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Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP
Asia Society Forum
25 November 2002
(Check against delivery)
A copy of the exposure draft of indicators and methodologies for public environmental reporting is available from www.ea.gov.au/industry/sustainable/per/indicators.html
Thank you Hugh Morgan. It was a great pleasure to receive your invitation to open this important event.
I congratulate the Asia Society AustralAsia Centre, the Business Council of Australia, and the World Business Council for Sustainable Development for collaborating to organise this forum.
Tomorrow, as it happens, is the first anniversary of my appointment as Minister for the Environment and Heritage and I am very pleased to be here today in such auspicious company to mark the end of my first year in the portfolio.
Much has happened in our world these past twelve months that we could never have anticipated. We closed 2001 still in shock from the terrorist attacks on New York City and Washington - and we approach Christmas 2002 with heaviness in our hearts at a more recent atrocity much closer to home, and the realization that there is a clear and present danger in our region and perhaps even within our shores.
Yet as the Prime Minister has said, Australians will not be deterred from going about their lives by these threats, and the insane politics of extremism will not deter us from addressing some of the profound long term issues we face today, of which achieving sustainability for our society and our globe is one of the more important.
Given the nature of today's forum I want to take this opportunity not only to address the goal of ecologically sustainable development that we share with so many of our Asian neighbours, and particularly, the role of business in the achievement of that goal, but also to reflect on some broad but important features of the national and international debate on environmental issues.
For the objective of sustainability that gives direction to the topic I have been asked to speak about today is by no means universally accepted as the appropriate goal of environmental policy. This is the final week of the Victorian State Election campaign, in which we have seen the Regional Forest Agreement for Victoria torn up by the State Government in the pursuit of Green support.
The Regional Forests Agreement has been acknowledged up to now as a scientifically based and appropriate balancing of environmental, social and economic considerations. The RFA accepts, properly, that the forestry industry has for some time now been conducting its business in a sustainable manner, yet that sustainable industry has now been told that sustainability is not enough. It has been told that there is no place for even a sustainable industry in the forest environment of the much loved Otways, not on any scientific basis, but because it does not meet the requirements of those who want industry out of that environment, regardless of sustainability. This is the view that the environment can only be preserved if people are shut out.
It is therefore important that we understand the central importance of sustainability to protecting the environment in a way that includes a place for people, and in the present context, for business.
To speak of sustainability is to speak of a world in which human beings, as members and products of the natural world, are striving to live in balance with that world - to act in ways where the well-being of the plants and animals with which we share this planet, the quality of its land, its waters, its atmosphere, its vegetation are improving rather than being degraded and which will enable this generation to pass to their children a world where options are expanding rather than diminishing or pre-empted.
The basic assumption of this quest is simply stated. It is that human beings are part of the natural world and of the environment. While many of the practices of human society in the past have damaged and degraded that environment, that is not inevitable. Business enterprise can be conducted in a sustainable way, and the significant shift in the culture of business towards a concern for sustainability is a strongly positive development.
It is a sentiment that has been shared across space and time, echoed in Plato's words in the Timaeus:
Then God, having decided to form the world in the closest possible likeness to the most beautiful of intelligible beings and to a Being perfect in all things, made it into a living being, one, visible and having within itself all living beings of like nature with itself.
Homer put it sweetly in the Iliad:
As is the generation of leaves, so is that of humanity. The wind scatters the leaves on the ground, but the live timber burgeons with leaves again in the season of spring returning. So one generation of men will grow while another dies.
It is a notion carried continued through time. In the twelfth century, one French scholar was moved to write: “Just as an angel has his place in the universe, so man has his”.
The notion that man was part of the world around him was embedded in the word ecology, that is derived from icos meaning house and logos meaning knowledge - we understand where we dwell.
