UNITED NATIONS: WTO MUST BE MADE ACCOUNTABLE

8:16 AM Apr 16, 1997

UNITED NATIONS: WTO MUST BE MADE ACCOUNTABLE
New York, 15 April (TWN) -- Leading representatives of development and consumer organisations today called on governments in the Commission on Sustainable Development to institute processes to make the World Trade Organisation more "transparent and accountable" so that its decisions would not offset the goals of development or environmental protection.

At an official session of the CSD, which is meeting here to prepare for the Special Session of the UN General Assembly in June to review Agenda 21 five years after the Earth Summit, the NGO representatives also called on the CSD to conduct reviews of the WTO agreements from a sustainable development perspective. They also called for greater accountability of big corporations.

The NGOs were speaking at a panel discussion on the "Future Role of the CSD" as part of the CSD Dialogue Sessions with Major Groups. About 250 delegates from governments, international agencies and NGOs attended the session.

Giving a presentation on "Trade, Environment and Sustainable Development", the director of Third World Network, Martin Khor, proposed that the CSD initiate close dialogue with the WTO in general and with its Committee on Trade and Environment, and generate a process by which the WTO can be made more transparent and accountable to the larger international framework of cooperation and development.

"This is critical because the rapid developments in the WTO have such major ramifications for sustainable development and yet there is a lack of information and participation from the public, from many sections of national governments and Parliaments, and from other international institutions," said Khor.

"Our endeavours in other areas in environmental protection or in social and economic development may be offset and in fact are being offset in many aspects by decisions and policies at the WTO.

"In this context, we propose that the CSD secretariat, the CSD inter-governmental process and its national focal points generate processes to assess the implications of existing agreements as well as new proposals in the WTO and other trade agreements, from a sustainable development perspective. Such assessments should be made an input into the process of the WTO and other institutions."

Khor said that NGOs consider trade and environment to be a very important cross-cutting issue, which should be broadened to incorporate trade and sustainable development (and not only the environment) in line with Agenda 21's aspirations.

Therefore, the CSD should in future deal with issues relating to trade and environment; trade and development; and the intersection of trade, environment and development.

"These issues have become so important and also so complex, with rapid developments taking place in the world trade system, that the CSD should give it very high priority," Khor added.

He proposed that the CSD set up a special Sub-Commission or Panel on Trade and Sustainable Development, and that the issue should be discussed at each annual CSD session.

Also, the CSD should evolve to become the appropriate and important venue for policy discussion and recommendation in this complex set of issues because it is the natural "home" for the intersection between trade, environment and development in the broad context of sustainable development and Agenda 21. It should of course continue to work closely with UNCTAD and UNEP on these issues.

Khor also raised many issues of concern to NGOs within the trade and sustainable development theme.

On trade liberalisation and the environment, there is on one hand the reality that trade liberalisation is expanding and spreading the existing unsustainable patterns of production and consumption, with adverse environmental effects.

"We must recognise the need to reform trade patterns as we do the need to change production and consumption patterns since 'business as usual' is not working," Khor said.

"On the other hand in the adjustment process, the principle of "common but differentiated responsibilities" must be adhered to, so that the burden is carried by the strong and rich and not shifted to the weak and poor. The equity principle must be central to all trade reform processes."

On trade and commodities and financial resources, Khor said the continuous decline in the terms of trade of most developing countries is the major cause of their lack of financial resources.

An UNCED paper had revealed that the tremendous decline in commodity prices vis-a-vis prices of manufactures caused Sub Sahara Africa to suffer a 28% fall in terms of trade (between 1980 to 1989), leading to $56 billion income losses in 1986-89. The losses in 1987-89 were equivalent to 15-16% of GDP.

"Unless such catastrophic resource outflows are checked or offset it would be ironical to talk about "finance for sustainable development", especially in the face of aid decline," Khor said.

He proposed that the CSD should initiate a new round of commodity agreements, based on supply planning and higher commodity prices to reflect ecological and social values, that would ensure net benefits to commodity-exporting developing countries and as a means to generate financial resources for sustainability.

On the WTO, Khor said its agreements had on the whole benefitted the stronger trading countries much more, and many weaker countries are likely to suffer net losses in many areas.

