Daily report for 16 June 1993

Wednesday's discussions focussed on Agenda Item 7 and theSecretariat's documents on finance, E/CN.17/1993/11 and Add.1.Under-Secretary-General Desai said that negotiations leading up toRio were taken up greatly by this item, and that in concrete terms,not enough had been done. He thought that if this meeting ended andwe found ourselves in the same place as before on commitments, thenimplementation of Agenda 21 is in trouble. The CSD must define itsrelationship with the financial institutions.

Mohamed El-Ashry, Chair of the Global Environmental Facility, thenbriefed the Commission. He said the process of restructuring theGEF was launched last December in Abidjan where the principle ofuniversal membership was endorsed. The governments then madeprogress in May in Beijing on the replenishment of the GEF. Donorssaid that they intended to decide by December 1993 on contributionsto the core fund, provided that the restructuring of the facilityis agreed upon by that time. There was consensus on the broadinstitutional framework for the restructured GEF and reaffirmationof a continuing role for the World Bank, UNEP and UNDP. Outstandingissues yet to be resolved are precise mechanics of the votingsystem, institutional arrangements, and the arrangements for theSecretariat.

El-Ashry responded to a question from Egypt that the ScientificTechnical Advisory Panel (STAP) will evolve with the GEF, takinginto account other advisory boards that may be set up. US$1.3billion was the amount of the pilot phase and $2.4 billion is theamount for the next phase. A double majority system of voting wouldcome into play only when consensus could not be reached. TheRussian Federation asked if there is an intention to implement thestatus of economies in transition with the GEF, and did the GEFissue invitations to countries to join. El-Ashry replied that anycountry could join, and that an invitation had been sent to theRussian Federation to participate in the Beijing meeting.

India was concerned with linkages between the GEF and Agenda 21.El-Ashry replied that the GEF is only one of the financialmechanisms for environment and development. Uruguay wanted to knowabout the legal procedures and what the best relationship thegovernments could have with the GEF. El-Ashry said that in Abidjanthe legal status of the GEF after the pilot phase had beendiscussed, and the restructured GEF would be created by resolutionsadopted by the governing boards of the World Bank, UNEP and UNDP.

Poland asked about flexibility of resources in relation to theprovisions of the conventions. El-Ashry replied that it was hard tosay, since now there is only a concentration on programme. Inresponse to Vanuatu, El-Ashry said that the GEF should have a clearmandate to deal with the global environmental conventions.

Mexico said that records and reports are a two-way street betweenthe GEF and the CSD. Bolivia asked what is the practical procedurefor becoming a member of the Participants Assembly. El-Ashry saideveryone is welcome. Cuba shared India's concern about the scope ofthe facility. El-Ashry said that there was a narrow mandate becausethere are other funding institutions and facilities.

Canada asked if GEF funds actually sponsor work done in otherentities. El-Ashry stated that GEF funds sponsor only the programmeof the GEF. Benin wanted to know about possible inequities in thevoting of the Participants Assembly. It was explained that there isno final decision on what the constituencies look like. Malaysiaasked about linkages between the Montreal Protocol and the GEF.El-Ashry said that many countries did not qualify under theMontreal Protocol fund because the cut-off point related to eitherproduction or consumption, and that those countries would thenqualify for GEF funding.

Morocco had a question about the criticism by NGOs of projects thatmight be funded. El-Ashry replied that GEF has a good relationshipwith NGOs, that there has been much criticism of projects from manyplaces and some is justified and some not. Finland asked about thetripartite role of the partners and the importance of the smallgrants programme for NGOs. El-Ashry said that the role of thepartners is important for the future.

Razali then opened the floor for consideration of agenda item 7. Asno government wanted to take the floor, NGOs were invited to speak.Horace Levy, from the NGO Finance Working Group, asked governmentswhere the financial resources needed to implement Agenda 21 willcome from, who will decide how the resources will be used, and whowill be the beneficiaries. Martin Khor from Third World Networkspoke about the partnership of Northern and Southern NGOs stemmingfrom Rio. The issue is not aid, but finance and the flow ofresources from South to North that must be reduced. There is novalue on the raw genetic material of the South, while Northernresources are protected.