The criterion of sustainability is one that people are increasingly applying to all our activities: our industries, the operations of our governments, our urban communities, our recreations. There is hardly an industry in Australia today which has not addressed, or is not addressing, the extent to which it contributes to or detracts from sustainability. Purchasers in the marketplace are increasingly wanting to know whether the products and services they buy are produced in a sustainable manner. Financial institutions enquire more frequently whether the enterprises in which they invest are managing the medium and long term risks inherent in producing in a non-sustainable manner.
The Prime Minister has established, and personally chairs, the Sustainable Environment Committee of the Cabinet which brings a whole-of-government approach to the issues of sustainability across the range of government policies.
Increasingly the policy frameworks within which government seeks to solve problems arising from unsustainable practices - such as the $2.7 billion Natural Heritage Trust or the $1.4 billion National Action Plan for Salinity and Water Quality - involve partnerships between all levels of government - Federal, State and Local, and partnerships with communities, conservation groups and landholders and producers as well. The search for sustainability is an enterprise in which all members of the community are increasingly involved - as they must be. Sustainability is not something that can be handed down by government fiat. It can only be achieved by the efforts of all of us.
Sustainability is not a philosophy opposed to economic growth. On the contrary, it is one that seeks to achieve growth in productivity and standards of living by including the relevance of environmental considerations in economic and social decision-making. Agriculture in Australia cannot continue to grow if it ignores the huge salt load underneath much of the land, or employs water usage levels which empty our rivers and make no allowance for recurrent drought; our fisheries will not survive if the ecological limits of sustainable takes are ignored; our communities will not be healthy and productive if our industries ignore the need for clean air and unpolluted water.
The pursuit of sustainability is not about ending economic growth or returning to the practices of smaller and simpler societies. It is about mobilizing our intellectual and technological resources to better understand the consequences of our actions, so that we can replace unsustainable practices with sustainable ones. And it is about retaining and enhancing the extraordinary adaptive capacity inherent in free and democratic societies and market economies, for it is this quality above all others that gives our world the real prospect of achieving a sustainable future.
Business has a key role in ensuring that our economies move towards sustainability. I have been impressed since becoming Minister at the growing emphasis in Australian industries on pursuing ecologically sound policies, encapsulated in such initiatives as Eco-Efficiency Agreements and partnerships with conservation and environmental organizations.
This point is equally fundamental when we turn to the desire of developing countries for sustainable development. It was embodied in the recognition by all countries at the recent World Summit for Sustainable Development in Johannesburg that not only is there no conflict between the pursuit of sustainable development and the elimination of poverty, but that the two go hand in hand. Much of the world's poverty is indeed caused by unsustainable farming practices leading to desertification, fishing and development practices leading to the destruction of the fish nurseries in coral reefs and river estuaries, energy production through the burning of biomass which leads to the destruction of forests and massive air pollution, and failures of governance which undermine the rule of law and deter private investment.
As I have said, not all agree with this. There is a counter-view, that basically rejects the notion that mankind can live sustainably as part of the environment, that a concern for the environment implies opposition to growth, to the liberalization of trade to globalisation. That is fortunately not a view shared by many of the leading environmental organizations today, but is still one that expresses itself from time to time.. This is a view that the only acceptable environmental policies are those that exclude human activity from interaction with the environment, to the maximum extent possible. It is frequently buttressed by the language of doomsaying, purporting to demonstrate that people and their enterprises are inevitably the destroyers of the environment.
There are those who identify with the words of Christopher Manes, who sees no legitimate place for man in the environment. Manes wrote in his 1990 book Green Rage, that:
By identifying anthropomorphism as the root of our troubled relationship with nature, Deep Ecology was taking on more that just a dubious moral precept. it was attacking a cherished principle of the enlightenment, the raison d'etre of capitalism and socialism, the pretension of the major religions of Judaism, Christianity, Islam, Hinduism, Buddhism, the central myth of civilization"
These are the words of those who argue - indeed demand - that our environment is akin to a museum exhibit - “by all means look, but under no circumstances touch”. Their language is coloured with words of restriction, prohibition and compulsion.
