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THE BATTLE OF BALI:

TWN Report on the WSSD Prepcom

Dear friends and colleagues,

Below is a report by TWN researcher Yin Shao Loong about the preparatory committee meeting for the WSSD that was held in Bali in June.  As you know, these talks ended in deadlock, which has placed the Summit itself in “crisis mode.”

with best wishes
Martin Khor


 

THE BATTLE OF BALI

Last stop before the World Summit on Sustainable Development

Negotiations on an action plan for the forthcoming UN summit on sustainable development have ended in deadlock as key developed nations hold back from commitments on finance, debt relief and combating poverty.

The Bali preparatory meeting for the World Summit on Sustainable Development (WSSD), to be held in August 2002 in Johannesburg, South Africa, saw a clear North-South divide emerge over reform of international relations.

Tense closed-door negotiations took place over the last 24 hours of the Bali PrepCom, which ended in the early hours of 8 June. Ministers and senior officials of the US, EU, Japan, Mexico, Norway and the developing-country negotiating bloc known as the Group of 77 and China, which comprises 137 countries, met on the morning of Friday 7 June to consider a draft paper detailing a proposal for the financing of a sustainable development action plan for the 21st century (Agenda 21 of the 1992 Rio Earth Summit).

Negotiations had crawled for some days over the content and financial resources covered by the “Means of Implementation” section of the WSSD’s plan of action, which PrepCom chairman and former Indonesian environment minister Emil Salim had hoped to dub the “Bali Commitment” if negotiations had been successful.

The text negotiated thus far is being transmitted to Johannesburg, 73% has been agreed and the rest - largely pertaining to trade, finance and globalisation - remains contentious and in brackets as per UN negotiations indicating unagreed text. This threatens to be a setback to the Summit’s prospects for success since many developed countries have been aiming to undermine progress on both environment and development issues since Rio.

Negotiations in Bali had proceeded on four tracks: the environment and natural resources (including energy, water, biodiversity and special programmes for small-island developing states (SIDS) and Africa); the institutional framework for sustainable development (focusing on the modalities and reform of global, regional and national governance institutions); trade and finance (including in the Means of Implementation); and tentative negotiations on a political declaration for the Johannesburg Summit.

By the last day of the Bali PrepCom, apart from the Means of Implementation, negotiations had stopped unfinished on all tracks with over 200 brackets outstanding. Among them was the Rio Principle of “common but differentiated responsibilities” of nations to sustainable development. That mention of this principle within the preamble was highlighted as an outstanding issue by the US testifies to the incredible backslide on the sustainable development agenda since 1992.

After the Rio Earth Summit the UN had calculated that Agenda 21’s implementation would cost over $600 billion annually in developing countries. Developed countries had agreed to commit $125 billion a year through official development assistance (ODA), a figure based upon 0.7% of their gross national product (GNP). To date, only five countries have met this target - Denmark, Finland, the Netherlands, Norway and Sweden. And since 1992, 14 of 21 donor countries have seen their aid budgets decline.

Developing countries were keen to move beyond the level of the March 2002 Monterrey Conference on Financing for Development which had only reaffirmed developed countries’ commitment to meet the Rio target of 0.7% of GNP as ODA. The EU committed as a whole to an average of 0.33% of GNP as ODA. The US announced an increase of $5 billion over 2004-2006 above its present level. Japanese ODA, however, is expected to continue its downward slide.  Efforts to put substantial debt relief for the most indebted countries on the table at Monterrey had largely failed, in part due, as some countries had complained, to premature concessions by the G77 and China, chaired this year by Venezuela.

However, developed countries have been adamant throughout the last three WSSD PrepCom meetings that the Means of Implementation should not go beyond agreements made at Monterrey or at the last World Trade Organisation (WTO) meeting in Doha, Qatar. The US and Japan in particular have been reluctant to concede any progressive terms that would link unsustainable levels of debt with sustainable development despite the common linkage of poverty. The EU has been more conciliatory, a position due in no small part to the fact that most of developing-country debt to the EU is public debt, in contrast to the predominantly private debt held by the US and Japan.

