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Senator the Hon Robert Hill
Leader of the Government in the Senate
Minister for the Environment and Heritage

Road to Rio+10 and Beyond
Speech to the Business Council of Australia / World Business Council for Sustainable Development

Melbourne, September 17 2001

In recent years the concept of sustainability or the triple bottom line accounting, has emerged in economic thinking and is slowly working its way into the corporate world. The World Business Council for Sustainable Development has been at the forefront of this change and I appreciate its support of our own Business Council of Australia.

The triple-bottom line approach is simply an acknowledgment that the decisions we make either as a company, an industry sector, a community or a government not only have an economic implication but also both a social and environmental dimension. This approach demands that we consider the social and environmental impacts of what, to date, have been solely economic decisions. The costs of our actions can no longer be judged simply in terms of dollars and cents - we must also factor in the social and environmental costs.

In time such an approach should see our business leaders and our key economic thinkers start providing responses to business surveys that show their concern and interest for the state of the natural environment and the broader well-being of the community.

Environmental performance and social responsibilities should become top of mind responses for all business leaders.

Next year's United Nations World Summit on Sustainable Development provides Australian industry with another opportunity to broaden its traditional economic focus to incorporate social and ecological sustainability issues. The summit, to be held in Johannesburg, has been dubbed Rio+10 as it marks the tenth anniversary of the first such meeting, the so-called Rio Earth Summit in 1992.

In some ways the choice of Rio+10 as a title is regrettable as it implies that this effort is somehow anchored in the past. From personal experience there is a tendency at such meetings to dwell on what may or may not have been done in relation to agreements reached at Rio rather than focussing on finding ways to re-enervate and re-invigorate the commitment to new action. Our focus must be on the next ten years and beyond. Where do we see the world is terms of sustainability in the year 2012 and how do we go about getting there? In particular, what should be Australia's contribution?

This is where Australian industry has an important role to play.

A most important contribution the industry can make to sustainable development is the contribution of innovative solutions to environmental problems.

In the months leading up to the Johannesburg Summit, Australian industry should be engaging both with the government and non-government bodies to ensure that its ideas and views are being heard.

In doing so, Australian industry should not be backward when it comes to putting on the public record your efforts and achievements to date in addressing sustainability issues.

The lessons you have learned and your ideas for future developments in this debate should be shared with others.

It should also be remembered that Australian industry operates within a global market place. Sustainability has become a global debate, one in which your competitors in other nations have become increasingly engaged in. It makes good business sense, therefore, for Australian industries not only to be involved in the debate but also to be at its forefront.

There can be no question that Australia has taken heed of the Rio message and has taken significant steps along the path to sustainability.

When you consider what we have achieved so far and assess everything that we are doing now that we weren't doing ten years ago you gain a sense of great confidence that as a nation we have the capability, the commitment and the expertise to meet the challenges ahead.

Since the Coalition came to office in 1996, there have been some truly remarkable advances within Australian industry in terms of its approach to the environment.

One of the first surveys I saw on coming to office was that the Australian public rated environmental protection as being of equal importance to economic growth.

Our government is justifiably proud of the strong economic growth Australia has enjoyed since 1996, particularly when viewed in the context of the economic troubles experienced by most other nations in our region.

But we are also proud of the high priority that we have placed on restoring and protecting our environment. We have been determined to ensure that our economic growth should not come at the expense of our natural environment. We have achieved this by ensuring that the environment and the principles of ecologically sustainable development are central to all government decision making processes.

In 1996 we reorganised and reinvigorated the environment bureaucracy with a view to strengthening its capacity to engage in whole of government policy formulation. Since that time the environment portfolio has taken the lead role in key whole of government policy positions such as our response to the challenge of global warming and the development of Australia's first oceans policy.

The Commonwealth's environmental legislation has undergone a complete overhaul and the resultant Environment Protection and Biodiversity Conservation Act embodies the principles of ecologically sustainable development.