It is a view that rejects the central role of science and knowledge in managing the environment, indeed reject the notion that the environment needs to 'managed' at all. By rejecting the enlightenment it attacks reason, and replaces reason with assertion. In this view of the world the environment is preserved to the extent that people are kept out, to the extent that industries are closed down and growth halted.
It is an argument supported by few people and no facts, but is nonetheless noisy enough to distract the debate from time to time.
The majority have more measured views of the role of mankind .
Achieving the balance between the environment and development is the work agenda before us. Ensuring that environmental considerations are factored into our decisions without imposing unnecessary costs nor losing real opportunities for productivity gains is the challenge of policy - for governments, for businesses, for communities, for landholders.
Our aim is to hand over a nation in a condition at least as good, if not better than the condition in which it was bequeathed to us. To be able to do so will require more than just large funding from governments. We will need to find real and lasting solutions to the problems that confront us, and we will be able to do so only with the support of the governments at all levels, industry, education, agriculture, and the community at large.
The way in which we will work with our neighbours in Asia towards sustainable development necessarily reflects and embodies features of our approach at home. Let me attempt to draw out of this discussion then some of the features of our domestic policy approach, and indicate how these are influencing the very considerable interactions which are now developing internationally in our region of the world.
Building capacity through science and education, governments which pursue policies which encourage investment and reflect a whole of government philosophy, internalizing environmental costs to decision-making, governments empowering local communities, action through partnerships - these are strategies that are standing us in good stead nationally to address the issue of sustainability, and they equally underpin some of our most effective efforts to work with our Asian and Pacific neighbours towards sustainable development and the elimination of poverty.
Partnerships from the World Summit
The outcomes of the recent Summit in Johannesburg, criticized by those whose policy preferences were for restraints on trade and development, very much reflected the philosophy of sustainability as I have outlined it..
There were three formal outcomes from WSSD: the Johannesburg Declaration on Sustainable Development; a Plan of Implementation; and a large number of voluntary partnership initiatives called 'Type Twos'.
About 280 of these partnerships have been signed, variously involving governments, businesses, international organisations and NGOs. Businesses are involved in over 90 Type Two Partnerships in a wide range of sectors including energy, water, health, agriculture, tourism, forestry, fisheries and biodiversity.
Australia has initiated 12 partnerships and is contributing to a number led by other countries. We are pleased to be working in close cooperation with partners from developed and developing countries, but also with international organisations such as the World Bank and the UN Environment Programme on a range of issues.
These initiatives also provide a framework for involving private sector interests. For example, Australia is a partner in a global effort to clean air in developing countries by improving fuel quality.
The Global Partnership for Cleaner Fuels for Cleaner Air will focus on phasing out lead in petrol and introducing vehicle and emission control technologies to reduce emissions.
We are working with key players including the International Fuel Quality Centre, automobile associations from Europe and Japan, and other organisations to reduce the impact of vehicular emissions on human health.
In addition to the partnerships already announced, we are looking at further partnerships with domestic as well as regional and international partners.
I encourage business leaders to engage with the Government and with other players to develop partnership initiatives which demonstrate practical steps towards sustainability.
The Summit produced many other practical and achievable outcomes. Contrary to much of the reporting, the Plan of Implementation identifies thirty-seven (37) time-bound targets, including one to halve by 2015 the number of people in the world without decent sanitation.
Australia worked hard to make the outcomes practical and sensible. Good outcomes have been achieved on Australia's priority issues, including an ambitious oceans agenda.
The energy agenda balances the issue of access for the poor with encouragement for greater use of renewable energy sources.
No issue occupied more of the time of Ministers in the development of the Summit plan of action than energy. The G77 and China - the major bloc of developing countries - saw the central issue as providing access to energy (other than burning biomass), and to cleaner energy, rather than renewable energy as such. They were less than impressed with Europe's focus on renewable energy at all costs.
