*{ http://www.foei.org/publications/corporates/governance.html
19 juillet 2002

FOEI 2001 }

 *partie=titre Position Paper on International Environmental Governance  *partie=nil
  
 *partie=titre 1. Form Should Follow Function  *partie=nil 

International Environmental Governance will be a major theme on the agenda of the World Summit on Sustainable Development (WSSD), which will take place in September 2002. Initial discussions have focused on the desirability of establishing a new World Environmental Organization, or reforming the existing UN Environment Program (UNEP) into a UN Environment Organization (UNEO). Friends of the Earth International, the world's largest federation of environmental organizations, supports strengthening the UN Environment Program, but we feel that form should follow function. Proposals for institutional reform should be based on an analysis of the main functions (a) global institution(s) should perform in the field of sustainable development. 

An overwhelming amount of policy guidance in the field of sustainable development, including a large number of legally binding agreements, has been produced since 1990. FoEI submits that priority should be given to the implementation of these agreements. Strengthened governance at the global level should first of all be targetted at improved compliance with existing agreements. In particular it should be ensured that transnational corporations and other powerful actors like International Financial Institutions comply with sustainable development agreements, including agreements promoting sustainable agriculture and food security. Sustainable development agreements should override trade and investment rules.

The genuine, effective and equitable participation of civil society organizations from all regions in international environmental governance is a pre-condition for sustainable development. It should also be ensured that all countries are able to participate effectively and that a holistic concept of sustainable development is fostered. We do not support any institutional reform that would weaken the position of civil society and/or developing countries in international environmental governance.

 *partie=titre 2. Functions to be Fulfilled by International Environmental Governance *partie=nil 

Generating active support, including financial, technical and political support, for the implementation of existing agreements and local sustainable development; 
Promoting effective compliance with legally binding agreements in the field of sustainable development; 
Promoting the establishment of legally binding rules on the conduct of transnational corporations, including in the field of foreign investment; and 
Promoting the establishment or strengthening of legally binding agreements to promote sustainable agriculture and food security, including a ban on all forms of dumping and export support, all forms of biopiracy (including patenting life forms), dangerous pesticides and the production and trade in Genetically Modified Organisms (GMOs). 

 *partie=titre I. The generation of active support for the implementation of existing agreements  *partie=nil
  
There are various mechanisms for the generation of active support for implementation. An institution can have its own financial resources to support governments in the implementation of existing international agreements. It can generate such financial support through another fund (eg. the Global Environment Facility). It can also facilitate the establishment of multi-stakeholder partnerships in which part of the stakeholders (eg,. the governmental departments and private sector actors) contribute financially to the implementation of existing agreements. 

Generation of political support can be seen as a precondition for financial and technological support, as decreased political support will lead to low levels of Official Development Assistance and weak policies and regulations in the field of providing access to advanced technologies. High-level meetings (meetings of Ministers), with broad stakeholder participation are seen as an important tool for generating political support. It has been stated that it is essential to involve other Ministers than Environmental Ministers in such a process. However, there are lessons to be learned from the CSD process, which has failed to produce the results once anticipated: It is essential the agenda of the high-level meetings remains ambitious and is not watered down by the most conservative actors in the debate. Also, it is important the debate remains focussed on the implementation of existing agreements, instead of focusing on further policy development, which was the main reason for failure of the Intergovernmental Forum on Forests.

 *partie=titre II. A mechanism to promote effective compliance and dispute settlement *partie=nil 
 
The need for better compliance with existing agreements in the field of sustainable development has been repeatedly emphasized by governments and major groups. A compliance mechanism can be seen as a generic term. It normally includes a mechanism to effectively monitor compliance of governments through national reports that have, preferably, been written by a coalition of all relevant stakeholders. It also includes a mechanism to settle disputes about possible non-compliance. In cases where non-compliance is established, some form of sanction(s) should be imposed. A compliance mechanism can also entail a fund that provides targetted financial support to a country that has reported its own non-compliance2. Effective compliance mechanism should be in place at the time of adoption of any new agreement in the field of sustainable development. A proper balance of incentives and sanctions should be incorporated in such mechanisms.

The ideal mechanism would be a joint compliance body covering a number of sustainable development agreements that still lack effective compliance mechanisms, thus leading automatically to greater coherence between these agreements.

A compliance and dispute settlement mechanism can only be truly effective if it provides for direct access of civil society groups. Compliance committees should be able to use information from independent civil society sources. Civil society groups should have direct access to mediation and arbitration procedures and, in the longer run, the International Court of Justice. The revised rules of procedure of the Permanent Court of Arbitration for Environmental Settlement are an important step forward in this regard.