Austria shared in the sense of frustration with the sober analysisof financial flows. If projects are presented in a convincingmanner and in a solid institutional framework they will find thenecessary funding. Austria wanted to know about the real functionof ad hoc groups and warned against a proliferation of groups.Pakistan discussed the diversion of resources to new recipientsapart from developing countries; the reverse flow of nearly US$50billion from South to North in debt payments; conclusion of theUruguay Round of GATT; commodity pricing; and GEF restructuring. Hesupported the creation of ad hoc working groups if their objectivewill be to optimize resources and the identification of mechanismsfor financing Agenda 21.

Uruguay stressed the importance of the relationship between the CSDand other international trade and financial institutions. Heemphasized the need to come to grips with practical needs at thenational level. Malaysia said that the universal assessment of theoutcome of Rio is a shortfall in financing. He mentioned thepossibility of devoting 1% of military expenditure to the UN forenvironmental protection and stressed that financial flows cannotbe divorced from the broad macroeconomic structure.

FINANCIAL COMMITMENTS, FLOWS AND ARRANGEMENTS

Wednesday's discussions focussed on Agenda Item 7 and theSecretariat's documents on finance, E/CN.17/1993/11 and Add.1.Under-Secretary-General Desai said that negotiations leading up toRio were taken up greatly by this item, and that in concrete terms,not enough had been done. He thought that if this meeting ended andwe found ourselves in the same place as before on commitments, thenimplementation of Agenda 21 is in trouble. The CSD must define itsrelationship with the financial institutions.

Mohamed El-Ashry, Chair of the Global Environmental Facility, thenbriefed the Commission. He said the process of restructuring theGEF was launched last December in Abidjan where the principle ofuniversal membership was endorsed. The governments then madeprogress in May in Beijing on the replenishment of the GEF. Donorssaid that they intended to decide by December 1993 on contributionsto the core fund, provided that the restructuring of the facilityis agreed upon by that time. There was consensus on the broadinstitutional framework for the restructured GEF and reaffirmationof a continuing role for the World Bank, UNEP and UNDP. Outstandingissues yet to be resolved are precise mechanics of the votingsystem, institutional arrangements, and the arrangements for theSecretariat.

El-Ashry responded to a question from Egypt that the ScientificTechnical Advisory Panel (STAP) will evolve with the GEF, takinginto account other advisory boards that may be set up. US$1.3billion was the amount of the pilot phase and $2.4 billion is theamount for the next phase. A double majority system of voting wouldcome into play only when consensus could not be reached. TheRussian Federation asked if there is an intention to implement thestatus of economies in transition with the GEF, and did the GEFissue invitations to countries to join. El-Ashry replied that anycountry could join, and that an invitation had been sent to theRussian Federation to participate in the Beijing meeting.

India was concerned with linkages between the GEF and Agenda 21.El-Ashry replied that the GEF is only one of the financialmechanisms for environment and development. Uruguay wanted to knowabout the legal procedures and what the best relationship thegovernments could have with the GEF. El-Ashry said that in Abidjanthe legal status of the GEF after the pilot phase had beendiscussed, and the restructured GEF would be created by resolutionsadopted by the governing boards of the World Bank, UNEP and UNDP.

Poland asked about flexibility of resources in relation to theprovisions of the conventions. El-Ashry replied that it was hard tosay, since now there is only a concentration on programme. Inresponse to Vanuatu, El-Ashry said that the GEF should have a clearmandate to deal with the global environmental conventions.

Mexico said that records and reports are a two-way street betweenthe GEF and the CSD. Bolivia asked what is the practical procedurefor becoming a member of the Participants Assembly. El-Ashry saideveryone is welcome. Cuba shared India's concern about the scope ofthe facility. El-Ashry said that there was a narrow mandate becausethere are other funding institutions and facilities.

Canada asked if GEF funds actually sponsor work done in otherentities. El-Ashry stated that GEF funds sponsor only the programmeof the GEF. Benin wanted to know about possible inequities in thevoting of the Participants Assembly. It was explained that there isno final decision on what the constituencies look like. Malaysiaasked about linkages between the Montreal Protocol and the GEF.El-Ashry said that many countries did not qualify under theMontreal Protocol fund because the cut-off point related to eitherproduction or consumption, and that those countries would thenqualify for GEF funding.

Morocco had a question about the criticism by NGOs of projects thatmight be funded. El-Ashry replied that GEF has a good relationshipwith NGOs, that there has been much criticism of projects from manyplaces and some is justified and some not. Finland asked about thetripartite role of the partners and the importance of the smallgrants programme for NGOs. El-Ashry said that the role of thepartners is important for the future.

