RIO+5
March, 1997
Press Briefing with Int'l Chamber of Commerce
Introduction of Speakers:
Miss Maria Cattaui, Secretary General with International Chamber of Commerce
Bjorn Stigson, Director of the World Business Council of Sustainable Development
Dr. Peter Stupbalm (British Petroleum), also with the International Chamber of Commerce.
No, Mr. Stupbalm is very important to mention this, is the head of our commission on sustainable development, but not an employee of the ICC. Like all of our commissions, they are business driven and he comes from the business world specifically.
Okay, thank you.....
I just wanted to make that quite clear. He speaks for the business, broad business base that is developing the proposals, initiatives and policies of the ICC on Sustainable Development.
We will ask our speakers then to make a brief introduction on the topic they'll be discussing followed by questions from the press. Thank you.
Miss Cattaui, Secretary General of ICC:
Right. I would like to just ask my two colleagues the following. If Bjorn would perhaps more go into some of the issues that you have been doing right here, Bjorn, as you have been following through. Now I state that the WBCSD and the ICC are sisters. We are the WBCSD is in fact for us almost a part of the ICC family, and was formed as an out-growth of two organizations, one of which is an ICC driven one. So, we coordinate very closely and work in a partnership. As a result, we produce this paper for the press, this statement for you. It's on the back desk over there. Maybe somebody could pass a few of them out. If you could bring them up here that would be very nice to people.
Look. I think I want to leave things for you question on. I was here looking at environmental, regional arrangements and the International world. We come from the following --- I'm not going to repeat the issues that are in this statement. I think they are very, very clear and you can feel free to quote anything from here that you would like.
But, we come from a very simple premise at the ICC and I think we share this with the WBCSD. We all come from the premise that we're posing a single question, which is that the last years, whatever is being said, I look at reality. I come from a world of reality much more than a world of wishful thinking and the reality we're looking at is that the last years have seen an unparalleled improvement in standards of living across the globe. And it's absolutely understandably clear that poverty is in no way eradicated. And that huge populations are still below the poverty line. But, at the same time nearly two billion have been brought out of a barely substance level to something resembling a dignified human existence. And the question we're all posing ourselves clearly today, why we're here at Rio+5, can this continue?
Now, I feel that we do have three choices in front of us. We can decrease drastically and urgently the human population. That sounds to me to be a completely unrealistic alternative. Second, we can simply stop economic growth, consumption. That is an unacceptable alternative for those peoples in the world who don't have any economic growth. Unacceptable. And our position at the ICC is that we are the third option and the only viable one which is to fundamentally change the technology used to create wealth and to influence behavior.
This is the premise on which we have been working to a practical direct way. Naturally world business is enormously interested in the principles, but it has not been sitting around the last three years, five years, doing nothing and our feeling is that choice, the choice to fundamentally change the way in which we produce, the way in which we approach our economic technologies, is the only way that we can go forward in a practical way. That is the premise on which we have been working.
Now, I'm not going to go into the details of multilateral environmental arrangements and regional environmental arrangements. I will leave you to ask questions on this. But I might ask you Bjorn, now to take it one step further and Peter, on the precise issues that have been raised here.
Mr. Bjorn Stenson, Executive Director of the WBCSD:
I'm the Executive Director of the World Business Council for Sustainable Development. And, this was an organization that started in connection with the UN Conference here in 1992. And, there was a request for business input into the discussion about sustainable development and the business got together and produced changing course which was --had a fundamental effect, I think, on the thinking of the opposite problems.
We later on, as Maria Cattaui said, merged with parts of the ICC to create what is today the World Business Council on Sustainable Development.
We produced last year a book called Financing Change. And we have put together and I hope all of you have a copy of this, and if not I'll be happy to give to you, another report that we put together which is called Signals of Change. And where we have tried to describe what we see as the signals of change that has taken place during the last five years. We are not saying that we have a sustainable development yet, but we see a number of encouraging signals and we see that the business community is doing a lot to change. My own view, my colleagues tell me to be more humble, but my own view is that I think that the business community had done more than other parts of society in putting change in place. Not talking about what is needed for greater sustainable development, but actually doing things, putting action in place. We have tried to describe those changes in this report, Signals of Change.
We fully see that when we have move society from where we are today to a more sustainable development situation that one of the key factors that we have to deal with is finding new ways of governance. That's why I'm here. Because, business cannot do this on its own, nor can government do this on its own, nor can ...... do it on its own. But we have between us, between governments, between business and civil society find new ways of dealing with these issues. The old ways of governance are not going to function. And you cannot move from where we are today to more sustainable society without winners and losers. And it's going to put a lot of stress on society. And unless we find the right ways of talking to each other we will not be able to deal with this. But that talk, that discussion has to be in a context of trust. And the reason I'm here is that I'm trying to build that type of trust to show that we are serious from the business community in dealing with these issues. And we hope that there is the same seriousness from other parts of society in coming to grips with these issues.
Maria:
May I just add one thing. Exactly along the line of what Bjorn is talking about. Look. Just sometimes we don't know who are partners are when we talk. I just want to tell you the ICC is not a Chamber of Commerce, even if its name is that. It's the World Business Organization. It's the only organization that has absolutely, totally broad based accountability. We are present in 130 countries and we are built like the UN, that is with each country voting on all of our proposals and in all of our statements and in all of our rules and disciplines and everything else that the ICC comes out with. And it's very important I think to understand that we have today something called a broad based international business community. It is not relegated anymore to ten countries and 100 companies from those ten countries. We're dealing with an absolutely new phenomenon in the world which is a huge broad-based new group of an international business community and the ICC speaks not for OECD, not for Europe, not for any particular group nor sector, but for companies of every size right across the globe. And the consensus positions we come to are those that are hammered out in our commissions such as the one headed by Dr. Peter Stupbalm (? SP?) in order to come then to the international arena with points of view, questions, because they're not always statements, very often they're questions, they're queries and they're processes that have been worked out over a difficult consensus attitude.
