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Johannesburg: Achievements and Challenges

November 12, 2002

Introduction

JOANNE MYERS: On behalf of the Carnegie Council, I would like to welcome members and guests to our Worldview Breakfast program.

Today the topic of discussion is “Johannesburg: Achievements and Challenges.” We are very fortunate to have with us Nitin Desai to explore these issues.

Ten years ago, at the Earth Summit in Rio de Janeiro, the world’s governments committed themselves to making major changes in improving the lot of the world’s poor, while safeguarding our environment. Recently, world leaders gathered in Johannesburg for a similar conference. The goal of this UN World Summit on Sustainable Development was to evaluate the progress made since the Rio Conference and to set a course for the future.

Although the concept of sustainable development is difficult to pin down, there is no doubting the importance of the issues that come under its umbrella. During the next thirty years, the world’s population will increase by 2 billion people. As a result, existing environmental stresses will become even harder to manage. Already many cities in developing countries suffer air pollution that causes disease or death to millions of people. One-third of the world’s citizens live in countries threatened by water shortages. A quarter of the world’s farming and forestland has been degraded. With only these few examples, it seems easy to understand why a summit that draws attention to such disturbing trends performs a vital service.

Although the road from Rio to Johannesburg was paved with good intentions, the path has not been an easy one. Finding the right balance between the economic, ecological, and social requirements that meet the needs of present populations without compromising the ability of future generations to deal with their own necessities is a daunting challenge.

By most accounts, the Johannesburg Summit laid the groundwork for fighting world poverty and degradation of the environment. The question remains: How big a difference will Johannesburg eventually make?

To answer this question we are very fortunate to have with us the Secretary General of the Johannesburg Summit, who also happens to be the highly respected Under Secretary General for Economic and Social Affairs at the United Nations, Nitin Desai. His first-hand observations will help to provide us with the insights and information we need in our quest for achieving a sustainable future.

Mr. Desai has had vast experience in working on economic, environmental, and developmental issues. He began his governmental career in India, where he served as Secretary of the Economic Advisory Council to the Prime Minister. He later served as an economic advisor for the World Commission on Environment and Development and in the Indian Ministry of Finance.

Prior to entering government service, our guest worked for an economic consultancy service and lectured in economics at the Universities of Southampton and Liverpool in Great Britain. He has published articles on developmental planning, regional economies, industry, energy, and international economic relations.

Additionally, he has served as a Senior Economic Advisor for the World Commission on Environment and Development, also known as the Brutland Commission.

Please join me in welcoming our distinguished guest, Nitin Desai. Thank you for joining us this morning.

Remarks

NITIN DESAI: Thank you. I will speak for a little while, but I really would look forward to your comments and questions.

Let me begin, first, with something that someone just told me as I was sitting down. He said, “You’ve got to convince people that the Johannesburg Summit is a story not of yesterday but of tomorrow.”

Actually, the real problem is that Johannesburg is the story of the days after tomorrow. This is perhaps a challenge that will always remain with us.

I will not try to describe what we did in Johannesburg in detail, but I would rather focus first on what I saw as the challenge of Johannesburg before we did it; how we tried to meet this challenge in Johannesburg itself; the extent to which we succeeded; and what are the real tasks ahead of us. Most of these great summits are like marriages-- the real work starts after the marriage.

What were the challenges that we saw in the run-up to Johannesburg?

1) We had to address the sense of skepticism about great UN conferences. They attracted a great deal of support in the 1990s. But by the time we got to Johannesburg, there was as pervasive sense of skepticism: “Do these things really achieve anything? Aren’t they rather long on rhetoric and short on real commitments to action? What we need is action on the ground, and where is the evidence that these summits of the 1990s have led to change?”

Since Rio in 1992, the world has changed in many ways, but one of the very important changes is the greater sense of concern about globalization. Rio was very successful in moving the UN away from confrontation between North and South and East and West to a system which could look for a constructive consensus between all of these people. This was the great achievement of the conferences of the 1990s.

But there really wasn’t the same sense of concern about globalization in 1992. That grew much later, particularly after the financial crisis of 1997 onwards.