"The CSD should facilitate a sustainable development and equity review of the WTO agreements with the aim of providing inputs for the WTO process of reviewing the agreements in the next few years. It should advocate in favour of weaker and poorer countries so that their economic resource base is not further eroded, rendering sustainable development more difficult.

"In particular, we are concerned that the WTO agriculture agreement has not taken into account the needs and interests of small farmers, especially the non-commercialised farmers in developing countries that form a large section of the population.

"The CSD should initiate an assessment of the Agriculture Agreement, in particular its impact on situation of small farmers and in the context of food security and sustainable agriculture."

Khor also proposed that the CSD take up the issue of intellectual property rights and sustainable development.

"We are concerned that the "upgrading" of intellectual property rights regimes under the TRIPS agreement of WTO is hindering the transfer of technology, making it difficult or impossible (especially for developing countries) to fulfil their environmental obligations.

"Therefore the CSD should recommend that the TRIPS agreement be amended to enable the effective transfer of environmentally sound technology.

"Moreover there are many technologies that are environmentally damaging. The CSD should examine how the use and transfer of such technologies can be discouraged by allowing exclusion from patentability of such ecologically damaging technologies."

Khor further stressed that the patenting of life forms (including crops, medicinal plants, animals, microorganisms and even human beings and human parts) is opposed by many NGOs of the North and South on grounds of environment, development, equity and ethics.

"It is a major sustainable development issue, and has become the subject of public controversy and unease due to recent developments in genetic engineering, such as the cloning of animals, the sale of genetically-engineered foods and the safety and ecological effects of genetic engineering.

"The CSD cannot remain absent in the discussion and should take an overview position on patenting of life in favour of sustainability goals.

"This should include supporting alternatives to commercial patenting of crops, such as helping farmers and indigenous communities to develop a sui generis system of protecting their community intellectual rights and protect them (and the public) from corporate patenting (or "biopiracy") of indigenous knowledge in the use of biological materials."

Khor added that the liberalisation of investment regimes and flows had significant implications for sustainable development and urged the CSD to urgently examine and discuss this.

"Moreover, the multilateral agreement on investment (MAI) in the OECD would also have a very major impact and could to a large degree offset or undermine the CSD's sustainable development endeavours.

"The MAI would grant unprecedented rights of entry, freedom of operations and "national treatment" to foreign investors, whilst depriving governments (and people) of the right to regulate the entry and operations of foreign companies and investors.

"The CSD should collect information on the MAI and make an analysis of its implications for both environment and development, and provide the results to the OECD process as well as to all CSD members and related NGOs. The CSD should also closely monitor developments in the WTO on trade and investment. As the custodian of sustainable development and Agenda 21, the CSD cannot ignore or remain aloof from these critical developments in investment regimes."

The issues of trade, investment, environment and development, Khor said, are key to the interaction between economic globalisation and sustainable development. "This is probably the most important set of issues in the entire field of environment and development," he stressed.

Globalisation is the most powerful force driving and determining the global environment as well as national development and environment patterns.

"The process is so far unregulated and in fact has thrived on massive deregulation. This is recognised increasingly by a wide spectrum of people as a threat to economic and political stability due to its greatly inequitable effects, its generation of financial volatility, and its adverse social and environmental impacts.

"The CSD is perhaps the most appropriate international institution to examine this phenomenon and to initiate ideas and actions to deal with it. The CSD-V and the General Assembly Special Session should not pass up the opportunity to do something concrete about this."

Maria Elena Hurtado, policy director of Consumers International, and speaking on behalf of the NGO Task Force on Business and Industry, said that the NGOs were concerned that the increasing rights given to corporations were not met by safeguards that they do not undermine development and democracy.

"It is essential that governments set standards and regulations for companies," she said. "A framework for corporate accountability is needed."

She said the NGOs proposed that a UN Subcomission on Corporate Accountability be set up, comprising representatives from business, NGOs and governments.

Hurtado added that the NGOs felt that the UNCTAD's Investment Division, which was formerly the UN Centre on TNCs, was badly neglecting the issue of corporate accountability (the focus of the former UNCTC) but was instead focusing almost exclusively on investment trends and the promotion of foreign investment.

She also criticised the lack of public consultation in the OECD's negotiations for a multilateral agreement on investment. Environmental, consumer and social standards should be placed in the MAI.