In some of the more sensitive issues, like linkages of trade and environment, linkages of investment, and trade and environment, we're still working on building that consensus world wide. And we call for a continued ..... along these areas. Peter, perhaps you could say what your particular sustainable development group has been working on.
Peter:
Thank you, Maria. I'd like to say three things. First of all, as chairman of the ICC's Commission on Sustainable Development, we have a business charter which goes back five years to Rio 1992. the Business charter focuses on 16 principals of environmental management. And over 2000 companies, all members of the ICC world wide support the charter and many of them use it in developing their own policies, their own environmental management systems. It helps them set targets for performance improvement and gives them a yardstick against which to measure how they're doing.
If I come one level down to my own company, to BP, which is at the heart of many of the issues that are being discussed today in the oil and gas industry. British Petroleum, thank you Maria. One year ago BP revised its environmental policy. And it set itself three simple goals: no accidents, no harm to people, and no damage to the environment. At that time we did not think of that as being Sustainable Development. But many people say to us, is that what you mean by being sustainable? I suppose in some ways you could say it is.
The one area that we're focusing on more and more to go back to what Bjorn and Maria have said, to help us go forward in this quest for improved performance........ is developing partnerships, new partnerships. Not the old traditional partnerships based often on sponsorships between a major corporation and an environmental organization or a community, but new source of innovative ways of working and learning and sharing. Because we feel we can learn a lot from the many stakeholders that we have.
Finally, in terms of concrete performance improvements, the oil and gas industry has been particularly good at improving the way it uses energy. The European refining industry uses 25% less energy than it did 20 years ago. .......... it's more efficient by 25%. And, secondly, those same companies are producing almost 50% less waste than they did 10 or 20 years ago. So, our industry like many other ...... is making real concrete improvements in performance.
Maria:
When we talk about Sustainable Development I think that from the business point of view it's a process of moving from the environmental cleanup to the environmental pollution convention and now to processes that are far more complex and inside of company management. Whether you call that product stewardship or whatever name or label you give to it, the problem that we're now facing is that in most companies of a sophisticated nature, we've moved beyond the prevention stage and we've moved into the conception stage. Before products and processes are conceived, one takes concern about their impact.
Now there is a big problem here. The one that the ICC has, and certainly I will ask Bjorn to perhaps continue on some of the common issues the companies worked out, but the ICC is facing a very large problem. Our constituency is not just the large companies. Our constituency are all companies that have some international impact or dimension. And that is a lot today. And it's in this area of the emerging economies of the dynamic emerging economies around the world if companies that are not yet inside of the sustainable development thinking that concerns us the most and where we find we need the biggest innovative ways to get to them and to bring them into the process. This for us is a big concern. And, it isn't just a matter of size, small and medium size, it is absolutely true that while we've made enormous progresses with a lot of the larger companies who have been, let's say, up in the forefront of concern and also, I should say, risky out there making things happen. We haven't yet been able. This is speak only from the ICC's point of view. We haven't yet been able to find satisfactory and comprehensive ways to get to those other companies from countries that are just now coming into the full international circle. Bjorn, perhaps you can say some things you have been doing.
Bjorn:
Yes. We are trying to reach out to especially smaller, medium size companies and developing companies ......And as we are in Brazil I think it is interesting to note that within the last two weeks there has been -- the national business council for sustainable development formed here in Brazil. Brazil being the biggest country in Latin America has not had such a business council before. Many of the other countries have had that. What I have found extremely encouraging is that within two weeks from the inauguration two weeks ago until today, there are 19 companies in Brazil, national companies, some bigger some medium size, that have joined this national business council for sustainable development.
And, there is a very clear ambition to reach out to the broader business community, especially by indication and other means. But, at the same time we have a problem. And, that is how do we really reach the small companies? We do not have a solution to that at this point in time. I don't think anyone in the business community has that nor anyone else for that matter, in society. That is one of the issues we are struggling with in the future. And I think we just have to accept that is a big problem. And we have joined here to see what outreach we can find to these type of companies ....... education system..... you in the media. You have a very important role to play. And we all have to work together to make that happen.
Maria:
We are aware that the key to sustainable growth does lie in the emerging economies. And, we're convinced -- I would like to mention three obstacles that I think remain for us to start strongly in the business world taking our parts of the responsibilities. Bjorn said it is impossible for the business world to do everything. It can do its job. It has to be private to do its job. It has taken in some cases enormous leadership in doing its job, but it can't do everything. And there is a proper role for government to play.
There are three obstacles that I find especially in the emerging countries that we need to overcome. I think that certain legal and regulatory frameworks still fail to encourage business to commercialize new technologies in the emerging and developing markets. A second problem I think we're facing is that in some parts of the world intellectual property is not yet sufficiently protected or it's too weak. And, as you know, technology transferred by the private sector depends on real security that products and processes will be protected.
And third, I believe that we're getting false signals by subsidies to energy markets. And I believe that these subsidies are diverting resources from being searched for renewable energy resources. There are many more I'm sure obstacles and I'm sure Peter can ..... them in, too. But, for me in this quest of bringing in medium and small size enterprises, bringing in to the process emerging countries, those obstacles strike us at the ICC as being particularly worrisome.