2) Our second challenge was to see whether we could respond more effectively to the growing concern about the role of transnational corporations, the feeling that governments could not deliver on their own, and unless these corporations were made part of the act, we would not succeed in achieving our agenda. The Secretary General had attempted some things through the Global Compact. But one of our challenges in Johannesburg was to see whether we could escalate corporate involvement in our agenda on development beyond the point of lip service.

3) Next we had to deal with the post-Kyoto perception that the United States was disengaging from the multilateral process. I saw one of my great challenges as maintaining U.S. involvement in the process, even if it meant compromises. You cannot get credible and plausible results out of the multilateral process unless you keep Washington fully engaged.

The challenge was to control U.S.-bashing so that the U.S. stays fully engaged and involved in the negotiating process, and also in the implementation process.

4) The fourth challenge was that there was an enormous amount of energy in many non-state actors who had been involved in implementing Rio, most particularly local authorities, the scientific community. But in the UN process they had been kept at a certain distance. Could we give them a much greater sense of influence and engagement?

For these reasons, Johannesburg as a summit was designed a little differently from Rio. It was not meant to break new conceptual ground. It was a summit which had to show that we could get credible commitments to action from a UN process. It was a summit which had to bring transnational cooperation into the process. It was a summit which had to engage the United States fully. It was a summit which had to make sure that it defined a role for all of the energetic actors in civil society, particularly the local authorities, the scientists, and to a certain extent the community-based organizations.

I will not comment a lot on the intergovernmental process, but that, too, was different. We relied much more on regional meetings to prepare for the summit, rather than big set-piece preparatory meetings in New York. We had to have those, but we started first with the regional meetings.

We sought to have a much more structured involvement of corporations and civil society in this whole process. In the case of the corporations, they came together. Under the Business Action for Sustainable Development, Mark Moody-Stuart, who had retired as the Chief Executive of Shell in July of 2001, became the organizer of this group and put in a huge effort into getting them all mobilized.

We encouraged them not to see their role simply as trying to influence governments, but also to develop an agenda for themselves, which they did. One of the more long-lasting contributions of the Johannesburg process would be the continuation of these initiatives.

Examples: Practically all of the major automobile companies in the world -- General Motors, Ford, Renault, Volkswagen, Toyota, Nissan -- and some of the oil majors have come together in something they describe as a mobility initiative: Recognizing that people will want to move, that the way they move now is not sustainable in the long run, and that it is their obligation as people involved in this business to try to define how one could move towards sustainability.

There is a mining initiative and a cement initiative. The largest electricity utilities in the world have also come together and created a not-for-profit fund to support universal rural electrification in developing countries.

We encourage groups, “Don’t see your job simply as that five-minute speech you will make in the government meeting. Your job is to develop an agenda for yourself, because the greatest force for implementation we have is peer pressure, the sense that people in the corporate sector will develop, that this is how my peers in the rest of the world expect me to behave.”

We were trying to create a sense of how a good corporation is expected to behave as a global citizen, and that is far more effective as a force for enforcement than any number of things that we could do. We also at the same time sought to develop mechanisms of accountability. We can’t just leave it as a purely volunteeristic initiative of the corporate sector.

A major outcome of that partnership exercise was something called the Global Reporting Initiative (GRI) which brings together corporations, NGOs, international organizations, in a framework of reporting on social and environmental impact, which is not unilaterally developed by the corporate sector but which is acceptable to the activist groups as well as to the international organizations involved in this area.

The local authorities came together in a whole series of initiatives, having their own meetings, leading up to a major exercise in Johannesburg itself, where 800 local authorities were represented .

We sought to bring scientists together. We had not done enough to inject science into decision-making. I also felt that when governments negotiate, they tend to focus on what can be done immediately. We needed to bring these people together to put “out of the box” solutions on the table -- don’t just talk about energy efficiency; talk also about the energy economy fifty years from now, which could maybe be a hydrogen economy.

Within the conference itself, we changed the format. Our first week was not the usual week of speeches. It became a week of dialogue between all of these people and governments. The session began with about fifteen people at a table, drawn from all of these groups and some experts, who were not allowed to make speeches. We had a gentleman who asked questions with a roving microphone, à la Jerry Springer, and tried to develop a conversation.