Razali then opened the floor for consideration of agenda item 7. Asno government wanted to take the floor, NGOs were invited to speak.Horace Levy, from the NGO Finance Working Group, asked governmentswhere the financial resources needed to implement Agenda 21 willcome from, who will decide how the resources will be used, and whowill be the beneficiaries. Martin Khor from Third World Networkspoke about the partnership of Northern and Southern NGOs stemmingfrom Rio. The issue is not aid, but finance and the flow ofresources from South to North that must be reduced. There is novalue on the raw genetic material of the South, while Northernresources are protected.

Austria shared in the sense of frustration with the sober analysisof financial flows. If projects are presented in a convincingmanner and in a solid institutional framework they will find thenecessary funding. Austria wanted to know about the real functionof ad hoc groups and warned against a proliferation of groups.Pakistan discussed the diversion of resources to new recipientsapart from developing countries; the reverse flow of nearly US$50billion from South to North in debt payments; conclusion of theUruguay Round of GATT; commodity pricing; and GEF restructuring. Hesupported the creation of ad hoc working groups if their objectivewill be to optimize resources and the identification of mechanismsfor financing Agenda 21.

Uruguay stressed the importance of the relationship between the CSDand other international trade and financial institutions. Heemphasized the need to come to grips with practical needs at thenational level. Malaysia said that the universal assessment of theoutcome of Rio is a shortfall in financing. He mentioned thepossibility of devoting 1% of military expenditure to the UN forenvironmental protection and stressed that financial flows cannotbe divorced from the broad macroeconomic structure.

CLIMATE CHANGE BRIEFING

Raul. A. Estrada Oyuela, Chair of the Climate Change INC, briefeddelegates on the work of the INC at the beginning of the afternoonsession. Since the Rio Conference the INC has held two sessions inpreparation for the first session of the Conference of Parties. Sofar 24 governments have ratified the Convention and it is likelythat in 1994 the Convention will have the 50 ratificationsnecessary to enter into force. The Committee has been focussing itswork on preparing institutional decisions, analyzing studiescarried out in the context of the World Climate Programme and theIPCC, and interim financial arrangements.

FINANCIAL COMMITMENTS, FLOWS AND ARRANGEMENTS

Algeria stated that easing the debt burden will have an importanteffect on Agenda 21; GEF restructuring must lead to greaterdemocratization and substantial growth of resources; andimplementation of the desertification convention is the highestpriority. Denmark, on behalf of the EC, mentioned that the EC haspledged 3 billion ECU for early implementation of Agenda 21 andthere has been no cut in EC aid this year. He supported the idea ofregional expert meetings on the basis of sectoral clusters toensure constructive dialogue on financing and praised OECD'sannouncement that it is ready to assist the CSD. Morocco said thatthe prospects for financing Agenda 21 are not encouraging. Althoughthere is greater direct foreign investment, 70% involves LatinAmerica and East Asia. The high level advisory body should be ableto provide views to the Secretary General on financial needs,rather than establishing working groups that will further burdendelegations.

Norway, on behalf of the Nordic countries, mentioned that in thelast year average ODA flows have dropped from 0.35% to 0.33% ofGNP. The Nordics supported the Secretariat's proposal for aclassification scheme of financial flows and stressed the need forgreater coordination with other UN and financial institutions. Herestated the Nordic proposal made in Rio for a package approach tofinancial resources. Colombia, on behalf of the G-77, said that theCSD should be the focal point to make recommendations to the GA onfinance and regularly assess the effect of various financialmechanisms. The G-77 has not reached consensus on the establishmentof ad hoc groups to address these issues, but he warned against theproliferation of working groups.

France encouraged the Secretariat to actively seek financialinformation and draw up statistical indicators so that it canassess financial flows in an objective manner. He said that thereis a need to "deglobalize" Agenda 21 as much as possible. Chinaoutlined the lack of progress on funding and the dim prospects fordeveloping countries. The CSD bears special responsibility forreviewing funding objectives and targets, expediting funding,ensuring that financial institutions report regularly on Agenda 21implementation and considering reports of developed countries onfinancial commitments. New Zealand called for clear measurements offinancial flows and their impact on sustainable development. Ad hocgroups on financial flows require detailed consideration to ensurethat they do not duplicate or produce information that is otherwiseavailable.

