APPENDIX 10
Memorandum from the World Development
Movement
INTRODUCTION
The World Development Movement (WDM) welcomes
this Environmental Audit Committee inquiry. WDM is an independent
research and advocacy organisation with 8,000 members, 20,000
supporters and 100 local groups across the UK, operating as a
democratic membership organisation. WDM's aim is to ensure that
the policies of governments, international agencies and companies
towards developing countries promote social and economic justice,
sustainability and respect for the rights of vulnerable and disadvantaged
people.
WDM undertakes research, provides information
to the government and Parliamentarians, and educates members of
the public on the importance of ensuring that the policies of
the UK, EU and multilateral institutions promote rather than undermine
sustainable development. Since its establishment in 1970, WDM
has campaigned for changes to policy on aid, debt, trade and the
regulation of business, including a prominent role in promoting
the integration of poverty and environmental issues in the 1992
Rio Summit.
The first two sections of this submission provide
background on the context within which WSSD took place and the
outcomes that are crucial to the achievement of sustainable development
internationally. The following sections then focus on the key
questions outlined in the EAC's call for evidence.
BACKGROUND TO
THE WSSD
1. The past two decades have seen a crisis
in the economies of sub-Sahara Africa. Over the period of 1980-2000,
average per capita income declined by 15% in real terms. Sub-Saharan
Africa as a whole sustained a fall greater than that experienced
by any industrialised country during the Great Depression. Development
has also stagnated in Latin America. Apparent progress on poverty
reduction globally has been almost entirely due to development
in China, a highly regulated economy. Under current conditions,
many of the world's poorest countries will not only fail to meet
the Millennium Development Goals, but will suffer increasing levels
of poverty, as well as growing incidence of HIV/AIDS, climate-induced
crises and environmental degradation.
2. The promised benefits of structural adjustment
programmes, liberalisation, open trade and globalisation have
been illusory from the perspective of the poor. Such benefits
as there have been have been far less than promised, and unfairly
distributed—most has been captured by the rich world, through
large corporations.
3. Agenda 21, signed at the Earth Summit,
contained many promises of support for developing countries—more
aid, technology transfer, preferential trade terms and foreign
direct investment. But over the past decade the rich world has
failed to deliver on its promises. Amongst the tangible commitments
was the EU's promise to increase development aid by Ecu 3 billion.
But in subsequent years the aid budgets of key EU member states
were slashed. It is little surprise that developing countries
are sceptical of the EU's latest promise for more aid, made at
the UN Financing for Development conference in Monterrey in March
2002. Even if these promises are kept, projected aid levels would
still be less than in 1990 and less than half the UN target of
0.7% of GNP agreed 30 years ago.
4. Promises for opening trade to the developing
world were repeated in the World Trade Organisation (WTO) Uruguay
Round, signed in 1994. Developing countries were promised more
access for food and textiles and a reduction in agriculture subsidies.
The rich nations used loopholes to avoid delivery on their promises.
Agricultural subsidies in the EU have risen in real terms since
1994. Undertakings for Special and Differential Treatment in favour
of the developing countries have been routinely ignored.
5. The promises to take action on the environment
were also not fulfilled. Carbon dioxide emissions from the industrialised
world that is responsible for over 80% of emissions have risen
since 1990, instead of stabilising—the US by 11% and the
EU by 6%. Developing countries are bearing the brunt of sea level
rise, flooding and climate instability. The loss of biological
diversity, fish stocks and old growth forests has continued and
there has been little progress in combatting soil erosion, desertification
and over-use of freshwater.
OUTCOMES
6. It is scarcely believable that six months
of negotiations and the assembly of one of the world's largest
gathering of world leaders could result in so little. Beyond the
platitudes, the only tangible target agreed at the Summit is to
halve the number of people in the world without basic sanitation
by 2015, joining the other targets already agreed in the Millennium
Development Goals. A lack of sanitation is a major contributor
to poor health and the deaths of over 1.3 million children under
the age of five each year. The sanitation target is therefore
vitally important, but like the other MDG targets, lacks the money,
policy reforms, institutional responsibility and follow through
to make it happen. Other targets on toxic chemicals and fish stocks
agreed at WSSD represent vague aspirations, rather than tangible
targets.
7. This highlights one of the major failings
of the WSSD. The so-called "Action Plan" is devoid of
the mechanisms necessary to translate a political aspiration into
the actions on the ground that will make a difference to people's
lives and the environment. For a Summit that was billed by governments
as "action-oriented", this is a major failing. There
has only just been enough political agreement to recycle existing
agreements, but clearly not enough political will and commitment
to take action. This repeats the failings of the 1992 Earth Summit
in Rio de Janeiro. Its Agenda 21 included many good policies on
sustainable development, but no means for implementation. Ten
years later, governments have again failed to agree a credible
action plan.