Given the priority of the alleviation of poverty, a more important need at the present time was to clean up fossil fuels and institute energy efficiency policies so that their people could obtain energy in the short term, with renewable energy having a place, but realistically unable to provide the access required on current technologies. China noted that its recent energy deal with Australia - based around a fossil fuel - LNG - would actually be a positive step for global greenhouse emissions. In fact the LNG contract will reduce China's greenhouse gas emissions by 7 million tonnes a year while adding one million tones to Australia's total emissions - a significant gain for global greenhouse gas emission.
Australia, working with Mexico and APEC members of the Energy Working Group is identifying impediments to energy supply in developing countries and investigating ways to increase the uptake of alternative fuels in developing countries many located in the Asia Pacific. The World Summit provided an opportunity to link this APEC partnership with a significant US energy initiative, which was announced as a Type II partnership. This Australia/US Energy Partnership will help empower communities to determine the best ways to meet their energy needs in an efficient and environmentally friendly way.
A second area where Australia played an important role at the World Summit was in the promotion of a number of partnerships focused on oceans management. These built on Australia's world leading role in the development of integrated Oceans Policy through the National Oceans Office, and on the high level of scientific work we are undertaking in oceans and climate monitoring through the CSIRO and Bureau of Meterology, and the Australian Antarctic Division.
Australia highlighted the importance of better management and knowledge of the world's oceans -its deep sea biodiversity, its coral reefs and coastal habitats - to the health and wealth of more than three quarters of the world's people.
Our oceans partnerships with many of our Asian neighbours aim to add to knowledge of ocean climate patterns, help to combat Illegal, Unreported and Unregulated fishing and to link and build capacity among coastal communities, coral reef organizations and industries to ensure healthy and long-term sustainable livelihoods from healthy and well managed coral reefs and fisheries.
I should also make the point in this context that Australia is at the forefront of the international effort to conserve biodiversity beyond national jurisdiction. The diversity of species in the deep oceans is estimated to be the same as that found in tropical rain forests.
This area of the planet has not received much attention as we know so little about the species living in the middle of the deep oceans. Australia will be hosting a High Seas Biodiversity workshop in the first part of next year as an important first step in filling in these gaps.
The High Seas are the last of the “global commons” and we strongly believe it is important to be cautious and protect an area that belongs to all of us.
In many respects the Oceans outcomes of the Summit were an expansion of the work done by Australia and its 20 Asia-Pacific Partners earlier this year at the first APEC Ocean-related Ministerial Meeting held in Seoul. At the Meeting Australia's initiative on better management of coral reefs was supported by many countries, in particular Indonesia and Thailand.
The APEC Ministers acknowledged that the world's largest area for coral reefs with the highest biological diversity is under threat. Some 34 percent of coral reefs in South East Asia have already been lost. Our countries all agreed that we have a key responsibility to address this continuing and alarming trend urgently, especially given coral reefs' importance to our economic, social and environmental well being.
Globalisation and Governance
Chapter Five of the Plan resulting from the World Summit deals with globalisation, and strongly encourages corporate responsibility and accountability.
While there was nothing prescribed by the Summit for the private sector, the messages to business about taking responsibility and taking action are clear.
Australia worked strongly toward achieving the Summit's support for globalisation, and for good national governance. National institutional frameworks that work well, the rule of law, and transparent and reliable government processes are essential for trade and investment, for economic growth and for development to be sustainable.
International and national good governance and international trade and investment will be critical to meeting this target. This was central to Australian support of the Summit's emphasis on the establishment and maintenance of solid democratic institutions, the rule of law, peace and security, fair and transparent legal systems, open and transparent financial markets and sound macroeconomic policy.
Australia has backed this belief with action: we will be providing $355 million in 2002-03 to address good governance issues in developing countries as part of our aid programme.
Support for trade liberalisation and removal of developed country subsidies was a key step toward sustainable development and poverty alleviation.
For the first time, many developing countries acknowledged the need to shift toward more self-reliant development models, recognising that most resources for development, poverty alleviation and health improvement will come from trade and investment rather than aid.
Without this fundamental framework, developing countries will find it difficult to attract investment and grow their economies - the pathway for many people to achieve a better life.
