Beyond business as usual?

In terms of an intergovernmental agreement, few consider the Earth Summit much of a success. But does it represent a shift in the role of business? Mark Nicholls reports from Johannesburg

It was a triumph of the management of expectations. By the time the World Summit on Sustainable Development limped to its official conclusion, resignation was a more common response among seasoned environmental campaigners than genuine anger.

The Plan of Implementation – the official intergovernmental outcome of the Summit – was, at best, a mixed bag.The UN trumpeted its two successes, on improving access to sanitation and on restoring depleted fisheries (see box). But the lack of targets on renewable energy, and a toothless pledge on biodiversity that was actually weaker than that agreed at the first Earth Summit in Rio in 1992, dismayed those optimists that had hoped for great things from Johannesburg.

An agreement - of sorts - is reached in Johannesburg

For all the disappointment among the environmental community, by the time the Summit opened on 26 August few were expecting a bold intergovernmental agreement. By that point, it was already clear that there were too many issues on the table, and too little political will, for such an agreement to emerge.

To a large extent, then, the Summit shifted attention downwards – to ‘local’ initiatives, among one or more governments, civil society such as non-governmental organisations (NGOs), and business. And it focused unprecedented attention on the role and responsibilities of business in contributing to sustainable development.

“There was an acknowledgement that business has a major role in sustainable development, and that’s important,” says Mark Moody-Stuart, the former chairman of oil giant Shell. As head of lobby group Business Action for Sustainable Development (BASD),he was the most prominent voice of business at the Summit.

“Now we need to sit down and work out how that role is defined,” he continues.

The role of business at the Summit was, as always, controversial. NGOs complained about companies ‘hijacking’ the negotiations, and spotted corporate giants lurking behind US – and European – efforts to avoid targets, timetables, or a new international framework on corporate responsibility.

And business was heavily represented: more chief executives attended than heads of state. But Björn Stigson, head of the World Business Council for Sustainable Development (WBCSD), denies that business had a disproportionate influence on events. “There’s often a perception that others have a bigger influence than you do, because you don’t know their situation – the business axis is not bigger than the NGOs’,” he says, noting that business is only one of the nine ‘UN Major Groups’ representing non-governmental groupings.

Jonathan Lash, president of US environmental think-tank, the World Resources Institute, found business’ high-profile attendance heartening. “It’s interesting to me that business felt it in their interests to be present at this summit in numbers, and that they were there to say, ‘sustainable development is important to us’.

“They see this as a strategic issue for the future,” he adds. “And that’s encouraging.”

So, going forward, what will be the role of business in promoting sustainable development? Much was made of the so-called ‘Type II’ partnerships, where government, civil society and business come together to implement projects that will have a measurable impact on poverty reduction, health, or environmental degradation.

Over 220 such partnerships were announced as part of the Earth Summit proceedings, representing more than $235 million of resources – although not all were new. Many more were announced on the sidelines of the Summit.

Observers cited the New Partnership for African Development as a model Type II agreement. It sets ambitious goals, such as 7% annual GDP growth for the next 15 years, reducing numbers living in extreme poverty by half between 1990 and 2015, and primary education for all children by 2015.The initiative plans to bring together governments, donor agencies, NGOs and the private sector to help meet these and many other goals.

But some campaigners point to two dangers of such partnerships: one, that they allow the laggards among the business community to do nothing; and two, that they raise the spectre of the “privatisation of sustainable development”, as the head of the UN Environment Programme, Klaus Topfer, put it.

“We’re not against partnerships, and we participate in them from time to time,” says Lasse Gustavsson, deputy director of Greenpeace International’s political unit.“But if I was the CEO of a multinational, by law I’d have to take care of shareholders’ interests above those of the environment.We need the environment protected by legal frameworks.”

Others are less concerned. Jacob Scherr, director of the international programme at US environmental group the Natural Resources Defense Council (NRDC), says Johannesburg “represented a shift in how the UN approaches summitry. For the first time in the history of the UN, there was a real effort to go beyond negotiations and find partnerships to address the problems related to sustainable development.”

While he notes that partnerships are nothing new (although the name Type II is), he believes “the summit signalled that the UN wants a greater involvement from the business community in solving these problems”.