After that hour of conversation, governments could speak. Many government people threw their speeches away and started commenting on what had come out of this process.

So we sought to engage people much more directly with governments in the UN conference itself, in that first week, before the heads of state and government came. This was part of our response to concerns that had been voiced about transnational corporations, about the engagement of these very dynamic elements in society.

How did we respond to the concerns about making it action-oriented? We did that by focusing on a few key areas.

We managed to crystallize a great deal of support around what we called the “rehab” idea -- water, energy, health, agriculture, biodiversity -- to say that what we have to look for in Johannesburg is concrete, credible commitments, which will involve targets and timetables, as well as partnerships and other commitments of resources in these key areas. And if we could get real action on water and sanitation, on getting energy to poor people, on renewable energy and energy efficiency, on desertification and food security in Africa, on the health and environment link, and on a much more holistic approach to biodiversity and ecosystems, then we would be a long way towards sustainability.

We sought to link these with the Millennium Development Goals, of halving poverty by 2015. With so many of the poor in rural areas, you cannot do that unless you also address issues of land, water, forests, fisheries, et cetera. You cannot just do it by handing out sewing machines. You have to address the issues of the underlying productivity of the people who are in poverty.

Similarly, a goal of a two-thirds reduction in infant mortality cannot be achieved unless you also address issues of water and sanitation. A large part of morbidity and mortality among young people is because of the quality of water supply and sanitation.

So we sought to connect this resource agenda with the Millennium Goals, the seventh of which is environmental sustainability. But nevertheless, we sought to connect it with the anti-poverty agenda, which has a great deal of commitment and political energy behind it.

To a large extent, we succeeded in establishing targets and timetables. The one which received the most attention is that the United States and a few others would not accept a goal on renewable energy, accept a freeze like “substantially increase as a matter of urgency.” Now, it will be a challenge to translate what does “substantially increase” mean and what does “urgency” mean.

For the first time, we have accepted the goal of getting sustainable energy to the 2 billion people who are outside the modern energy net, who live on crop residues and firewood. And that energy system is even less sustainable than what you have in the high-energy economies and has immense consequences, for instance, on women’s health.

The commitment that we have to address is one of the great achievements of Johannesburg. We did much better than we could have expected on energy, and, for the first time, we have a major program endorsed at the highest level in the UN.

Did we keep the U.S. engaged? Yes. Throughout the process, even though President Bush himself did not come, the U.S. was fully engaged in the multilateral negotiating process. They made compromises. Remember, they came to Johannesburg saying, “no targets, timetables.” In the end, they accepted most of them. They also made serious commitments on partnerships: in water, close to $1 billion, and substantial amounts in agriculture, forests, and energy.

Where we did not fully succeed is in addressing some of the concerns of civil society on whether we could proceed on this volunteeristic path when it came to corporations, or intergovernmental agreements, because increasingly civil society sees a limit to how much can be achieved through this purely volunteeristic path and would like to see more.

Nor did we fully answer concerns about globalization. In the case of Johannesburg, on the question of the relative priority of trade agreements and multilateral environmental agreements, they finally agreed on language which would place the two on two on more or less equal footing, whereas earlier it was always assumed that the trade agreements have priority if there is a conflict of principle. But we still have a long way to go.

Let me spend a minute or two on what to do as we look ahead.

First, we have to implement the partnerships, the timetables, the targets that came out of Johannesburg, and translate them into actual ways of monitoring so that we get real results. That is what we are focusing attention on today: bringing people together to discuss what structures we need to set in place, how do we fold this into the country-level processes that we have set up, what global processes do we require.

I hope that by April, when the Commission on Sustainable Development meets, we will have a certain framework for monitoring many of the commitments.

How do we keep the corporate sector engaged? They were very enthusiastic in engaging themselves in Johannesburg, but they often have a tendency to say, “now we will do this on our own.” Now, how do we keep them engaged in this process, get them to accept that in today’s world they will have to learn to accept a type of multilateral discipline of the sort that governments have come to accept, because of the sheer power that they wield? I do not have the answer, but that is certainly one of the challenges that we face.

We will also continue to face other challenges in keeping countries engaged as the geopolitical situation changes, in making sure that we continue to get high political attention to all of these issues.