We have boosted spending on the environment to record levels. In the six years since the Coalition came to office Australia has spent almost three times as much on the environment as it did in the previous six years.

The budget allocation for the environment in the final year of the Keating government, 1995/96, was $208 million. The current financial year's allocation for the environment is $684 million - more than three times that amount.

In terms of dollars invested in environmental works, John Howard is arguably Australia's greenest-ever Prime Minister!

This rapid expansion in environmental spending has enabled us to engage the community through the $1.5 billion Natural Heritage Trust which has already funded more than 11,700 projects involving an estimated 370,000 people. We have now committed a further $1 billion to this massive effort to restore and protect our land, our forests, our rivers and our coasts and oceans.

The push toward sustainable management of our natural resources has been further boosted by the Prime Minister's $1.4 billion National Action Plan on Salinity and Water Quality.

Importantly, we have sought to engage industry at all levels in the challenge of delivering truly sustainable development.

Most of the industry sectors or companies that we have worked with have discovered that improved environmental performance actually delivers better bottom line economic results through reduced inputs and waste management costs. We have aimed to cooperate with these industry leaders to not only maximise the environmental benefits of their efforts but also to promote the message of their success to others in their particular industry sector.

Through our Business of Sustainable Development initiative we have signed agreements with 13 industry associations to promote best practice environmental efficiency to their members in some 350,000 companies.

We have promoted the adoption of environmental accounting as a part of every day business disciplines. We have established a National Pollutant Inventory giving the public access to information about the emissions of industry into their local environment - a process that requires businesses to account for their emissions. We have developed an Australian framework to help companies make voluntary public environment reports and developed a website for the public to view such reports. It is the adoption of such internal business disciplines that will drive the move toward ecologically sustainable development.

Where it has been necessary, we have accepted legislative change to ensure that those companies which seek to do the right thing do not suffer a competitive disadvantage at the hands of those who refuse to voluntarily change. One such example has been the development of the world leading National Packaging Covenant involving more than 300 companies and industry associations in an effort to reduce the environmental impact of packaging products and develop economically viable kerbside recycling.

To legislatively protect those companies that have voluntarily chosen to do the right thing, the Commonwealth developed a National Environmental Protection Measure for used packaging materials with the States and Territories.

Waste reduction has been a major success story for Australian industry. Again the Commonwealth has worked with industry through programs such as the $6 million Waste Management Awareness program under the Natural Heritage Trust.

With the cooperation of industry Australia has become a world leader in recycling. Australians now recycle 70 per cent of old newsprint, 92 per cent of paper packaging, 64 per cent of aluminium containers, 60 per cent of liquid paperboard used for milk and juice cartons, and 40 per cent of steel cans.

Plastics companies have agreed to increase kerbside collection rates for PVC bottles from 5 per cent to 25 per cent within three years - diverting more than 20 million vinyl bottles from landfill each year.

Again the Commonwealth has chosen to legislate to promote better practices in waste management by introducing an environmental levy on oil to support the collection and recycling of the estimated 100 million litres of waste oil dumped in the environment each year. We have also committed $60 million toward the necessary infrastructure and technology required to make this effort a success.

The Natural Heritage Trust has also been able to fund innovative projects to tackle the impact of waste water on the natural environment.
In the construction industry, the Waste Wise Construction Program has seen cuts of up to 90 per cent in the amount of waste from major construction projects.

All of these success stories are confirmation that environmental responsibility can go hand in hand with improved economic performance. Being environmentally responsible doesn't mean that we have to stop growing our economy - it just means that we have to be smarter about how we achieve that growth.

This is a lesson which is an integral element of our response to possibly the greatest sustainability challenge facing Australian industry - the challenge of climate change.

I have been heartened by the increasing levels of acceptance within Australian industry of the reality of climate change and the need for precautionary action to reduce the growth in our greenhouse gas emissions.