According to Binnie Bichauri of INFID (an NGO debt network), Indonesia whose biggest creditor is Japan, pays $45 per citizen per day in debt whilst each citizen receives $2 per day in health care and education.

During an evening meeting of ministers of the EU and G77/China on Thursday 6 June the EU issued a non-paper version of the Means of Implementation (which would only become an official paper following consensual adoption). This was later amalgamated with a G77 and China position in the early hours of Friday.  South African minister for environment and tourism Valli Moosa presented the new draft to the select group of six ministers at 08:00. The non-paper received ministerial approval for consideration by delegations.

The G77 and China convened at 11:00 to consider the paper.  According to observers, Venezuelan chairman Vicente Vallenilla presented it as a “take it or leave it” option, which caused some debate in G77 and China ranks. India voiced objections to positions on ODA within the paper. Samoa defended the work put into the paper, overseen by fellow SIDS-member John Ashe of Antigua and Barbuda, who had chaired the Means of Implementation negotiations. Some African countries, which already had a special section within the plan of action for Africa, were focused on garnering more financial concessions, and attempted to sound out a US representative on climate change funds during the course of the meeting. Brazil suggested that plan of action texts negotiated thus far be taken to Johannesburg and negotiated as a package rather than isolate the Means of Implementation section. China voiced what was to become the interim position: wait and see what the other countries make of the non-paper.

The US and Japanese delegations clustered in the corridors around John Ashe outlining their contentions. Although they did not proceed far beyond the first half of the paper it was clear that they were both not in favour of progressive language on debt relief. All in all, 13 points of disagreement were registered.

The EU’s principal objection was reference to market access for developing countries and phasing out all forms of export subsidies, and substantial reductions in trade-distorting domestic support under the WTO Agreement on Agriculture. Europe’s provision of agricultural subsidies to its farmers remains a non-negotiable issue in international fora. (It is notable that, apart from the host Italy and Spain, who holds the EU presidency, no developed country heads of states chose to attend the FAO World Food Summit on 10-13 June, where market access for developing countries was hotly debated.)

Norway, which had been frozen out of closed-door negotiations earlier during the week, voiced dissatisfaction with the process. It stated its intention to submit a formal letter of complaint over its exclusion. Norway had been consistent in making a number of usually constructive interventions in the institutional framework and Means of Implementation negotiations. However, a call of complaint by Washington to the Norwegian ambassador in the US reportedly engendered a more subdued approach by the delegation in Bali.

Within a day the locus of the PrepCom and the fate of the Bali Commitment had shifted from the negotiating rooms to the corridors and the small meeting rooms of the PrepCom Bureau.

The six key delegations re-gathered in the Bandung Room of the Bali International Conference Centre to hear their respective positions. Chairman Emil Salim, eager for a deal to be struck, declared that the paper was a “take it or leave it” document and reminded delegations present that his mandate expired after 7 June. The G77 and China took a bold step and declared that they found the paper acceptable and if other delegations were unable to accept it then the last week of negotiations on finance would be rendered void and parties would have to revert to the last officially published working text.

This was a calculated gamble on the part of the G77 and China to test the political will of the developed countries. The 08:00 non-paper contained much language favoured by the developed countries which prejudiced the outcomes of the present work programme at the WTO by listing targets for the completion of negotiations on new issues. It also contained moderate language on the international financial architecture which did not contain any proposals for reform. The key tests of political will lay within paragraphs on debt (which attempted to advance beyond the Heavily Indebted Poor Countries (HIPC) debt relief initiative), diversification for commodity-dependent countries, and the elimination of agricultural subsidies. Additionally both the US and EU had advanced similar text on the WTO-TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement and public health, implying that implementation of TRIPS would be a boon for public health whereas in fact TRIPS, by enshrining strict intellectual property rights, raises the costs for public health care (witness the feud in South Africa and elsewhere over access to HIV/AIDS drugs). The 08:00 non-paper reversed the emphasis stressing the suspension clauses within TRIPS which parties may exercise as they deem fit as part of a public health approach rather than TRIPS itself.