There is a longer-term issue which is important. Johannesburg inevitably, because it was focused on action, had what I call a “2015 vision,” focusing on the Millennium Goals for 2015, working backwards from that. But I keep reminding people that that is only half-way to sustainability. If you halve poverty, you are only half-way to sustainability. If you halve the number of people who do not have access to safe water and sanitation, you are only half-way there.

And, more important, there are many countries -- not just the industrial countries, even countries like India and China and Brazil -- where I cannot design today’s energy policy simply in the context of the 2015 goals. Today’s energy policy has to have a 2050 vision.

In 2015 the world will be about 50 percent larger than today. GDP will be three-to-four times larger. This will not be sustainable on the basis of today’s way of using resources.

If we can get a world which in terms of GDP is four times larger, then we can seriously talk of ensuring that there is no poverty anywhere, that there is electricity everywhere, that everybody has access to basic education and health. But in order to do that we have to ensure that this world with 50 percent more people, four times the GDP, uses resources in a manner which is far more sustainable than what we have today, and you cannot wait until 2015 to start that process.

Apart from the 2015 vision, there is a certain longer vision on sustainability of consumption and production, with very specific goals and targets in areas like marine biodiversity, marine resource management, chemical management. Much of that right now has to be implemented in the industrial countries.

One of the challenges that we have is to make sure that we don’t see the sustainability agenda as one for developing countries alone, that we preserve the focus on the industrial countries. The challenge is not simply to get money and technology from them for the developing countries, but to see also how we can maintain the pressure for policy changes in the industrial countries. Will we be able to do that in the UN process is one of our challenges, or will the UN process simply focus its attention on an agenda for developing countries, with perhaps a focus on our famous Commitment Number 8 on what the industrial countries need to do by way of trade and finance?

This longer-term vision of 2050 has to be kept by governments, without at the same time reducing their commitment to concrete actions to achieve the 2015 goals. That is one of the great challenges before the Commission on Sustainable Development: how to combine this very practical focus on results with the very necessary focus on long-term sustainability, because if we don’t do that, then we will simply find ten years down the line that we have to restart the whole process all over again.

I will stop and be happy to take questions.

JOANNE MYERS: Thank you for that very illuminating discussion on what took place.

Question & Answer

QUESTION: Years ago, I was much involved in environmental planning as part of the government task force in the Maine environment and through the Natural Resources Council of Maine. At that time, the state was the Appalachia of the north. They were heavily involved in trying to clean up the State of Maine. They did it by both governmental pressure and by getting segments of the private sector responsive to those needs.

One of the things that made it successful, when we competed against the paper industry, the poultry industry, the power industry, was not to squelch them but to make them responsive.

When we deal with the United States in Johannesburg, the concern is that the Bush Administration is worried that the so-called international communities will gang up on the United States, when they feel that the U.S. has been in the forefront of many of these moves to be responsive to environmental matters. That is what we are finding also in Western Europe.

When Jeffrey Sachs spoke here last week, he pointed out that the developed world is not really responsible. Most of the environmental problems are being caused by the less-developed world. And he recommended that there be a greater awareness of that.

To what extent have there been real moves made by the United Nations and others to get the private sector involved, since most of the major international corporations, like Shell, have been much more responsive to environmental needs when they develop in various areas, as opposed to in the past just extricating themselves? Instead of banging on governments of Western Europe and saying, “Look, you’ve got to be responsive to us,” bring these people in to help the developing countries, because you know that is the source of the problem. That will be the more responsive and responsible way of dealing with environmental matters, particularly in countries in Eastern and Central Europe, which have now made some big strides.

NITIN DESAI: This is perhaps one of the major forward steps in Johannesburg. The corporate sector, scientists, and local authorities gave us very high marks in a satisfaction survey at the Summit. Amongst governments, there was a little bit of a spread, but, on average, somewhere in the middle. And most NGOs gave us barely passing or below.

The corporations were quite active. Broadly speaking, I would say the European corporations have shown a far greater sense of engagement in multilateral processes, perhaps because they are more used to them because of European integration.