Peter:
Could I just add a very brief word, too, that I believe one of the ways that large companies can show leadership to encourage smaller, medium size enterprises down the same path is through things like ISO 14001. That the introduction of a framework of management of environmental management for the corporation, for an enterprise which makes it more efficient in the way it manages environmental issues are at the same time more efficient than the way it manages business issues. That is a good signal. It's one of the one's referred to in Bjorn's Signals of Change, I believe.
But that's the way a large company through its supply chain, through its contractors can actually encourage and nurture the whole process of environmental performance improvement.
Maria:
With that introduction, .....I'm sorry, you're name is?
Question from press:
Andre Curry, Radio Canada International. Something that just jumps up to mind with all this is that you obviously don't represent all the businesses there are in the developed or developing world. Let me ask you something here, especially to the representative from BP. There's a lot of nice talk about observing environmental principles, but very often large companies, especially, and often multinationals don't like restraints government, environmental restraints when it comes down to the environment, environmental regulations. What would you say to these companies that resist this sort of regulation and especially a company for example like Shell that in Nigeria is notorious for having damage...... How do you get these companies to come around to your point of view? Because you are convinced that it's important to others or not. Shell is just one example. How do you bring them around?
Peter:
You raise many questions in that simple statement. What business likes more often than not is a sensible framework of regulation .... within which to work. Regulations which are soundly based on signs which have some degree of cost effectiveness behind them. And only then .. understandable and which are properly enforced so that a level playing field for business to do its business in. Now, that sometimes comes across as business saying we're opposed to new regulation. Often the opposition is the cost. It doesn't appear to be soundly based on the right sort of signs. Based on a proper risk assessment of the issues. So, I think you'll find that if, I can speak for my own company very clearly, I won't speak for anybody else, it wouldn't be appropriate, but we want to participate. We want to encourage the development of better regulation, less prescriptive regulation, more goal setting approaches, which gives us the freedom to innovate both in technology and in management systems and the way people can contribute within their own companies to better performance.
If a company goes .... and is seemed to be financially successful and socially acceptable as well, others will follow.
Maria:
I would say that sometimes you will find that we're talking vocabulary or that we're talking differences on approach. In general, business likes incentive based regulatory approaches that give it an incentive to move faster even than the regulation. And this is a very complex technical field. Bjorn, I'm sure you've had much experience also with your companies in this field. But, it is not a categoric -- there's no way, business is in no way interested in categoric statements against one regulation or against all regulations. One of the things that is most difficult to deal in is in multiple uncertainties. When you don't know what the interpretation of certain legislation is leading to and so you can't plan ahead and business needs to do that kind of planning.
So, this is why --I just came back again to what has been said a hundred times right here, and what we're all saying, and is going on. Unless we get really in the nitty gritty of business and government partnerships, these kinds of issues aren't getting resolved. And we are absolutely convinced that they do get resolved when we can sit with government in order to work some of these issues out.
Bjorn Stigson:
I often meet the question that business is being perceived as one unit, if you want. And, that there is the possibilities of .......... say for a business .... which is not possible. And there is a very wide variety within the business..... One of the big problems that we face when we at the same time say, we want more legislation that sets goals and give freedom. We also very clearly have a free rider problem, and we do not have a solution to the free rider problem. We -- the responsible part of the business community don't like free riders. But we do not have the possibility as far as we know today to deal with this issue. But we certainly recognize that problem. I sometimes, when I meet people and we talk about these things, quite often there is someone in the audience ..... but Mr. ......your company XYZ and look what they are doing in country XYZ. What do you say about that? And there are certainly bad performers among industry. But I have constantly been saying if I look at my counterparts or partners, if you want, ....if you're going to judge the business community by its worst performers, I'm going to judge in your community by its worst performers, and none is a very pretty sight, but in the middle there is a very big part of the business community and the ..... community that are very responsible people that are trying to do the same thing. And I think its very important that we don't lose sight of that. There were certainly bad performers among industry that should not ...... And there are certainly some.............and also in governments sometimes people that do not do the right thing. But lets keep in sight that in the middle and in the very broad middle there is a very broad majority that are trying to do the same thing. We might not always understand each other, and I think this conference is a very big test in trying to understand each other. I have been a business executive for 28 years and I am struggling sometimes to understand what my counterparts are saying. This has been a learning experience this week and I'm still going to learn for a few days, I think in understanding some of these things. But we're getting closer. We are getting there. Takes a while, it is a struggle. But, we are moving in the right direction.
Maria:
By the way, just on this point of our counterparts -- you know in government just in the last plenary session I chaired at, we brought up many of us a common question that even inside governments sometimes the trade ministers and the finance ministers are not exactly coordinating in advance with the environment ministers on what is going on. First and foremost we called for this, also in governments and ....... better understanding between those elements.
Joan Veon, USA Radio:
I too come here to learn. And, I too am a business woman, when I'm not messing around with these kinds of things. Because, this is a way to learn, to understand and to grow, to communicate, to integrate. So, my questions are going to be more general in order to get a broader picture instead of more specific which would take five more hours than what we're going to do.
The ICC, if you could help me understand who your counterparts are in the world that are basically doing the same thing you are doing. I have just become aware of, for example, Prince Charles, the Prince of Wales Business Trust, and so he is doing something with regard to public-private partnerships in developing countries working with multinational corporations and other corporations of other sizes. And so, I need to understand in the international spectrum who are your counterparts and how did you come together with this agenda as we move into the 21st century?
