on indigenous lands -- such as in the part of Colombia where the people announced they would commit mass suicide if a global corporation put a gas line through their land.

JOCELYN DOW, of the Women's Caucus, said one's guard should go up against being romanced by a market which sought to price water as another global commodity, euphemistically calling it "an economic good." Water had an economic cost already, in the time spent by women and girls who carried it for the equivalent of 10 million work-hours annually. It had an even higher cost in the millions of children who died from water-related diseases. It also had an ongoing cost for the thousands suffering from cancers and genetic defects because of contaminants in the Aral Sea and other such pools of nonsustainable human activity.

Not least among those activities were the military and industrial actions that continued to degrade and deplete water, as the parties continued their mad quest for profit and power, she said. Voluntary initiatives were welcome, but all industries should be required to meet acceptable time-bound targets, to be monitored by broad-based, participatory, independent mechanisms that included all stakeholders. The informed participation of indigenous people should be included in all project planning, implementation and evaluations on their land and water resources, as called for by the World Bank.

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Informal Discussion

CIELITO HABITO (Philippines), Commission Chairman, opened the floor for comments.

SIMON K. MOYO, Minister of Mines, Environment and Tourism of Zimbabwe, said that water had no substitute and could not be replaced. Water had a social and cultural importance, and placing a price on that value was difficult. Attempting to recover the true cost of water would mean sentencing some people to death, especially in developing and poorer countries.

DURI MOHAMMED (Ethiopia) said when there were transboundary aspects of water management, water was a very important part of cooperation between countries. Many developing countries had tremendous problems with providing freshwater. That was due, in part, to a lack of technical means for developing water sources.

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