8. Most of the agreement signed in Johannesburg
consists of wording that has been agreed previously. It is an
indictment of the petty politics that has crippled these negotiations
that much of the time and energy of negotiators and NGOs was wasted
in preventing backsliding from existing agreements. The US was
a prime offender, predictably in the case of their opposition
to the Kyoto Protocol (the US has not signed) and the Precautionary
Principle (used to restrict trade in GM crops). Beyond these issues
they consistently blocked progressive proposals and undermined
the legitimacy of the United Nations.
9. Progress was made on one issue. Strong
lobbying by NGOs, led by Friends of the Earth, put the issue of
corporate accountability onto the WSSD agenda, despite initial
opposition from US, EU and others. The agreement includes a paragraph
including "Actively promote corporate responsibility and
accountability, based on Rio Principles, including through the
full development and effective implementation of intergovernmental
agreements . . .". Despite the attempt by the US to deny
it, this means that international agreements to regulate corporations
should be developed, a long standing demand of WDM and other NGOs.
10. The only other positive outcome on trade
was the strong developing country rejection of the EU's attempt
to spin the current WTO negotiations as good for development—references
to the Doha Development Agenda were changed throughout the text
to the Doha Agenda.
11. Much was made of the launch of partnerships
as a means for implementing sustainable development. However,
these can be used as a mechanism to deflect criticism over the
failure of governments to deliver. They have labelled partnerships
involving corporations, governments and major groups as an outcome
of the conference (so-called "Type 2 partnerships").
There are some good initiatives, but the list of 218 includes
many that are ongoing initiatives; others are little more than
talkshops; and yet others are small and will have little impact.
12. Other partnerships are more dangerous.
For example, the multinational water companies that account for
over three quarters of private sector water supply, Vivendi and
Suez, are involved in the some of the largest water partnerships.
The interests of water companies were promoted through the inclusion
of Vivendi on the EU delegation and Thames Water on the UK delegation.
13. Throughout the Summit, the strong influence
of business on the positions of the rich nations was apparent.
The EU and other OECD nations pushed private sector financing
as the only way to provide enough funds for infrastructure in
the developing world. Yet the total of agriculture, fisheries
and energy subsidies total around $600 billion. Ending corporate
welfare in these sectors would reduce environmental damage, stop
destroying the livelihoods of farmers and fishing communities
in the developing world, and benefit consumers. The diversion
of a fraction of those subsidies would be ample to provide public
funds for the supply of essential services such as water, electricity
and communications in the developing world, as well as investments
in health and education.
14. The commercialisation of services such
as water is not only being pushed by the US and EU in the WTO's
General Agreement on Trade in Services (GATS), but was also the
only significant initiative launched by British Prime Minister
Tony Blair at the WSSD. The initiative includes the use of aid
funds for "the creation and structuring of infrastructure
opportunities in developing countries, and the offering of those
opportunities to the private sector . . .".
15. While debates rage over the proper regulation,
ownership and accountability of public services in the UK and
the EU, the British government is using the WSSD to open up public
services in Africa and promote the interests of its companies.
Clare Short, the British International Development Secretary,
told the UK House of Commons on 19 June 2002 that "Privatisation
is the only way to get the investment that those [poor] countries
need in things like banking, tourism, telecommunications and services
such as water under good regulatory arrangements." When combined
with the privatisation agenda of the World Bank and IMF, such
initiatives by bilateral donors become effectively mandatory.
This undermines democratic decision-making by sovereign governments
and local communities.
16. Governments have tried to claim credit
for partnerships, using them as a smokescreen for government inaction.
As with the plethora of "corporate social responsibility"
initiatives, voluntary agreements have become the way for governments
to argue that they do not need to provide public funding or to
regulate business at the local, national and international level.
17. As the Norwegian Minister of International
Development, Ms Hilde F Johnson commented in Bali, "Why are
we here if the only tangible results from the Johannesburg process
will be Type 2 partnership initiatives, financed from existing
ODA flows, with no additionality, putting "green paint"
on old projects, or launching new ones primarily directed towards
show-offs and flags for donor governments, undermining national
ownership and coordination in the poor countries?"
18. In summary, the list of WSSD successes
is short: a sanitation target, recognition of the need for international
agreements on corporate accountability, and some partnerships.