You have three groups. You’ve got the Shells and the BPs, who are now completely sold on the idea that sustainability has to be built into their corporate planning systems. Shell has internal carbon accounting for all of its projects. When they approve projects at the company level, they insist on carbon accounts being drawn up. BP says, “Beyond petroleum.”

Then you have groups like Chevron, who are probably somewhere in the middle, ready to show a certain degree of community responsibility, but not yet fully engaged in the multilateral process.

Then there are some like Exxon, which I will not mention, that are somewhere out there.

In the case of water, we have the private sector fully engaged, but it is far more controversial than private engagement in energy. Can we do this? We are getting there, including the U.S. companies, like DuPont, Dow, 3M, who are fully engaged in accepting that there has to be a sense of multilateral management.

In Rio, environmentally sensitive corporations were a minority. Today they are a large minority. We can make it part of the normal way of behavior of corporations.

I am not as concerned about that as about what some of the governments are doing.

QUESTION: I congratulate you on a pretty successful outcome. What didn’t come through strongly enough in the U.S. press was that there was surprising success in Johannesburg. It even turned into somewhat of a pledging conference. As you said, partnerships were formed, business was there for the first time and very engaged. The advocacy NGOs are always expecting Nirvana in a couple of years, and they say it wasn’t a success. You say it was a success.

The European press covered Johannesburg far better than the American press. I hope that part of that failure on the part of the American press to do a good job on Johannesburg will be corrected before the next Commission meeting on Sustainable Development.

NITIN DESAI: Part of the problem here is this great sense of confrontation between the environmental NGOs in the United States and the Administration in Washington on local environmental issues. They have to be schizophrenic, on the one hand, to oppose the Administration tooth and nail here and then work with the Administration in the global process. That will not happen.

They shouted down Colin Powell for a few minutes. Most of the slogans they raised were about issues here. That is part of the complication, which is not there in Europe.

As for the press, they had other preoccupations. Like I got knocked off the Lehrer news program because of Iraq. We have to be realistic. The public is far more interested in what is happening there than in Johannesburg. But on the whole we did much better on media coverage than most people were expecting.

QUESTION: I couldn’t agree with you more that it is nice to see how corporations have advanced into the process. But, on the other hand, civil society is right to be very concerned about the corporations in this process, because there is a risk that they have so much more power than the civil society. How do you manage that? And I wonder if you are thinking about real inequities of power.

MR. DESAI: After Johannesburg we need a commitment to look for some stronger measures of accountability and responsibility than we have had so far. This is a much broader concern in today’s world, when corporations operate in multiple jurisdictions with regard not just to environmental legislation but labor legislation, accounting standards, corporate reporting standards. How do you ensure a measure of truthful reporting, accountability? And to whom are they accountable? Are they only accountable to their shareholders, who may be only in one set of countries, or are they accountable to a broader community? What is this community to which they are responsible?

We don’t have a process yet which is capable of addressing this fully, except things that we are trying to do through the UN ¾ not just Johannesburg, but the Global Compact is another example, an attempt to connect the UN’s framework of values in human rights, labor standards and environment with corporate behavior.

QUESTION: Much of the twentieth century could be regarded as a grand economic experiment in efficient allocation of resources, where we had a large part of the world using a market-based economy to allocate resources and we had another large part of the world using quotas and standards. The market-based system is more efficient than the other.

Sustainable development is ultimately about efficiently allocating resources. I am struck that you haven’t mentioned once using market mechanisms to achieve your goal.

NTIN DESAI: First, sustainable development is not just about efficiently allocating resources. It is also about efficiently allocating responsibilities. If we had a broad enough framework of what we mean by allocation of resources so that the people who cause emissions and problems, short term or long term, are responsible also for solving them, yes. So to speak of simply leaving it to the market is not the answer to sustainability.

Take, for instance, oil spills. It is a combination of both law and market systems. One single judgment in the Exxon-Valdez case did more to improve tanker safety standards than almost everything else that we did. And there the market did work, because once you got the Exxon-Valdez judgment, charges were raised so much that sensible tanker owners had to bring in better equipment simply to be able to be allowed to go to the better ports.

So it is a combination of both. You need a regulatory/public policy framework to enforce responsibility. Do that and I have no problems in relying on the market. But half the time our problem is that we do not have the mechanisms which can enforce responsibility, and that is why we end up with regulatory interventions, which you have in this country in many different ways.

