Issue No.7

Contents:
1. NEWS
A. THE EU HAS THE IMPACT OF NEW TRADE MEASURES ON SUSTAINABILITY ASSESSED
B. A GENTLER, KINDER MAI: THE OECD REVIEWS ITS GUIDELINES FOR COMPANIES
2. THE CLIMATE CHALLENGE TO INFORMATION AND COMMUNICATION TECHNOLOGY


1. NEWS
The predominance of trade over environmental concerns is a major threat to the ratification and effectiveness of multilateral environmental agreements MEAs including the Kyoto Protocol. This issue of the newsletter features newsstories on two initiatives that expressly solicit input from businesses and non-governmental organizations NGOs on the effects of the current globalization of the economy. Positive ideas are being sought on how to bring economic progress into harmony with the prerequisites for sustainable development. With deadlines set for the end of 1999 and the Spring of 2000, respectively, results are due just in time for the new millennium.

Quote of the week: The answer to the question, who "owns the smoke stack, is inherently less ambiguous than the concept of 'causing an emission'", Jay Hakes of the U.S. Department of Energy, testifying before the U.S. House of Representatives on July 15, 1999, on the causation principle during the transition from voluntary reporting to "Early Action" crediting, http://www.eia.doe.gov/neic/speeches/htest715/testmony.htm

A. THE EU HAS THE IMPACT OF NEW TRADE MEASURES ON SUSTAINABILITY ASSESSED
The leadership crisis at the World Trade Organization WTO has been solved by a job-sharing compromise, according to which the candidate from New Zealand will serve first, then that from Thailand. Now the WTO is set to begin its Ministerial meeting in November 1999 in Seattle. First on the agenda will be considerations to open a new round of trade talks. NGOs have expressed skepticism as to the impact of new trade measures on sustainability, as announced in our newsstory entitled "High-Level Meeting at the WTO Tackles Environmental Issues", Issue No.2 ( https://members.tripod.com/ruddyconsult/199902.htm), and in our newsstory entitled "Report on conference" in Issue No.4

(https://members.tripod.com/ruddyconsult/199904.htm). The European Commission aspires to dispel such fears by carrying out a thorough analysis at the University of Manchester. During Phase One lasting from mid-July - mid-September 1999, a methodology is to be established. Then in Phase Two from mid-September - mid-November, the methodology will be applied and proposals developed. A Website has just been set up, requesting comments at http://fs2.idpm.man.ac.uk/sia/text.htm.

B. A GENTLER, KINDER MAI: THE OECD REVIEWS ITS GUIDELINES FOR COMPANIES
The OECD countries issued a set of guidelines in 1976 as part of their Declaration on International Investment and Multinational Enterprises MNEs, better known in UN parlance as Transnational Corporations TNCs. However neoliberal thought predominated during the ensuing years, and they were neglected. The Nineties brought the contrary developments of negotiations on a Multilaterial Agreement on Investment MAI amidst a revival of public concern about globalization and the effects of transnational corporations' activities. The latter was accompanied by NGOs' product-targeted campaigns such as Fairtrade and Clean Clothes. Two speeches were given recently in German on this topic, one by Jens Martens, published in Belohnen Beschaemen Bestrafen, http://www.weedbonn.org, and the other by Kilian Delbrueck of the Federal Ministry of the Environment, which will be published in the proceedings by http://www.ioew.de.

In February 1999, United Nations Secretary-General Kofi Annan announced his plan for improved cooperation with business, the International Labour Organization ILO, http://www.ilo.org, and UNCTAD at the World Economic Forum in Davos, Switzerland, as reported in our newsstory entitled RETALIATION AT THE WTO/WEO VERSUS COOPERATION AT UNEP/ILO, in Issue No.5

(https://members.tripod.com/ruddyconsult/199905.htm). His proposal is referred to as the "Global Compact on Human Rights, Labour and Environment". It is one of several initiatives that mark a new trend to establish voluntary standards and codes of behaviour such as ISO 14031 Environmental Performance Evaluation, http://www.iso.org, and Social Accountability SA 8000 from the Council on Economic Priorities CEP in New York and London and http://www.sgsgroup.com/SGSICS.nsf/pages/home.html.

Like Kofi Annan's proposal, the 1976 guidelines at the OECD are "complementary to the ILO", and the OECD even incorporates the views of labour unions. The OECD guidelines are currently up for a transparent process of review, http://www.oecd.org//daf/cmis/CIME/mnemore.htm. The stated goal is "to conclude the Review by the time of the annual meeting of the OECD Council at the Ministerial level to be held in the Spring of 2000", http://www.oecd.org//daf/cmis/CIME/framewk.htm.