The list of failings is long: WSSD has merely recycled words from
existing agreements, agreed only one specific target, provided
no credible action plan and systematically undermined the role
of governments and the multilateral system. The claims of a great
success at WSSD represent rhetoric and PR spin.
19. There were no specific commitments on
the priorities clearly stated by the developing countries—no
extension of debt cancellation, no timetable to meet the agreed
UN target for aid, no progress in persuading EU partners to reduce
their subsidies that impoverish small farmers and fishing communities
in the developing world. A summary is included as an Annex to
this submission.
THE ROLE
OF THE
BRITISH GOVERNMENT
20. Performance of the UK delegation at
the Summit: While the US clearly obstructed progress on issues
such as climate change and the sanitation target, they do not
deserve all of the blame for the failings of WSSD. The EU abysmally
failed to fill the vacuum left by the US and its missing President,
to provide leadership of the OECD countries. They could have joined
with developing countries to isolate the US, forcing them to make
concessions. But the EU was hamstrung by its internal disagreement
on agricultural subsidies and the priority that member states
accorded to EU corporate interests. On several issues, the UK
delegation was constrained in being able to play a constructive
role by being required to act within the policy of the EU throughout
the WSSD negotiations.
21. As expected, the most contentious negotiations
at WSSD were on trade, finance and globalisation. Strong lobbying
from NGOs was needed to prevent a proposal to give precedence
to the WTO agreements over international environment and development
agreements. The EU on this issue, as with many others, claimed
to support the priority of sustainable development over trade
rules, but it became evident that they were prepared to trade
off this position in negotiations.
22. One of the most striking examples was
in negotiations over the relationship between multilateral development,
social and environmental agreements and the WTO. The US sought
to ensure that WTO rules would take precedence over provisions
of agreements such as the Kyoto Protocol and the Biosafety Protocol
and proposed wording for inclusion in the WSSD chapter on trade.
The wording in the compromise text of 6pm on 31 August was to
"continue to enhance the mutual supportiveness of trade,
environment and development in a manner consistent with WTO rights
and obligations . . ." (italics added). This was agreed by
the EU, even though the British delegation was aware that it would
change the relationship between WTO agreements and other international
agreements to give precedence to the WTO. It appeared that this
formulation, inconsistent with EU policy, was a trade-off for
removal of references to agricultural subsidies in the text.
23. Even though the working group chair
presented the compromise text as a "take it or leave it"
option in its entirety, NGOs lobbied strongly against it. Late
in the night, Dr Tewolde Egziabher of Ethiopia made an impassioned
speech in the closed negotiations to defend the interests of biodiversity
conservation and the rights of poor communities against the commercial
interests of the industrialised countries. His intervention was
crucial and resulted in the G-77 calling for the phrase to be
deleted. Eventually the EU and others agreed.
24. Even though the deletion of this phrase
was extremely important, it meant only that the status quo was
maintained. Elsewhere, the WSSD was not able to deal with the
need to integrate economic issues into sustainable development
because of the insistence by the UK and others that any references
to trade merely reflected the current WTO negotiations initiated
in Doha. This means that the WTO is able to discuss and negotiate
on sustainable development, usually by ensuring that its provisions
do not act as a barrier to trade, but the UN cannot include wording
on trade that is not consistent with WTO negotiations. This effectively
means that sustainable development is subsidiary to trade rules,
rather than the reverse. Trade and the rules of the WTO should
be a means to implement sustainable development. This was a major
strategic flaw in the UK's position.
25. On finance, the Chancellor has played
a leading role in calling for additional financial resources to
support development. However, from WDM's understanding, this was
not pushed by the UK delegation within the EU or elsewhere in
negotiations. Such a position would have enabled the EU to have
proposed delivering at least on one of the core issues clearly
signalled by developing countries.
26. The UK delegation held regular meetings
with civil society groups on a daily basis. These meetings were
welcomed by UK civil society groups. However, there was little
information shared in these meetings that was not otherwise available
and widely known. NGOs received most of their information from
other sources, including briefings by other delegations that were
more open in inviting comments on negotiating drafts.
27. How commitments made at the Summit should
reshape UK policies: The agenda at WSSD was rightly dominated
by the relationship between the three "pillars" of sustainable
development: social, environmental and economic. As in Rio 10
years earlier, the key issue was how a UN conference on sustainable
development could exercise any influence over the crucial economic
instruments that would harness them to support, rather than undermine
sustainable development. WDM's mandate is on the impact of UK
and EU policies on sustainable development in the developing world
and our recommendations reflect this focus.
