Oct 12, 1990

ENVIRONMENT AND SUSTAINABLE DEVELOPMENT.

GENEVA, OCTOBER 11 (BY CHAKRAVARTHI RAGHAVAN)— Both Industrialised and Third World countries have called on the UN Conference on Trade and Development (UNCTAD) to adjust its Trade Control Measures Information System and monitor environmental regulations for possible protectionism and NTMs, which have a bearing on environment.

The call has come in separate draft resolutions, one by Norway on behalf of the group of OECD countries and the other by Senegal on behalf of the Group of 77, tabled before the sessional committee of the UNCTAD Trade and Development Board which is considering the subject of "UNCTAD’s contribution, within its mandate, to sustainable development". Both drafts, with some nuances of wording, want this to be done in connection with efforts "to promote dialogue" within UNCTAD on the inter-linkages between environmental and trade policies.

Interestingly, both groups, despite their endorsement of the "precautionary principle", have shied away from raising the "environment and sustainable development" issues in the GATT and Uruguay Round negotiations where trade policy rules that would apply well into the next century are being re-written. The governments of ICs have been telling their environment groups that this issue should be on the agenda of the next round.

Ever since the Bruntland Commission in its Report published in 1987 (which brought environment and sustainable development together in a holistic way), Norway and other Nordic countries have been pushing the issue in all UN fora, but have not raised it either in the General Agreement or in the Uruguay Round talks.

The reason lies in the awareness of the OECD countries, which despite their mutual differences have a common position in the Uruguay Round talks vis-a-vis the Third World, that the issue of environment and sustainable development would come in the way of the kind of rules for global production and trade in goods and services - involving traditional GATT areas as well as new ones like intellectual property, investment and services - that they are trying to write to ensure the continued dominance of world economy and markets by their enterprises, particularly TNCS. To the extent that the issue has surfaced, it has been purely in terms of "environment" as a "health" factor - for protection of health of humans and animals - that would allow governments to use the GATT exception provision in Art. XX to avoid GATT obligations.

Third World countries too have not been enthusiastic in aggressively promoting in the GATT or Uruguay Round the concept of "sustainable development", and changes in GATT rules that would permit Third World governments to take measures in the area of trade and development and directly attack poverty and thus promoting and sustainable development. They have been worried that to the panoply of existing Non-Tariff Measures (NTMS) and other instruments used by the Industrial World to keep out their products, one more would be added under the guise of environment protection. The attempts of farm lobbies in the North to cite the environment, issue to protect themselves against agricultural imports have only strengthened their fears.

That they could promote more easily the "development" concept which they want to integrate into the GATT rules has not been sufficient to encourage them to bring the issue of "sustainable development" as a positive concept to justify their trade policy instruments, since they fear that GATT, in the ultimate analysis, being an instrument of exercise of "trade-power" by the powerful, it would be difficult for them to use any exceptions. Even the view that is now growing among the grass-roots ecology groups of the South and the North that the new international trading system and regime that would come out of the Uruguay Round, assuring the same set of rules and rights (but not obligations) for TNCs around the world would damage Third World capacities for sustainable development has not appealed to them - partly because their economic policy makers in capitals are all imbued with the World Bank/IMF economic thinking and policies.

Only the European Community has been trying to float the idea of a decision or declaration by the GATT Contracting Parties to deal with issues of environment, health and consumer protection in trade and GATT's work - partly to protect its CAP.

The two drafts before the UNCTAD sessional committee call for incorporation of the "sustainable development" concept in all areas of intergovernmental work in UNCTAD and the secretariat's ongoing work particularly in areas of trade, commodities, technology and finance for development.

The G77 draft also calls for the concept being "adequately reflected" in the secretariat’s analytical work, contributing to "innovative thinking" and increased awareness in area of environmental development economics by undertaking and publishing studies on the subject. The G77 calls also on the secretariat to prepare an analysis, for the September-October session of the Board in 1991, of the concept of sustainable development.

The OECD draft also wants this analysis to cover the "interface" of sustainable development with "micro-economic and structural economic policies for development". This would presumably exclude issues of macro-economic policies as well the concept of "sustainable development" as involving unsustainable production, growth and consumption in the north too.

In the general debate in the sessional committee on the issue, Colombia speaking for the G77 argued that the global environment problems were largely the responsibility of the ICs who owed an "ecological debt" to the rest of the world and had to bear the lion's share of responsibility for making good the damage caused.

Welcoming the proposal of the UNCTAD Secretary-General (at the Bergen European regional conference earlier this year) of "tradable carbon emission permits" as away of dealing with problems of climatic change, the G77 suggested similarly analysis of economic management instruments introduced in various countries to encourage more sustainable behaviour as well as development implications of "polluter-pays principle" and the principle of precaution. The G77 were also concerned with the increasing incidence of environmental conditionality in the area of aid and development finance and called for a systematic analysis of array of fiscal measures proposed for various global environmental issues such as climate change, ozone-depleting substances, biological diversity and anti-desertification measures. Additional income should accrue to the Third World as a matter of right, and not of charity, through correction of market failures and by internalising externalities which often fell on the Third World countries.

The environment and sustainable development issue, the G77 said, raised new issues in negotiations on transfer of technology such as terms offered for acquisition of replacement technologies and liability for damage incurred in use of old ones.

Speaking for the OECD group, Norway claimed that experience had shown that progress in technology allowed for greater industrial output while at the same time reducing negative ecological consequences. The secretariat could analyse factors that had an impact on diffusion and use of adequate and environmentally sound technologies. The investment climate in the receiving country as well as international economic policy environment greatly influenced decisions of private enterprises in technology transfers.

Sweden speaking for the Nordic countries agreed industry should be encouraged to transfer environmentally sound and locally adapted technologies to the Third World. As for financial resources, Sweden felt that the new requirements of environment and development should be a powerful incentive for those well below the 0.7 percent of GNP ODA targets to step up their efforts. Venezuela refuted "the simplistic" allegations of the harm done to environment by use of hydrocarbon fuels or commercial exploitation of tropical forests and said that irrational use of oil should be avoided. There were also many other atmospheric pollutants. Both oil and forests were vital for the livelihood of local populations and represented an important source of export revenues to the Third World countries.

"Having long exploited for their own benefit a large part of the world's natural resources, the developed countries were now trying to force environmental policies on the developing countries - often through an unacceptable environmental conditionality - in complete disregard of the slowdown effect of such policies on the development process". "Environmental considerations could not be allowed to impinge on the sovereignty of States which had jurisdiction over the natural resources. Furthermore, the developing countries were entitled to fair compensation for the costs occasioned by a new international environmental order". Sustainable development implied a significant and immediate economic and social progress linked to conservation and rational use of natural resources and this would be possible only through a reorientation of development strategies in a favourable international economic climate.

Also, the Venezuelan delegate added, environmental degradation had been imposed on the Third World by an international economic order which impoverished over 75 percent of the world population and had been accelerated by the demands of a rapid integration into the international trading system.

Egypt complained that while some ICs had encouraged Third World countries to acquire environmentally sound technology, other ICs were exploiting the environmental aspect to impose conditions for transfer of advanced technology. The U.S. said it actively encouraged dissemination of environmentally sound technologies to the Third World, but transfer of technology was often a neutral tool whose usefulness depended on how it was used "and the control of which rested with the private sector, so that donor governments could only encourage but not enforce its wider dissemination".