Maria:
Well, I think I mentioned before that the ICC is known as the World Business Organization. And it just happens to be that it's the only representative body that we have today that speaks with a certain amount of authority on behalf of enterprising general from all sectors and certainly from every part of the world. We are living in a most extraordinary time where there really is an international business community as I said, and it is broad based. And we don't have another organization right now other than the ICC, 80 years it's been in existence, but that is built with the same kind of accountability as an international governmental organization. We are not some kind of centralized bureaucracy. What we are is a strength of 130 countries. There are some stronger, some less strong national committees in countries. Those national committees are the ones that send people like Peter from their different companies to work on specific issues, whether these are electronic commerce, whether these are crime and corruption, by the way for a little bit of propaganda over here. I have somewhere in my mess, in the Herald Tribune I just wrote an article .... on corruption. It's been a very very large dossier of concern to the ICC electronic commerce. The ICC wrote the documentary credits, bank to bank settlements, all the basic nuts and bolts as well as the larger issues. We worked, for instance, before the ministerial meeting of the WTO in December to come up with a position which I'm very gratified to say in many, many, many cases was taken up by the final ministerial saying what it is that is a concern to the world business community. We thrashed those out because we have huge differences of opinion. Within the ICC community we have these gigantic differences of opinion between companies in one area and companies in another. And the interesting thing at the ICC-- and we battled those out before we come with a position or with a policy. That's basically what we do.
Who are our counterparts? Our counterparts are, for our national committees in each country, their national governments. Much more important today more and more importance are the international, inter-regional organizations. Regional, inter-regional, international organizations.
Can I ask my colleagues from this last session, ....Mr. .......Charlie.....you're also here. We were just at this last session, and I'm sure that they have lots of interesting things. You're coming right on here. Are you tossing us out? There seems to be a lack of a microphone.
I was talking about some obstacles that need to be overcome. These are obstacles that we have in the work that we're doing in the emerging economies, because for us the key to a lot of our sustainable development work is how we work this out within the emerging economies. We know that there are some obstacles. One of them is the legal and regulatory frameworks that still fail to encourage business to commercialize new technologies in emerging and developing markets. The second was the necessity to protect intellectual property. Because technology transfer in these countries really depends on the security of that. And the third is I think we're giving false signals by maintaining subsidies in the energy market.
By the way, before I finish, you asked me about our other partners. The ICC does have category 1 status in the UN. From the first day the UN was founded, it is the first. The ICC was the first. In 1947 when the GATT started there is picture of the ministers and the ICC representative. That's how far back that goes for .........
END SIDE ONE
SIDE TWO:
Okay, ladies and gentlemen thank you again for joining us. This is a critical issue on liberalizing trade to promote sustainable development. The panel is composed of........ for the International Institute for Sustainable Development; Mark ..... for the World Conservation Union; Charlie Clark for the World Wide Funds for Nature; and Bjorn Stensen(?) for the World Business Council for Sustainable Development. Please address your questions to one of them specifically, rather ......... This conference will end at five minutes to five. Your time is short. The panel will make their answers concise. Please make your questions pointed. Thank you.
Question:
I'd like to know, I ...... nobody has talked about this meeting. And I'd like to ask why ......biodiversity, commitment to talk about ... NGO's and business or non- governmental organizations.
Answer:
IUC and the World Conservation Union is one of the leaders in biodiversity conservation and we proposed for this Rio+5 Conference that there should be a session, a panel assessing progress in five years on the biodiversity convention. We did a survey around the world of key biodiversity actors and prepared an assessment. But this was squeezed into a very short time in the plenary session. I think the reason is that the organizers wanted to get away from the traditional breakdown of the issues into sectors. Normally you'd have a session on forests and on energy and one on water and one on biodiversity. They felt we should get away from that and so they've organized things around local level action, national level action and global action. So there hasn't been the opportunity here in Rio to focus on that issue to the extend that might have been desirable. But my colleague Jeff McNeely, who is the head of our biodiversity program didn't give a briefing to the press based on the assessment of the biodiversity convention and progress in five years, but I can give you a copy of his assessment.
Another Panelist:
I could actually just elaborate on that -- it's a very good question. Why aren't we talking about trade .... biodiversity. One of the most difficult things about this ... is that even after six years it still tends to be locked into the international level of discussions. And, we haven't done enough, either the NGO's or the governments to actually bring it down to the ground. And the proposal that we're making for an environmental review of the effects of the Uruguay round are a way of getting to the biodiversity impact among others. It's something that we're doing ourselves. We're working with the development NGO .... in the agriculture sector. .....Agricultural trade liberalization agreement including the WTO which .... reduced substance ...... it's open to developing country markets in the middle income countries and some of those countries are now more vulnerable to food dumping than they were before the Uruguay ......
We're working with Mexico and the Philippines to look at what the effects of implementing the ...... will be on two key objectives. One is food security. The other is the environment. Because more heavily subsidized US maize is now getting into the Philippines .... What are the effects on livelihoods? What are the effects when those maize farmers are economically wiped out and switched to something else, which may be a more-- a crop which causes more soil erosion.
To get to those questions we're going to have to go in and review the effects of trade liberalization. That is an urgent necessity to find solutions as well as, in the first place to define exactly what the linkages are.
Another Panelist:
If I could add a word. I think one thing this conference is all about is about partnerships. And the IUCN and the World Business Council are working together on a joint guide on the biodiversity convention for businessmen. We cannot claim for business that we have fully understood the biodiversity convention. And we will later on this year come out with a joint guide to business people on the biodiversity convention. We are trying to understand what this means more for the business community and today we are not knowledgeable enough to some extent on these issues.