There is a specific concern that rulings of the World Trade Organization (WTO), which has a dispute settlement mechanism and a range of compliance and enforcement mechanisms including trade sanctions, are undermining the implementation of sustainable development agreements. The WTO has a Committee on Trade and Environment, but this committee has been inclined to look at the negative impacts of sustainable development policies on trade rather than the negative impact of trade policies on sustainable development. The WTO dispute settlement process has been biased in favour of trade liberalization. There is a great need for more neutral compliance mechanisms outside the WTO that would ensure compliance with sustainable development instruments. Sustainable development agreements should override trade and investment rules.

There have been frequent calls for a mechanism to ensure better coherence between the numerous existing conventions in the field of sustainable development. Such a mechanism should be able to challenge WTO policies that are detrimental to achieving sustainable development as well as negate WTO rules that undermine environmental protection agreements. A joint compliance and dispute settlement mechanism covering a number of conventions would be an improvement in this respect. It would also promote coherence amongst national reporting requirements. It should be noted that such a joint compliance and dispute settlement mechanism would have to be adopted by each legally binding instrument that adheres to these mechanisms, so it would require a step by step process. The World Summit on Sustainable Development would provide the right momentum for taking the first step to develop such an ambitious, but badly needed, mechanism.

It is important to emphasize in this regard that without formal compliance mechanisms, enforcement tends to be biased against developing countries as they can more easily be forced to implement international agreements through trade or aid sanctions. Effective, formal compliance mechanisms are thus an important tool to ensure more equitable enforcement of international law.

 *partie=titre III. The establishment of legally binding rules on the conduct of transnational corporations, including in the field of foreign investment *partie=nil 

As Transnational Corporations (TNCīs) are increasingly powerful, they are often in the position to overrule national legislation and trigger corruption, especially in less powerful developing countries. In many cases the annual budget of TNC's is a multiple of the budget of the country they operate in. There is a clear need to establish international legally binding rules to ensure corporate accountability of these companies. Such rules would also address some of the negative impacts of international investment flows and hopefully steer some of this investment in the direction of sustainable development. A reformed UNEP could play a catalyzing role in the development of such a broad set of rules on corporate accountability.

It should be noted that many existing environmental agreements already include legally binding guidelines for TNC's in specific areas, e.g., the Biodiversity Convention (on biopiracy), the Cartagena Protocol (on GMOs), the Convention on Persistent Organic Pollutants (on pesticides) and older Conventions like the Basel Convention on the export of Hazardous Waste. A joint compliance mechanism covering these Conventions would also contribute to greater corporate accountability.

 *partie=titre IV. The establishment or strengthening of legally binding agreements to safeguard and promote food security and sustainable agriculture *partie=nil
  
There is no economic sector facing such a severe sustainability crisis as agriculture. There has been and continues to be a transition from small-scale traditional forms of agriculture that tend to be environmentally and socially sustainable, to large-scale, export-oriented unsustainable forms of agriculture. This transition is by far the main cause of malnutrition and hunger, rural impoverishment, unemployment, biodiversity loss (both within agricultural systems and as a result of the conversion of natural ecosystems like forests) and other environmental problems like the depletion of freshwater resources and point source pollutant loading from the runoffs. 

Unsustainable agriculture is supported by large agricultural subsidies in many countries, especially in developed countries. These countries also provide export subsidies, and support other dumping practices, leading to the destruction of more sustainable agricultural economies in developing countries. Many NGOs and farmers' groups point at trade liberalization in agriculture as a major cause of these problems. That is why they are arguing that agriculture should no longer fall under the WTO regime. FoEI strongly supports the call to take agriculture out of the WTO.

However, there is a clear recognition that other legally binding agreements are needed to safeguard food security and cope with some of the other above-mentioned problems. In particular, there is a need to establish a ban on export subsidies and other forms of dumping. There also is a need to ban all forms of biopiracy, including patenting life forms, and to further strengthen the regimes on pesticides, GMOs, and freshwater management and the conservation of biodiversity within and surrounding agro-ecosystems. The right to safe, nutritious and healthy food should be recognized as a legally binding human right.

It is important to note in this respect that the main UN organization in the field of agriculture, the Food and Agriculture Organization, has been and continues to be a principal force behind the transition from small-scale sustainable agriculture to large-scale, export-oriented agriculture. While the FAO has taken a few initiatives to promote sustainable agriculture, the main legally binding instruments to promote sustainable agriculture (the Biodiversity Convention, the Biosafety Protocol, the POPs Convention) were developed under the auspices of the much smaller UN Environment Program. The upcoming 5-year review of the World Food Summit and the WSSD might form a good momentum to initiate a Commission or Panel supported by an interagency task force with a strong role for the UN Environment Program that can facilitate a process to initiate and strengthen the above-mentioned instruments.