QUESTION: Can you give us some insight into the engagement in international institutions, such as the International Monetary Fund, the World Bank? In the World Bank, it is probably conceiving of and working on projects that parallel Johannesburg. And, coupled with that, the capitalization move from the international institutions into the private sector.

NITIN DESAI: First, the World Bank was pretty fully engaged in the Johannesburg process. There is far less of a gulf today between the paradigm of development the World Bank works with and what has emerged out of the UN conference process. They are fully committed on the Millennium Goals. But more than that, in terms of the policy frameworks which came from Copenhagen or Johannesburg or Rio, they are well integrated into the World Bank’s process, at least at the Washington level.

One of my concerns is that the World Bank has withdrawn too much from its old-fashioned infrastructure projects, and I wish we could drag them back in, because you cannot solve many of these problems unless you also have an improvement in productivity and an enhancement in productive capacity. All of it is not simply a matter of taking care of social and environmental consequences. We have an underlying economic agenda which we also have to fulfill.

The IMF is not directly involved in our process, in the sustainable development side. It is much more of a macro-economic institution. One of the great achievements of the past five years, particularly under Kofi Annan’s Secretary Generalship, has been the much stronger sense of collaboration between the different parts of the system, the UN and the Bretton Woods and the WTO. They need us and we need them.

QUESTION: To my way of thinking, and to the advocacy NGOs, Shell has a terrible record, particularly, for example, in Nigeria with the Ogoni people, and the problem is often that the market forces override the human resources or the human factor for civil society, and involving people in the communities in which corporations are functioning. The Ogoni people were exploited and were put in a situation where there was virtually civil strife between them and Shell.

Would you comment on this aspect of the concern of corporations for the human factor?

NITIN DESAI: I was focusing very much on the natural resource agenda. We need a broader framework of corporate responsibility, which touches on the social impact, particularly on local communities, which touches on the role that they play in situations of conflict, something which is receiving more and more attention now in the UN.

And certainly, you will find a corporation which is very good in one area which has been absolutely irresponsible in certain other areas. In many ways, a global compact which tries to combine a corporation’s performance on human rights, on labor rights, and on environmental standards together is an attempt at trying to get all of these things in one place. But I entirely agree, we still have a long way to go before we have this broader framework.

The GRI is not limited to the environmental impact, but also covers the social impact, and the standards and schedules that that they are laying down for corporate reporting.

QUESTION: Even with great difficulty, it is much easier to come to agreement in meetings and conferences than it is in the practical world of implementation. Based on your comments on the need for innovation and accountability, do you feel that what was agreed to in Johannesburg is truly going to be implemented in a timeframe? And your 2050 timeframe would seem to make it very possible that there will be a less than equitable situation. How much unrest will there be in these areas if it takes that long for progress? The infrastructure of countries and organizations doesn’t like to change.

NITIN DESAI: There are two things which were missing after Rio. One was that Rio was not concrete on goals and targets. It was very strong on the long-term policy framework, but no specific goals. They did not have an overarching medium-term framework. It stated “we must move towards chemical safety,” but not “we must do this, this, this to get to chemical safety by 2010.”

Second, after 1992, there was a tremendous erosion of resources because of the changes that were taking place in the world.

Both of these are different now. The Millennium Declaration has given us a medium-term framework. We are setting in place fairly strong mechanisms on what countries should be doing for implementing Millennium Goals and getting a lot of support for that, and I hope we can fold in what comes out of these other processes.

Our weakness is mechanisms of accountability on the industrial countries, and that is where we need to work harder, to see what is the counterpart of these Millennium Goals for the industrial countries and how it is that we can enforce accountability there.

And second, we have some serious commitment of resources in Monterrey. We are close to an extra $13 billion a year by 2006. Now, that is not all of the money that we require, but it is certainly a very important first step.

So we have these two things working for us to make sure that we don’t lose the pressure for implementation, at least as far as the goals on development and connecting development with natural resources are concerned. If we can add to this a strong sense of accountability on big industrial countries and the large transnational corporations, we can get there.

JOANNE MYERS: I thank you very much for a wonderful discussion.

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