Question:
I would ask you what kind of things business can do for biodiversity besides ..........
Answer:
Well, that's a very broad, broad question because you really have .....specifics to be able to answer that question. We are trying to live within the framework that society is giving us to be..... We are trying to understand with the help of IUCN what .....biodiversity convention really, really saying. I think that's distorting for me. We are in the learning process.
Question:
If I can just ask a question myself, to sort of redirect ......trade.........We just heard in the plenary sessions fairly strong complaints that the World Trade Organization is really not, is really still refusing to take environment into account. What is your organization .....businesses concerned about the environment doing to put pressure on governments and world trade organizations to take the environment.......
Answer:
Well, first of all, we believe strongly in the value of free trade. I mean, that's a starting point. We are concerned about the lack of connection between the multilateral and environmental agreements and trade laws. Because, we think that leaves an unclarity. And, it leaves an unclarity, what type of laws is going to take the upper hand in a particular situation. We are working actively to try to define the bridge between the trade law and the environmental law in the multilateral and environmental agreement. We don't have the solution yet, but we are actively trying to find the solutions for help to bridge these two things. We don't think that one of the two is, should take an upper hand of the other. We are trying to find a bridge between the two.
Another panelist:
If I could follow on from that question. One of the really serious problems that we're facing in trying to integrate trade and environment is the extraordinary lack of capacity that exists to do that or to understand the issues, follow the issues, negotiate the issues both among governments and non- governmental organizations and both North and South, although particularly in the South. And for that reason one of the top priorities of my organization in partnership with IASD is to launch a new initiative capacity building for trades and sustainable development. This initiative is being launched this year and it's aimed at capacity building in the broad sense. In other words, it's not simply providing training courses for trade officials and environmental officials on trade issues, it's really looking at what you would have to do in each country or region in the South to have the capacity to deal effectively with these issues.
You probably don't know the World Trade Organization very well, but they announced in Singapore that in an average week at the World Trade Organization there are 46 meetings going on. So, for a country with a small diplomatic representation in Geneva, it's impossible to follow what's happening in WTO effectively. Only 2/3 of the developing countries have any representation whatsoever to the WTO and over half of those have only one person dealing with the WTO, usually not even full time. So, that's contrasted with the United States that has 12 people full time in Geneva on WTO alone. So, it's not surprising that the WTO agenda is becoming unbalanced, very much the disfavor of the southern countries. So this initiative is aimed at trying to correct that situation somewhat and to bring us to the point where the southern NGO's, the southern countries, in fact all of us, are literate on the environmental issues relating to trade, understand how the trading system works and can therefore have, we hope, a considerably greater impact on the course of events.
Question:
My question is to you. Many businessmen in Latin America ..... concerns .....
Answer:
There is clearly a very serious risk of protectionism in the name of the environment. From our point of view we are very much against protectionism in any form whether it's called Green or in any other form. And, we are very concerned that people will be using things like Eco-labeling and other ways as protectionism against free trade. And I can assure that from our point of view, from the World Business council we are very much against that. But there is always a risk when you give people a chance and you open the door. And the moment you start to tamper with free trade and you start to change some of the trade rules that are protecting free trade, that you give people a chance to put in protectionism. And there is always the risk and I agree with what Mark Hall is saying, that the strong nations, the rich nations, they always have an upper hand in this.
We are trying to keep the free trade system going and with no Green protectionism. We are very much against that.
Another panelist:
If I may add something to that. One of the difficulties of this debate is that the trade community acts as if when there is a risk of protectionism the argument is closed. And the environment community acts as if when there is a risk of environmental damage the argument is closed. Neither of those cases is true. There is balancing that is needed between trade goals which are not absolute and the environment goals which are sometimes absolute. And that is the difficulty of the balancing. What is important is that the environmental interest be adequately and clearly represented. I think that's one of the issues we're confronting following Singapore.
When it is clear that the process in the World Trade Organization has led to a stalemate. I think the stalemate arises from the fact that the environmental interest is not sufficiently articulated. That has led some of us to suggest that we need a standing conference on trade and environment to articulate that interest which is useful to both the trade and the environment.
Let me say one more thing, it's sometimes shocking to people in the trade community to think that there are values you can't trade off, so to speak. And let me give you two examples. It is inconceivable to me that there can be discussion about trade liberalization versus protection of the ...... ozone layer. It is inconceivable to me that we would trade off trade protection against the protection of clearly endangered species. Consequently I don't think there is an issue between the ....... in the trade regime. I don't think there is an issue between .... and the trade regime. If article 20G of the GATT has any meaning at all, it clearly covers those two agreements. And I think getting these issues out on the table, getting them clear, getting them articulated, people understand it is absolutely essential for finding an answer to these problems which are serious. Yes there is a risk to protectionist .... No, that doesn't ........
Another panelist:
You know, we should remember one thing, in Agenda 21 there's a clear call for trade and sustainable development to be made compatible. In the agreements that concluded the Uruguay round there is a clear statement in the preamble of the agreement setting up WTO that the goals of trade liberalization and sustainable development should be made compatible. So, it's not as if we are arguing for the trade community to accept sustainable development. They've already accepted it on paper. But what we're trying to do now is find a way to make that real because in the absence of it becoming real, trade liberalization proceeds anyway. It's just that it often proceeds at the expense of the environment or at the expense of developing goals. So, it's not as if trade is paralyzed and environment and development is paralyzed and we have to break down the log jam. Trade liberalization is proceeding anyway and the environmental goals are being sacrificed. So, our aim is to try and bring back into center stage that formal commitment made by governments both in Agenda 21 and even in the trade community's own forum.