 *partie=titre 3. Institutional Reform and Sustainable Development *partie=nil
  
The main existing institutions in the field of sustainable development are:

1. The UN Environment Program was established in 1974 as a follow-up to the first UN Conference on the Human Environment in 1972. It is based in Nairobi, Kenya. Due to its location and as a program of the UN General Assembly, developing countries are relatively influential and the program pays particular attention to Africa. As a program, UNEP cannot formally implement large projects and its financial resources are limited. It has also gone through very serious management problems in the past 25 years, and while this is improving, the situation is far from satisfactory. However, it has, directly or indirectly, been the main force behind some of the most important legally binding agreements in the field of sustainable development. It also implements quite interesting, but underfunded programs in the field of cleaner production, consumption and biodiversity. It has a high-level meeting process in the form of a (now) annual meeting of Environmental Ministers, which has often formed the basis for negotiation processes on legally binding instruments. 

2. The Commission on Sustainable Development was established in 1993 as a successor to the UN Conference on Environment and Development. The CSD is a sub-Commission of the Economic and Social Council of the UN. It meets annually, and includes both a high-level segment (2 days of Ministersī meetings, normally not only environmental ministers) and innovative procedures for the involvement of major groups, including multi-stakeholder dialogues. Its secretariat has played an active role in integrating sustainable development concerns into other parts of the UN secretariat, particularly in New York, where it is located. Especially the last two sessions of the CSD were seen by many as a failure, as they did not add any positive policy guidance on such important fields as agriculture and trade (CSD8 in 2000) and energy (CSD9 in 2001). There is a clear duplication between the CSD and the UNEP Ministerial meeting in terms of participants and mandate. 

The main politically relevant options for institutional reform in the field of sustainable development are:

A. Continuation of the current situation: a CSD and UNEP. It should be noted that there might be scope to establish some sort of dispute settlement and compliance mechanism under UNEP even if it remains a UN program. 

B. Transforming UNEP into a United Nations Environment Organization. This would imply that UNEP would become an Implementing Agency like the World Health Organization and the Food and Agricultural Organization of the UN. It would probably imply a boost in financial resources, but any other institutional mechanisms, such as a joint compliance and dispute settlement mechanism, would not automatically be part of such a new institution. A question is what would happen to the CSD in this case. There could be a good case for folding the CSD into a revamped and expanded UNEP.

C. Establishment of a World Environment Organization independent from the CSD and UNEP and possibly outside the UN. This would seriously undermine UNEP and the CSD, so it is likely that these institutions would be closed down anyway, through a slow and painful process. It would also undermine the UN in general if an institution was established in the field of sustainable development that did not fall under its auspicious. FoEI believes that all major international institutions, including the World Bank, the World Trade Organization and the International Monetary Fund, should be part of the United Nations, and thus fall under the auspicious of the United Nations General Assembly in which every country has one vote. 

 *partie=titre 4. Conclusions *partie=nil
  
Friends of the Earth International attaches more importance to the institutional functions a strengthened and reformed UNEP/UNEO should fulfil, than to the exact form this institution takes (a Program or an Implementing Agency). We do not support the establishment of a World Environment Organization alongside the existing institutions in the field of sustainable development as it would lead to wasteful duplication of functions. We oppose the establishment of such an Organization outside the framework of the United Nations.

We feel strengthening UNEP/ a UN Environment Organization will only be successful if it: 

- provides effective political, financial and technological support for the implementation of existing agreements; 
- establishes a joint compliance mechanism for the major sustainable development agreements; 
- establishes a joint dispute settlement mechanism for the major sustainable development agreements; 
- assumes a catalyzing role in elaborating a legally binding instrument on corporate accountability of Transnational Corporations; 
- assumes a dominant role in the development and strengthening of a number of legally binding instrument in the field of sustainable agriculture and food security. 

Additionally, there are a number of institutional requirements we feel are essential if a UN Environment Organization/ reformed UNEP is to contribute to sustainable development:

- innovative procedures to ensure effective and equitable participation of major groups from all regions in the governance and work of the UNEO/reformed UNEP; 
- equitable and effective participation of developing countries in the governance and work of the UNEO/reformed UNEP; 
- a holistic concept of sustainable development that fully appreciates the social dimensions of environmental policy. 

*{ 
Notes 
For more information please contact Simone Lovera, Sobrevivencia/Friends of the Earth-Paraguay, email: bosques@sobrevivencia.org.py or lovera1@conexion.com.py
2 eg. The compliance mechanism of the Montreal Protocol on the Protection of the Ozone Layer, which is one of the few active compliance mechanisms in sustainable development law
}