If the developed countries rejected the paper it would be clear that they were against substantive debt forgiveness, sustainable commodity-based economies, fair terms of trade and public health in developing countries. In spite of high talk by developed nations of combating poverty, ensuring sustainable consumption and protecting human rights and the environment, it would be clear, if the compromise package was rejected, that on matters of substance the North wanted the South to stay locked into its subordinate position within the global economy. There would be no sustainable development without commitment to its implementation. Least developed countries cannot be expected to make inroads into sustainable resource use if they face crushing debts, falling commodity prices and an HIV/AIDS pandemic for which they are unable to purchase medicines or fund policies.  The UN Conference on Trade and Development’s (UNCTAD) Trade and Development Report 2002 has observed that developing countries are trading more whilst earning less. Meanwhile prices of goods in the North are falling. The South is on the losing side of this equation.

The EU stated that it could accept the non-paper as the basis for further negotiation. Norway, Mexico and New Zealand also accepted the paper. The US and Japan stayed silent throughout. Raising the pressure, the G77 and China declared that the Bandung Room was divided by an invisible curtain: on one side stood the EU, US and Japan, on the other side stood the rest of the world. They stated again that they wanted a ‘yes’ or ‘no’ answer to the non-paper, or else the Means of Implementation would fall back to the previous deadlock of the week before.

Norway later struck for a compromise position by supporting the EU approach.  A key US negotiator was seen disappearing into the bushes whilst presumably on the phone with Washington which had just woken up. The evening plenary was indefinitely postponed.

At around midnight the plenary was convened but the news was already out in the corridors: no deal. There would be no Bali Commitment and chairman Emil Salim’s exhausted face said it all. The UN bureaucracy had made a clear impression in conversations and informal consultations throughout the two weeks of the PrepCom that achieving a deal was at times more important than the substance. Had it not been for the unexpectedly bold strategy of the G77 and China in the final hours of the PrepCom, it would be likely that Johannesburg would contribute little more to international politics than a half-hearted endorsement of the need to make development sustainable, an effort to be achieved by the weak concept of voluntary partnerships as vehicles for implementation, complementary to the official plan of action.

The controversial partnership concept is a direct index of the declining ability of increasing parts of the UN to boldly address the institutional and systemic inequalities at the heart of the international economic order.

This is what emerged in the final hours of the Battle of Bali: a politics for Johannesburg.

In a movement which in many ways reprised Rio it was again made clear that sustainable development was not simply an issue of environment or even poverty, but fundamentally one of equity within the world order. There has been a dramatic re-militarisation of the globe since 11 September and this is directly bound to the punishing economic conditions imposed for decades on developing countries, conditions under which sustainable development (or even development) is not possible.

In her closing address to the plenary, Venezuelan Minister for Environment Ana Elisa Osorio, speaking for the G77 and China, stated that despite efforts made and flexibility shown by the G77 and China, unity amongst major parties was not achieved. She emphasised the principle of common but differentiated responsibilities and financial mechanisms necessary to implement sustainable development, including the burden of external debt and developing-country products not finding access to markets at remunerative prices.

If there is a search for a political focus around the Johannesburg Summit, a focus which has up to now been dramatically absent (evidenced by the public musings of many to forego the Summit), then parties could do little better than to focus on fundamental crisis issues such as debt, fair and stable commodity prices and basic development needs. From these stem inroads to resolving the environmental, health, poverty and gender macro-crises. The US, Japan and to an extent the EU have shown that when push comes to shove they are unwilling to commit to progress in these areas. This makes Johannesburg a Summit not just about sustainable development, but about the conditions necessary for a decent life itself.

Yin Shao Loong is a researcher with Third World Network.

Contact:   twnkl@po.jaring.my

 


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