Australia played a pivotal role in the development of the Kyoto Protocol in 1997 and as chair of the Umbrella Group of nations has played a leading part in the international negotiations of the rules under which the Protocol will operate.

What the Howard Government achieved for Australia in Kyoto was a fair but challenging target - a target which requires us to dramatically reduce the expected growth in our emissions from 43 per cent above 1990 levels down to just 8 per cent by 2012.

It is a target which requires Australia to accept an economic burden comparable to that accepted by other developed nations. In other words, it requires us to do our fair share.

Australia moved quickly after the Kyoto conference and was among the first nations to sign the Kyoto Protocol.

This was not done as an empty gesture but as a signal of our commitment to act prudently and responsibly on climate change issues.

Again the Prime Minister made a major financial commitment to the environment with Australia establishing the world's first national greenhouse office and committing almost $1 billion to programs to reduce our greenhouse emissions.

While the policy position of the United States has cast some doubt over whether the Kyoto Protocol will ever come into force, Australia has been clear on its determination to meet its Kyoto target regardless.

We have stated that the $1 billion of programs we have devised - a financial commitment equivalent in per capita terms to those proposed by other nations - will go ahead.

We have developed a balanced mix of policy responses including voluntary industry programs such as the Greenhouse Challenge, mandatory requirements such as legislation to increase the amount of energy produced from renewable sources, and grant programs to support the development and uptake of renewable energy technology.

We already have seen some signs of success in the effort to decouple of economic growth from the growth in our greenhouse emissions. The latest National Greenhouse Gas Inventory shows that our emissions grew by 1.1 per cent in 1999 while over the same period our economy grew by 5.4 per cent.

In seeking to fulfil our Kyoto commitments we have again sought to work with Australian industry. We have recognised that industry has significant capacity to influence our emissions profile and we have sought to cooperatively engage them to put that capacity to good use.

For example the Coalition has committed more than $27 million to the successful Greenhouse Challenge program. This program has seen more than 600 companies and industry groups voluntarily commit to cut their expected emissions by approximately 23 million tonnes.

As part of the $1 billion suite of programs, the Howard Government committed $400 million to a Greenhouse Gas Abatement Program to provide funding to projects on a competitive tendering basis which would deliver the maximum amount of greenhouse gas reductions per dollar invested. The first year of the program saw more than 100 applications from business, local government and community organisations.

Many of the successful projects came from large companies who are large emitters of greenhouse gases. In providing financial incentives to the tune of $102 million for these projects, the Commonwealth leveraged more than $760 million in private investment and secured estimated greenhouse gas reductions of 17 million tonnes of CO2 equivalent.

Our government believes that companies who are prepared to take a financial risk to deliver a better environmental outcome should be supported in their efforts.

If I could leave with you one final example of the benefits of working cooperatively and building on the commitment of companies who are seeking to do the right thing by the environment, one year ago today I announced the development of a program that would enable consumers to 'buy green' and contribute toward the reduction of Australia's greenhouse gas emissions.

The 'Greenhouse Friendly' certification program is now officially open for business. This program allows businesses to obtain a Commonwealth Government greenhouse certification for their products or services by offsetting the product or service greenhouse gas emissions through equivalent greenhouse gas abatement achieved elsewhere.

As promised one year ago by Lord John Browne, CEO of BP, BP Australia has been the first company to formally apply for a certification of its 'Ultimate' fuel under the Program. And, assuming the company meets all of the rules for the certification, we should start seeing the first 'Greenhouse Friendly' certification marks appearing on BP Ultimate petrol pumps around the country shortly. Other industry leaders won't be far behind.

In summary, we want Australian industry to be proud of what it has achieved in the past ten years in the challenge of achieving sustainability and we want it to be excited about the challenges ahead and confident that it can meet those challenges. We look forward to continuing to work in partnership with business toward this goal.

Commonwealth of Australia