Germany underlined five initiatives: replenishment of GEF;contribution to the Earth Increment; orientation of Germandevelopment assistance to meet the aims of Agenda 21; debt relief;and support for Capacity 21. Burkina Faso stated that the questionof debt is of great concern as it takes funds from projects. Heurged the Secretariat to include a desirable solution to debt inits next report. Japan said that environmental aid in 1993 amountedto US$2.4 billion and Japan will give $2.6 billion to IDA. Japancan support ad hoc groups, yet the mandate and function should bediscussed and agreed upon by the CSD.

The Maori National Congress stressed the need to incorporate theparticipation of indigenous peoples in the work of the UN. He saidthat they were looking to the CSD to provide leadership and createa consultation mechanism as mandated by Rio, the General Assemblyand ECOSOC. The Philippines urged for a revision of the attitudesof the Breton Woods Institutions toward human development goals;reorientation of development projects; participation of NGOS infunding; and helping the developing world achieve substantive gainsthrough trade. India supported a thematic rather than regionalstructure for working groups.

Hungary said that GEF restructuring should achieve a balancebetween donors and recipients and that there is a need to developcriteria for assistance in proportion to economic production andneed. The US said that USAID has adopted sustainable development asits key objective and currently has an environmental assistanceportfolio of US$3.3 billion. The US has pledged $3.7 billion toIDA. Although concerned about the proliferation of working groups,she supported roundtable discussions with technical experts. The UKdescribed reorientation of domestic policies that will increase theeffectiveness of aid, the benefits of increased trade once theUruguay Round is complete, and the critical need for debt relief.

Singapore commented that all available funding mechanisms should beused in Agenda 21 implementation; GEF restructuring must continueuntil Chapter 33's goals are met; the CSD must provide thepolitical impetus for greater financial resources and note gaps inexisting financial mechanisms; and there should be an improvedmultilateral trading system. The Russian Federation stressed theneed to find a universally acceptable agreement that will meet theneeds of transition economies and that the GEF will still have toestablish interaction with transition economies. The Republic ofKorea said that it has provided about US$4 billion in ODA, funding14 projects in 11 countries and has pledged to the IDAreplenishment. The purpose of the ad hoc groups must be welldelineated.

The Netherlands said that their offer to increase ODA by 0.1% ofGNP still stands if other donors take similar steps. He said thata large part of the costs of Agenda 21 can be internalized with thepolluter-pays principle. Mexico urged the need to fund institutionslike UNEP that have demonstrated their usefulness. If workinggroups are established, they need a precise mandate, funding andbroad participation. Australia said that the CSD should find waysfor existing financial resources to achieve more. Ad hoc groupswould optimize the efficiency of the CSD, but intersessionalmeetings increase the workload and should be properly focussed.Cuba said the report for the next session should include debt andtrade as well as information from private sources and NGOs.

THINGS TO LOOK FOR TODAY

PLENARY: Discussion will continue on this morning onfinancial matters (E/CN.17/1993/11 and Add.1). Razali will thenturn to Agenda Item 6, "Progress achieved in facilitating andpromoting the transfer of environmentally sound technology,cooperation and capacity-building" (E/CN.17/1993/10).

WORKING GROUPS: The Working Groups will hold their firstsessions today in Conference Room 2. Working Group I, chaired byGhazi Jomaa of Tunisia, will begin work in the morning on themulti-year thematic programme of work for the Commission, if theChair's draft decision is available in all working languages. Ifnot, the Chair will move directly to discussion of L.3 onguidelines to the Secretariat for organizing information providedby governments on issues related to implementation of Agenda 21.Working Group II, chaired by Arthur Campeau of Canada, is scheduledto meet during the afternoon to discuss Agenda Item 7. If theChair's draft decision on this matter is not available in alllanguages, Campeau will likely cancel the meeting and immediatelybegin informal consultations on financial commitments, flows andarrangements.

OTHER ACTIVITIES: The Women's Caucus will meet at 8:30 am inConference Room A, followed by the NGO Strategy Session at 9:30 amin Conference Room B. Dr. Twig Johnson will give a presentation onthe USAID Environment Program for Sustainable Development at 2:00pm on the 11th floor of the Church Center. The NGO/Governmentdialogue will be held in Conference Room 4 at 6:00 pm, followed bythe NGO Plenary at 7:00 pm.