Panelist:
Let me add that I agree very much with what ........ was saying. I think that was a very, very good statement. But, I think you will be able to find among the business community people that will disagree with what was said. But, I would say from the World Business Council we very much agree with that statement which is what the responsible part of the business community is saying. But, there are people in the business community that will argue against, for instance this issues that you mentioned on ozone. But that has not got our support.
Question:
(Could not hear)
...Green protectionism, this issue of using environmental concerns to mask trade protectionism. Analysis that have been done have shown that it's still at the current time a very tiny proportion of protectionism per say. Dirty brown protectionism, the classical trade protectionism is still a far bigger problem. The WTO itself last year produced a preliminary assessment of the effect of environmental regulations on market access in developing countries. And that preliminary assessment was that the effect was very small .......market access.
Okay, it was preliminary but I do feel that this is -- there is a risk there, I'm not denying it, but I think the risk has been exaggerated in many people's minds. We do need more analysis here. We do need safeguards against it. But compared to the other forms that exist of protectionism which exists in the world today the Green one is a very small part of the problem.
Panelist:
If I could just add, in addition to the scheduled panel members this is ..............
We also have Charlie Tharp (?), Worldlife Fund for Nature, and Bjorn Stinson (?), World Business Council for Sustainable Development, for those of you who just got ......
Next question.
Do any of you want to make a comment?
Comment:
If there had not been unexpected traffic problems in Rio de Janeiro today -- I understand there's been some kind of explosion. You would have had a report ..... environment from the World Business Council. It is a truck somewhere between the airport and here. I will -- when that truck arrives, I hope it was not that that blew up -- we will put that report out here in the press room so that you can pick it up and you can read further about how we see these issues. I apologize for the fact that it has not arrived. There was some other reports that my colleague over there .... if you're interested in them. But trade and environment report will arrive at some point in time.
And I can tell you that getting things through customs, a simple report like ... is a far bigger entrance for trade that some of the environmental issues that we're dealing with.
Glad to hear the customs officials are reading it.
Comment:
Could I just say one more thing about this idea of a standing conference on trade and environment. We all know that World Trade Organization is a very powerful, very influential organization and the environmental counter-weight, if you like, to that is both dispersed and weak. The UN environment program which has a mandate for looking at the effect of trade liberalization on the environment currently is going through a very difficult phase. It's badly under funded. It's in an institutional crisis, and I don't think that it's -- although we all would like to see it revived and strengthened, it seems very unlikely that UNEP will ever be in the position where it can provide that kind of counterbalancing influence, a coherent voice from the environment to, on the trade debate.
So, this proposal that we have floated here in the plenary today and now with you is to create a kind of standing forum that will pull together at the different parts of the environmental regime internationally. So that UNEP of course would be there very centrally, but so would the secretariats of the environmental conventions. UNCTAD, which has a mandate for trade, and environment and development. So, too, for example the OECD, the NAFTA Council on Environmental Cooperation and others. And the idea there is to have a forum where a coherent environmental position can be put together and fed into the WTO system so that there's a better sort of balancing of influence.
Also, it would be a forum where the environmental position can try to reach a consensus around the issues that are being discussed in the World Trade Organization. So that instead of having a unified trade regime and a scattered environmental regime and the environment losing out, there'd be some effort to pull together a consolidated environmental voice. so, we hope that if this idea moves forward and gains support in currency, that we will have taken a big step towards making the trading system compatible with the environment.
Comment:
Just very briefly, another initiative which already exists is an expert panel on trade and sustainable development that WBF has created. We secure funding from four environment ministries, three development corporation agencies and the European Commission to put together 18 people in a room: six people from the trade community, six people from the environment community, six people from the development community. They range from the Swedish Ambassador for environment to developing countries NGO's who represent indigenous peoples of the Philippines. It's a multi-stakeholder group that includes business, it includes lawyers, it includes scientists. And they are trying to work on the very concrete problem of putting trade, which is currently unsustainable onto a sustainable basis. They meet twice a year and a session, the last, was in Cairo a month ago. I have a three page update of that. I'm happy to give that to anybody who's interested and to talk more about it afterwards.
Thank you very much for coming.
...........................................................
Additional comments after formal session:
... the government for ..... was advocating expanding the ISO 14000 and I wanted to ask him, do you know what he was talking about expanding it to what, or ?
Well, I lost ......I really don't know what .......
Okay.
Because, ISO 14000 is an accepted standard. It's -- each company has to agree on what it needs in performance .... towards improvement. But I wasn't quite sure what he meant, but .....
That's all right. Okay. all right.
Do any of these people, are newcomers of the World Council get any kind of, I wouldn't say training, but any kind of input, information, case studies or what you have -- what experience do you have in environmental business.
We have, there is a business council in Argentina. And the Argentinean Business Council has been a model for many of the other countries. We are holding....
They are not doing a little. You should talk to them a little bit more.
The question is, how much is much or less. That's the question because as a business man you probably are right to say that many things doing better than before. And that is a good mark. Perhaps the ....is that ...background that we are carrying on is so bad that it's not enough. If, for instance, ........the Thames is clean up. It took 10, 20 years, a policy of restricting the pollution of companies. Okay, we have example in Brazil, ...... and Argentina. Nothing..........so, if you take those policies you can say that in our countries ..... are still making the first pace, first steps. And, perhaps on the view of the business men that first steps are very important.