Balancing social cohesion and governance, environmental protection and economic development is a dynamic art. It is simply impossible to sustain improvement in any one of these areas by acting on it alone.
Sustainability and Market Access
So what do the challenges of WSSD in the context of corporate governance mean for companies who have, or are interested in, business in Asia?
It is evident that access to international markets no longer depends just on price, quality and timely delivery, but increasingly on the reputation of the company in the areas of environment and social responsibility and on the sustainability attributes of products and services.
A recent report to the Prime Minister's Science, Engineering and Innovation Council identified a number of factors driving demand for sustainability, including consumers, the investment community, the supply chain, trade agreements and government regulations.
What this all boils down to is that sustainability performance is increasingly a factor in a firm's competitiveness both domestically and internationally.
While we may mainly think of European markets leading the way on such demands, these demands will become increasingly important in Asian markets as well.
Rapid economic growth in East Asia has produced growing wealth and the emergence of a large middle class. Increased wealth brings with it an increased focus on issues like environmental and social responsibility as communities look beyond their immediate needs for food, water and shelter.
Asian countries have their own set of serious environmental problems, such as air pollution as exemplified in the Asian Brown Cloud.
The Beijing Olympics in 2008 has increased the focus of the Chinese on the need to fix environmental problems in the lead up to this showcase event.
As more attention turns to solving these problems in our region, opportunities for Australia, with good technologies for pollution prevention and control, will continue to open up. Our proximity, and some well established trading partnerships, are also an advantage.
But we need to be mindful of the competition, particularly from Europe and North America where companies are sometimes heavily subsidised to enable them to enter Asian markets.
The World Bank and other multilateral environment institutions are now big sponsors of projects in Asia and environmental performance is central to securing funding from these sources.
To help explore opportunities in the Asian region the Government has supported environment industry delegations to China, Indonesia and India.
Australian companies are beginning to have some success with solid waste management and waste water treatment projects in China.
The opportunities are not restricted solely to companies selling environment-specific goods and services. For example, the strong environmental credentials of Australian mining companies have Indonesia looking to learn from our experience.
Other Australian technologies showing promise in the Asian region are as diverse as clean coal technology for power stations, and urban air pollution forecasting developed for the Sydney Olympic Games.
This brings me to the issue of climate change.
Prominent among our international concerns, and those of our Asian and Pacific neighbours, is climate change.
Climate change is truly a global issue. Action by one country or one region cannot effectively address changes in the world climate system. We need a global approach - to get the science right, to reduce emissions in all of the major emitting countries, and to ensure effective adaptive action.
While we are greatly concerned at the failure of the Kyoto Protocol to cover 75 per cent of global emissions, and at its failure to include any pathway for the involvement of the developing countries, we are determined domestically to work to achieve the target we negotiated at Kyoto, and internationally to work in partnership with other states to enable an effective response.
Australia is a nation that is vulnerable to the consequences of climate change, as we have already seen with coral bleaching on the Great Barrier Reef and a marked decline in rainfall in south-west Western Australia, with rising seas are a very real concern for our Pacific Island neighbours.
As such, we are at the very forefront on taking greenhouse action at home and encouraging action abroad in both developed and undeveloped nations.
Our APEC and US related energy initiatives are a part of this global response. Earlier this year I concluded a Climate Action Partnership with the United States under which our government agencies, scientists, and businesses are now working on 19 projects covering such matters as new technologies for carbon dioxide abatement and sequestration, better understanding of the global climate system and effective monitoring and abatement. Among these are several projects with our Pacific Island neighbours aimed at building their capacity to monitor and respond to the consequences of global warming.
In New Delhi earlier this month at the Eighth Conference of the Parties under the UN Framework Convention on Climate Change (COP8) I held discussions with Japan who have indicated positive interest in our suggestion for a climate partnership with them. The benefits of climate action partnerships have also been raised with Korea, the EU and New Zealand.