Some in the business community are clearly uneasy about assuming too much of what has traditionally been seen as the work of government.“Business is only one factor in sustainable development,” says Maria Livanos-Cattaui, secretary general of the International Chamber of Commerce (ICC). “Business is not government,” she adds.

But while few doubt that such voluntary partnerships are an important means of delivering concrete results, a fiercer debate is developing over the regulatory frameworks that could encourage business to move towards more sustainable practices.

Calls for international standards on corporate accountability – from those concerned about the negative effects of globalisation on the poor and the environment – proved fruitless.

The Implementation Plan calls for signatories to “actively promote corporate responsibility and accountability, based on the Rio Principles, including through the full development and effective implementation of intergovernmental agreements and measures, international initiatives and public-private partnerships, and appropriate national regulations”.

But the Plan calls merely for “urgent action on all levels” rather than anything more specific, environmentalists complain. “The lack of an international agreement on corporate accountability was disappointing,” says Jennifer Morgan, head of the climate change programme at WWF, an environmental pressure group. “Discussion of international standards would draw greater attention to the role of multinationals around the world,” she continues. “And companies would be keen to avoid that.”

Indeed, business voices were almost unanimous in opposing such an overarching regulatory framework.

Peter Eggleston, group co-ordinator of sustainable development at mining firm Rio Tinto in London, points out that “there is already a plethora of approaches to corporate governance”, from OECD and International Labour Organisation guidelines, to the UN’s Declaration on Human Rights.“And this is in addition to national reporting requirements,” he adds.

“We encourage business to be clear, accountable and report what its doing at all times,” says Livanos-Cattaui of the ICC. “But an international convention may not be an effective way of going about it.You’re going to get into trouble with a one-size fits all approach”.

 

Less than half a loaf Few expected much progress on protecting the planet and reducing poverty at the World Summit on Sustainable Development. Some even doubted whether any international agreement would be struck. But the thousands of negotiators did manage an agreement of sorts: a 54-page Implementation Plan, and a shorter political declaration. Both were long on platitudes, inclusive diplomatic language, and open-ended commitments. Both were short on targets and timetables. The key points were: Sanitation: A deal, hailed as a breakthrough, to halve the number of people without access to sanitation by 2015. Fish stocks: Maintain or restore fish stocks “to levels that can produce the maximum sustainable yield” by 2015.Another new agreement. Renewable energy: No targets, despite EU hopes for 15% of electricity from renewables by 2015.Words of encouragement – calls to “substantially increase” renewables – but also for more efficient fossil-fuel generation. Biodiversity: The deal – a “significant reduction in the current rate of loss of biological diversity” by 2010 – is weaker than the UN Biodiversity Convention. Toxic chemicals: A new agreement to minimise the use of harmful chemicals by 2020. Health: Reiteration of earlier agreements to slow the spread of HIV/Aids and to reduce the number of infant deaths. Poverty: The agreement to halve the number of people living on less than $1 a day by 2015 is not new.

Stigson, too, favours a voluntary approach, citing the work done by the Global Reporting Initiative in establishing social and environmental reporting guidelines. “It’s a condition of [WBCSD] membership that companies report,” he says. “I don’t see what further government intervention could achieve.”

Moody-Stuart’s refrain in Johannesburg was that it is at the national level – particularly in developing countries – that regulation needs to be enhanced. Indeed, he stresses that business cannot effectively operate in countries without a predictable regulatory framework, based on the rule of law. “

A large number of NGOs launched their efforts at [pushing for] a convention to control and compel international business to do these things … it’s the wrong target.We need to ensure good governance in each and every country first,” he says.

The NRDC’s Scherr agrees: “While it would be ideal to have a strong international system to hold corporations accountable … improved governance in the developing world would deal with the problem of corporate accountability.”

What was abundantly clear from the Earth Summit is that no amount of voluntary initiatives from the more progressive end of the business spectrum will be sufficient to ward off criticism – and scrutiny – from the NGO community. And that profound scepticism exists that business will go substantially further than regulation demands.

“We need international agreements to protect [the environment],” says Greenpeace’s Gustavsson. “There is no global market where there are higher standards among business than the lowest legal framework. Dirty businesses shouldn’t be allowed to move around the planet.”

The Earth Summit may have marked a greater appreciation within the UN process of the role of business in promoting sustainable development – but the balance between national legislation, international rules and voluntary action by the private sector remains as controversial as ever.