I sometimes say there is an equation: satisfactions = performance - expectations.
You can be more or less satisfied depending upon how high expectations you have raised. How you performance is. When I look at a number of the developing countries, for me that fact that you create the Business Council for Sustainable Development ........but like in Argentina they meet on a monthly basis a number of .... companies that take on a number of issues. They start to do things. They are discussing with the government, they are trying to move things forward. To me, is a very good sign. We can then debate the level of our expectations. And there is also something that I often meet in the discussion, and that's the time ...... We forget many of these issues take a long time.
But, I still think that what the Argentinean business community has done, in my eyes, is that they have started to take these issues, the members of the business council there taking it serious. What we are doing for Argentina is that we are trying to bring people from other parts of the world that are working with these issues here to talk now to the new Brazilian Business Council about what they have been doing, showing samples, trying to learn from each other. We have a global network. So, we are trying to take good cases. I always believe that ........
And if you will look in our records that we always try to focus on cases. Because when you talk about these things ... but I'm letting you really get into case studies and you show to us, this is what company X has done, then company Y will do it. And especially when you ..........the important thing is what the next door neighbor does. If your colleague next door starts something good, then you will do it. That's the way you have to get the learning process ....... if you invest in making some environmental improvements....
I'd like one last question. I'm a Brazilian company. I'm just a newcomer and I've found an interesting case that would apply to my company in Sweden. How do I get details of their experience? Maybe my company and their company are in the same market, internationally competing? How far does the sharing go?
It goes very far. I mean there are, of course, certain things that sometimes are trade secrets. But, business communities try to make environment not the competitive issue. We can compete in many other ways. But if we don't cooperate on this issue, we will hurt ourselves. So, we are trying to share good experiences.
Is that a fact or expectation?
Well, it's both, depending upon what business sector you look at and what part of the world you look at. If you take the chemical industry, as an example, because they started early in their responsible care .... And I think they have done a lot and I think they deserve a lot of respect for that.
Other industry sectors have not come as far. But the responsible care program is being looked at as a model for other industries to start looking at and say can we do something similar? We are at the moment discussing can we find a responsible care program for the forest, for the paper and forest industry? In a similar way.
There is a lot to be done. I'm not claiming the business community is .... We have done.... But I strongly believe that in the last five years the business community has done more to change that any other part of society.
And I'm very willing to debate that, but that's my strong belief. I was here 5 years ago and when I look at the amount of change and my problem is that one of my jobs is to try to tell those stories to the world and make the world understand that there is this enormous change going on. But some of it is in the process. And you as journalists won't believe it until I'm able to give you figures and give you the very hard facts. And I'm not telling you should believe me, but I'm telling you my view is that industry has changed more than any other part of society.
What is your personal business? Where are you in .....
Now I'm 100% the head of the World Business Council. But I have for 28 years been working in different businesses. I started out in the shipyard and heavy construction machinery business. And then I was for 11 years in the welding business, welding equipment. I was a director of my company in Brazil, but I don't speak Spanish or Portuguese. And for 10 years I was I was president and chief executive of a multinational company which was the world's biggest supplier of environmental .... technology. We had 4 billion dollar turnover, 25,000 people, 110 companies, in 35 countries. So I sold environmental control technology for 10 years as a world's leading..... I've heard all the arguments you want to hear about........
My company was bought by ABB. I was executive vice president, I've been a member of the management of ABB. And then I left ABB and I've been running my own company for a time....... then two years ago I was asked to take this role and be the business spokesman ....
Joan Veon:
May I ask a question? Excuse me. I had an interview, I couldn't grab everything. With regard to the Business Council for Sustainable Development, if you take a look at the net worth of the largest corporations in the world, what percentage are part of your business council and how does that compare to all the companies in the world? There's got to be some figure for large, small, middle ....
That's a very good question and I wish I had an answer to because I actually would like to find out, honestly. But, we have a fairly good portion of the list of the biggest corporations in the world. We have a fair share of the biggest corporations. But, we are 125 members and we don't want to be more than 150. And you cannot ...
JV:
By members, you mean corporations?
Yes. Represented by their chief executives. You cannot apply for membership. Membership is by invitation. And we want to spread across sectors, across countries before we invite another company it has to be approved by the other members so that there is a company that we believe is living up to the type of standards that we think it should have. We don't have the mathematical description of .... we ask the companies that are in the same industries is this a company that you would like to see as a membership or would you be embarrassed if this company came aboard as a member?
Q:
Is the Insurance Industry being merged into this group? And I'm thinking separately, fire, casualty, life, industry....
We have insurance companies as members. Five years ago when the UNCED happened there was not one single representative of the financial community that wanted to be a member of the business council. Not a banker, not an insurance company, no one. Totally uninterested. They thought environment was something that didn't really belong to their sphere. Today, we have a number of banks and a number of insurance companies that have come aboard. We have a Norwegian insurance company, Stor-Brandt (?). We have Gerlig (?) in Germany. We have Agif (?) in France. Soreg (?) Insurance in Switzerland. ...... in Japan. And very interesting, we have our first member who is one of the leading fund managers, pension fund managers, Scudder, Stephens and Clark in the U.S. And what we see happening is that pension fund managers, and as you know they represent an enormous power when it comes to financial needs, all beginning to say, hey, wait a minute, Sustainable Development is something that is going to effect the long term value of our pensions. And we better start to think very seriously about this because we are in there for the long term. Many other players are in for the next quarter and for them sustainable development doesn't have a meaning.