The OECD centers its work around its Committee on International Investment and Multinational Enterprises (CIME). The OECD is fully cognizant that its member "governments have also published such standards [of business conduct] or are planning to do so (e.g. the United States, Canada and Australia have published voluntary standards, while the EU Parliament has recommended one);" but it seeks to harmonize all of them, and bring them into relation with the non-OECD, i.e. developing, world. The framework document explains: "As the MNEs broaden and deepen their involvement with developing countries, the absence of basic legislation in some areas (human rights, labour relations, and environmental protection) and the highly uneven capacity to enforce laws can pose problems. In particular, it means that MNEs sometimes conduct business in the absence of legal frameworks that, elsewhere, would shape their decisions." The ambitious OECD Guidelines set out to correct this situation with its chapters on topics such as disclosure, corporate governance, competition, finance, taxes, employment, science and the environment.

The environment was last covered under the OECD Guidelines in 1991, i.e. in the era prior to the Rio Earth Summit. Thus that topic is a prime area for the upcoming review, is organized under EPOC, the Environment Policy Committee, and is described in a special 20-page paper available on the same Website, http://www.oecd.org//daf/cmis/CIME/envmarch.pdf. Here too the OECD is fully cognizant that there have been other initiatives with similar aims such as Agenda 21, the Business Charter for Sustainable Development (International Chamber of Commerce, ICC), the CERES principles, http://www.ceres.org, the chemical industry's Responsible Care program, and UNEP's financial-institutions initiative. In fact EPOC was requested by CIME to compare and "fill in the gaps" among them all. Respecting the different perspectives of the various codices, the authors realized, though, the great difficulties that a mere gap-filling would involve.

Instead, the authors wisely emphasise that the concept of sustainable development (SD) be incorporated into the review, as well as consultation with civil-society actors, measurable performance goals and verification. The alternative mentioned of "injecting" SD after the fact "as a chapeau", though, is a far cry from the European Commission EC's recent decision to integrate environmental and SD criteria into all policy sectors, specifically mentioning "the Kyoto process" as one of them, in its "Cologne Report", http://europa.eu.int/comm/dg11/docum/sec99777.htm. The report (60 kB) mentions the millennium round, and its "key messages" begin with the recognition that "climate change is one of the major environmental challenges and a key issue for integration. Therefore the Cologne Report on Integration is closely linked to the separate report by the Commission on a Climate Change strategy for the EU adopted on 19 May 1999", as reported in Issue No. 3

(https://members.tripod.com/ruddyconsult/199903.htm).

The OECD's environmental guidelines are, of course, intended to apply to MNES; "however," the document warns, "it is not explicit whether the non-OECD activities of OECD-based MNES are also covered by the Guidelines. This may have implications for the environment, inasmuch as the environmental performance of MNEs operating in non-OECD countries may be increasingly important in the future, for such transboundary issues as climate change."

2. THE CLIMATE CHALLENGE TO INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)
We at the ASIS project begin with the thesis that computer networks, along with lower transport costs, are helping make possible the current "globalization" of the economy. The Climate Change Action Group is continuing its debate on how to harness the powers of computer networks and globalization to counteract the twin challenges of world poverty and climate degradation. See the theses on the potential of ICT outlined at https://members.tripod.com/ruddyconsult/theses.htm.

There will be a face-to-face meeting of persons interested in discussing these theses at the conference on 27th July 1999 in Stuttgart, "Flexible Mechanisms for an Efficient Climate Policy", held by the Baden-Wuerttemberg Ministry of the Environment and ZEW, Centre for European Economic Research, Mannheim, http://www.zew.de/flex_mech/frameset.html. The resulting solutions will covered in the next issue and will be submitted at COP5 in Bonn.

U.S. National Summit on Technology Transfer to Open with Information Technology
The United States Business Roundtable BRT has in its own words "taken a firm position in opposition to the Kyoto Protocol in its current form." BRT gives the following reasons: [the Protocol] "does not include developing countries, would have a negative impact on the U.S. economy and would bring no significant global environmental benefit." Later in its July 20th press release, the BRT complains that the Kyoto Protocol's schedule is too tight, not allowing manufacturers enough time to put new technologies into place.

In the section of its Website http://www.brtable.org/document.cfm/298 headed "Technologies 'On the Horizon'" the BRT goes on to list the sectors of technology concerned. It begins the list with the statement that "no exploration of technology progress in the 21st century would be complete without considering the impact of information technology. The 'digital revolution' likely will bring pervasive and deep changes in how energy is managed and used in every sector. Not only are machines, motors, lights and equipment in general afforded 'intelligence,' but entire processes from design to fabrication, delivery and operation are improved by the rapidly emerging capabilities of the microprocessor and telecommunications." In conclusion, the BRT makes its Proposal #2 "inviting the government to take part in a national summit on technology transfer in the 21st century." The rest of the paper (319 kB) is available for download.