Four elements will underpin the development of Australia's forward climate change strategy:
We are seeking advice from industry and from environmental advocates on how to achieve further abatement, especially those related to technology solutions and foundations for a longer term response; cost effective abatement opportunities; economic adjustment and avoidance of long term emissions lock-in and balancing policy flexibility and investment certainty.
We will also work to identify key strategies to reduce Australian industry's potential exposure to the impacts of greenhouse response, in particular through the take-up of emergent technologies.
Australia's existing initiatives to reduce emissions of greenhouse gases backed by the billion dollar investment by the Howard Government will deliver by the end of this decade the equivalent of the removal of every passenger car from Australia's roads.
Internationally, we will continue to push for genuine global action. There were some encouraging signs at the recent Conference of the Parties on Climate Change held in New Delhi that to address the issue of climate change, the global community must move beyond rhetoric and symbolism to the real and global task of reducing greenhouse gas emissions.
Reporting Environmental Performance
As the strategic importance of the environment grows for business, reporting on environmental performance will be a key tool in communicating with investors, as well as other stakeholders.
I'm aware that a number of global investors are starting to dictate that the companies they invest in must produce an environment or sustainability report in order to give confidence that environmental risks and responsibilities are properly managed.
The Government has been actively encouraging industry to consider the benefits of environmental reporting for a number of years.
In March 2000 my predecessor, Senator Hill, launched the Australian Framework for Public Environmental Reporting and funded extension officers to work from the BCA, the Australian Industry Group and ACCI.
For some time my Department has provided a library of Australian corporate environmental reports on its website as a handy reference tool.
I think it is fair to say the 'Framework for Public Environmental Reporting' has played an important role in raising the level of discussion and understanding in Australia of what this type of reporting is all about.
Some 10,000 copies have been distributed over the last two and a half years. However, while most companies are now aware of what public environment reporting involves, the number that have actually taken the step to go on and produce a report is small - in the order of 100 organisations. I think the time for action is now. 'I commend the National Australia Bank (NAB) and the Institute of Chartered Accountants in Australia (ICAA) on their recent commitments to produce a triple-bottom-line report next year.
To encourage more organizations to take the step in producing a public environment report, we are producing “An Australian Guide to Indicators and Methodologies for Public Environmental Reporting”.
The Guide is designed to help practitioners deal with the hands on issues of selecting and calculating relevant reporting indicators.
I am pleased to be able to release an exposure draft of the Guide today.
The Guide is intended to provide assistance to business, so I would appreciate your help in making sure it is a valuable and practical tool. I encourage you all to provide comments back to may Department by 20 December 2002.
One of the notable outcomes from the World Summit on Sustainable Development was the widespread recognition and acceptance of the Global Reporting Initiative's (GRI) '2002 Sustainability Reporting Guidelines.
As we are all aware sustainability issues are much broader than just the environment. I should therefore mention that my colleague Senator Amanda Vanstone and her Department are developing a Social Indicator guide. I welcome this move to take the running on the social dimension of the Triple Bottom Line.
In drawing to a close today I want to acknowledge again the huge increase in business interest in sustainability over the last decade. This has been recognised by the change in government and NGO attitudes to the business sector's role, and clearly demonstrated by the level of private sector involvement at Johannesburg.
It is evident that for Australian businesses to be competitive in global markets and to attract investment, they have to strive for sustainability.
Many Australian companies are rising to this challenge, and these ranks are swelling daily, as indicated by the attendance here today.
I hope that with mechanisms such as the Australian Guide to Indicators and Methodologies for Public Environmental Reporting, the Government can work in partnership with industry to deliver better economic, environmental and social outcomes for all.
Achieving sustainability is about trust - a recognition that with knowledge and participation the Australian people from farmer to industrialist, from consumer to local government will realize that enlightened self-interest and care of the environment are part and parcel of our future actions.
Most importantly, sustainability will be achieved through a global partnership - a sharing of ideas, of aspirations and of technologies. It will require knowledge and communication. As we strive towards this I have no doubt that the countries of Asia and Australia will play a critical role much of it together.
It is with great pleasure that I declare this forum open.