JV:
Do they understand sustainable development? Or just the business side?
Answer:
How many understand sustainable development? That's a very difficult question for people to understand. But I think -- what I find is that the pension fund managers are beginning to think very seriously about this. They say, hey I've got to pay out pensions in twenty years time. What does the world really look like? Certainly environment will influence the value of a pension. So how do we take that into account when we now are investing our money. That has got to be a very powerful lever, so the insurance industry and pension fund managers are starting to come into this.
Another thing that is happening is that we are beginning to see companies from countries that have not earlier taken part in this to come in. We have our first member from Russia and we have our first member from China. You can then say, what about the good guy? If we are an organization of the good guys, we have Gosprom (?) as a member. And as you know, Gosprom (?) is the leading company in Russia. If you want to engage the Russian business community you must have Gosprom (?) as a member. And in China we have Cynopec, which is a chemical company in China. They have 84% of the Chinese market for petro chemicals. And if you do not have these people on board, you will not reach out to the business community in Russia and China. We have now these companies on board and they have started to take as serious.
I was a keynote speaker in December in Moscow for the first all Russian conference on Sustainable Development. There are many more things happening than people are aware of and that's within the international business community.
JV:
Do you interface with IOSCO and the BIS? And, also did you just have a meeting in -- the World Business Council, the World Economic Forum -- is that different -- the World Economic Forum is different from the World Business Council?
Answer:
Yes, that -- the World Economic Forum, that's Davos....
JV:
Davos
Answer:
Yes, that's basically a platform. I mean they are not -- it's an organization that creates a platform for dialogue. We are an organization that is a business advocate. We are talking about sustainable development from ...... And......
(Two gentlemen speaking at the same time about chairman and vice chairman of World Business Council.)
The chairman of WBC is a two-year term. The Chairman right now is ............(?).......Yes, he's our chairman for 96-97.
Since when? I don't get it.
He's been chairman for a little over a year. He's been chairman since the beginning of '96.
JV:
So, he's got 9 months left.
Answer:
(Laughter) Yes.
3m invented affirmative policy. The three R's. Everybody talks about recycle....
PPP -- prevention, pollution, pace. That's what they call their program.
JV:
How are you facilitating public-private partnerships between countries, NGOs, governments?
Answer:
I'm trying hard here. I'm doing my best! (laughter) But it's not easy. I'm trying hard.
JV:
We just got down to the meat and the soul of the whole thing!
Answer:
I said the first day there was a plenary after his sessions which was focused on the individual parts of .... stakeholders. I said that what I find is that when we start to get serious about partnerships, whether it is with government, whether it is with the United Nations, whether it is with international organizations, or it is with NGOs, they back off. They all talk about that they want partnerships and they want cooperation, but when we try to really establish it, they say, okay let's now get down to earth. Let's now start to work together. Then they don't dare. Neither governments nor the UN, nor the international organizations, nor the NGOs, they don't dare to get into really doing things. They talk about it, they say want it, but in reality they are not stepping up to the table. And I said it quite publicly ......
The NGO community is also a very diverse community. It's like the business community, it's very very diverse, so one should be careful ......
You have a rather big group among the NGOs that are based upon the fundamental idea of confrontation with the business community. So, it's not in their fundamental belief, or business idea, if you want, to have a cooperation. And I think that the world is changing from a situation. We have for a long period, we have been in an era of awareness creation. Creating more awareness about the environmental issues and sustainable development. And ....... We don't need more awareness. We need action. We need solutions. And that means that the NGOs, many NGOs have a very difficult transition. Because, they have to move from being organizations of awareness creation to be organizations that take part in solutions. And that's a very very difficult transition.
I have all the respect for the problem that they stand in front of. And you see, that is why it's so difficult for them sometimes to get into partnerships. Because, we from the business community ... the way we are used to work we are used to action. We talk and then we do something.
JV:
But it's also more than a cultural problem. Because you have just, I think hit probably, as I have been analyzing this, trying to look at everything. What I see is a power, a power differential. Let's face it, corporations have the money. All right? They have the whole staff, they have the whole structure. And so now you've got an NGO depending on the kind of NGO, and I'm not talking IUCN or WEDO. I'm talking a smaller, perhaps NGO. I would think they would be intimidated, to be honest with you.
Answer:
Yes, I think that's probably true. But I think that's probably more a mental than, a mental state of mind than a reality. Because, in today's very transparent world, even if you are not very big NGO, they have a lot of access to the publicity, not the least via you. And so in a transparent world you don't have to be General Motors to get a lot of publicity and to put a lot of pressure in a situation. So, I agree with you on what you're saying. I'm not disagreeing with you. But I think honestly it is more a state of mind among the NGOs than it is a perception from us.
JV:
Everything in life is a state of mind. Including marriage, sometimes. And I don't mean disrespectfully, I'm just saying it's all up here. But, at the same time when you talk about transparency, transparency is not necessarily transparent.
Answer:
No, but .. and I sometimes meet that question about transparency at the business community. And I'm saying, having run a multinational company, if you look at the amount of regulation, the number of governments, auditors, all the different things you have to report and live up to, it's a miracle that these organizations are able to do business and actually function. I don't, cannot find many other organizations in the world that have such a high amount of transparency as multinational organizations. You have codetermination in many countries. You have the unions on the board. I come from a country where we had four board members from the unions with equal rights, equal authority as any other board member. If you live in that situation and someone comes up to you and says, you are not transparent. (Laughter)
END OF TAPE