28. As WDM has commented previously, UK
policies on sustainable development are undermined by its policies
on international trade. The recommendations of the Environment
Audit Committee's Second Report on World Trade and Sustainable
Development have not been implemented. In WDM's view, they remain
crucial to ensuring that trade policy supports sustainable development,
notably:
— "The case for a comprehensive
round has yet to be made convincingly"
— "We fail to see from our evidence
what has changed since the Uruguay Round that rules out the danger
of another "stitch-up" by developed countries as described
by the Environment Minister"
— "The scope and progress of negotiations
should therefore be liked in a concrete way to achievements in
capacity-building programmes rather than simply relying on the
provision of inputs to the process"
— "We remain unconvinced of the
need for multilateral rules on investment and wary of the risks
that were identified for us during our inquiry into the OECD multilateral
agreement on investment (MAI)"
— "We are concerned that once
again environmental considerations have not been integrated onto
the development of "mainstream" policy proposals but
left to a later stage in terms of both preparatory analysis and
strategy development"
— "We regret to hear that the
House has been asked to approve the Government's proposals for
Seattle, on the back of the European Commission's position, without
a full debate in the Chamber . . ."
29. These recommendations are still valid
in the context of the current World Trade Organisation (WTO) negotiations.
These are likely to set the economic framework for rules for decades
to come, not only on external trade measures (such as tariffs
and quotas), but on how governments are allowed to regulate their
domestic economies. The most economically important and far-reaching
of the WTO's agreements, the General Agreement on Trade in Services
(GATS) primarily deals with government regulations. The aim is
to remove "barriers to trade"—however, these "barriers"
often constitute regulations by national and local government
that aim to promote sustainable development. Since GATS is enforceable
through trade sanctions, its provisions would take precedence
over domestic regulations. GATS therefore has a major potential
impact on sustainable development in developing countries and
globally through service sectors such as tourism, water and other
environmental services, retail and distribution, energy and transport.
Details are included in WDM's report "GATS: A Disservice
to the Poor", available on WDM's website www.wdm.org.uk/cambriefs/gatsdiss.pdf
30. Although the provisions for GATS call
for impact assessment, no adequate social, developmental or environmental
assessments have been undertaken. Yet the EU and other WTO members
have submitted sweeping "requests" to developing countries
to submit services such as water supply to GATS, even though it
is clear that they do not have the capacity to undertake the research
and assessment of the likely impacts on their economy, the poor
and on the environment.
31. GATS is not only enforceable on developing
countries—the UK has also made extensive commitments and
is being called upon to make further commitments by the end of
March 2002 that would have a major impact on sustainable development.
The Department of Trade and Industry has initiated a consultation
process, but without the crucial information that reveals the
nature of present commitments or the extent of the requests filed
by the US and other countries. To redress this lack of information,
WDM has produced a report "Serving (up) the Nation",
available on WDM's website www.wdm.org.uk/cambriefs/Serving (up)
the nation.pdf
32. The government's strategy on sustainable
development fails to incorporate the impact of GATS domestically
or on the developing world. Nor has there been any systematic
effort to incorporate sustainable development into the provisions
of GATS. As a result, there is growing civil society concern over
its likely impact. Despite an Early Day Motion signed by 262 MPs
in 2001, there has been no Select Committee inquiry and no government
debate of GATS. WDM recommends that the EAC initiate such an inquiry.
33. Similar issues arise with regard to
other WTO negotiations. In particular, the British government
is one of the main proponents of an investment agreement, despite
the recommendations of the EAC in November 1999. Such an agreement
would establish rules governing foreign investment, which now
accounts for more economic output than all of world trade. Such
a massive expansion of the WTO's remit deserves close scrutiny.
Yet the government's sustainable development strategy fails to
examine how such an agreement can support, rather than undermine
sustainable development. And, as with GATS, there has been no
Select Committee inquiry of government debate on the British government's
position on the proposed investment agreement. This will be one
of the most contentious issues for the WTO's Ministerial meeting
in September 2003.
34. Beyond the trade agenda, the other major
area for policy development is in the need to develop a framework
for regulation of international business. This was one of the
key outcomes of WSSD and needs to be reflected in British government
policy, including the strategy on sustainable development and
forthcoming legislation on Company Law.
35. Changes to the EU Strategy on Sustainable
Development: The recommendations for the EU strategy mirror those
above. The strategy asserts that the EU's trade position is compatible
with sustainable development, but without substantiation. An evidence-based
approach to the strategy would incorporate assessment of the past
impacts of trade agreements on sustainable development, incorporating
real world impact, not abstract economic modelling.
December 2002
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