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MAIN COMMITTEE CONTACT GROUPS

FINANCIAL RESOURCES: The informal-informal meeting on financial resources worked through the night on Tuesday, finishing its discussions at 4:30 am Wednesday morning. After this marathon eighteen-hour session, the eight developing and eight industrialized country negotiators emerged with a final "Chair's draft" that contained only four outstanding bracketed paragraphs. These will either have been dealt with last night by the Main Committee or will be the subject of discussion today in meetings to be held at the ministerial level.

This new text was the subject of discussions yesterday morning at meetings of the regional groups and later in the G-77 meeting on finance. Many observers commented that the likelihood of approval for the text by the Main Committee depends on whether the regional group chairs will be able to maintain group "discipline", ie. whether they will succeed in securing adherence with the decisions taken on the groups' behalf the night before. Participants in yesterday's G-77 meeting reported that there was general acceptance of the text, as it appeared to be the best possible agreement, given the constraints.

By comparing Monday's draft text (including the proposed G-77 amendments) with the results of Tuesday's closed-door all-night session, compromise appears to have been reached in the following areas:

In the "basis for action" section, paragraph 4 in the new text now states, "The cost of inaction could outweigh the financial costs of implementing Agenda 21. Inaction will narrow the choices of future generations." This modified version of the "precautionary principle" was a G-77 amendment.

The phrases "free trade" and "access to markets" remain.

Wording that deals with implementation of Agenda 21 includes the phrase "will require the provision to developing countries of substantial new and additional financial resources on grant or concessional terms and according to sound and equitable criteria."

The costs of Agenda 21 are clearly stated to be estimates.

Developing countries will begin to prepare national plans for sustainable development.

There will be no "pledging" conference however governments will report back to the 47th session of UN General Assembly with their plans and commitments.

Bracketed text remained in the following areas:

ODA FOR AGENDA 21: Paragraph 15 (in the "Means of Implementation" section) deals with ODA as a source of funding for developing countries for the implementation of Agenda 21. The problem is over the target and timetable for developed countries to meet the UN target of 0.7 percent of GNP for ODA. Yesterday's draft text called for developed countries to "reaffirm their commitments" to reach this target. However, brackets remain around text that stipulates the timetable of the year 2000. Of the various formulations in brackets, G-77 members have suggested that the formulation that states that developed countries "agree to continue their efforts to achieve this level [by the year 2000 or as soon as possible thereafter]" would probably be acceptable to the group. Of course, this sentence does not apply to the US since it has never "affirmed" a commitment and, thus, cannot "reaffirm" either a target or timetable. A separate sentence covers the US, which states that "other developed countries in line with their support for reform efforts in developing countries, agree to make their best efforts to increase their level of ODA."

IDA REPLENISHMENT LEVELS: Paragraph 16(a)(i) deals with the replenishment of the IDA, one of the various existing funding sources and mechanisms used in particular for the poorest of developing countries. The ninth funding replenishment (IDA-9) was set at US$15.5 billion. In order to adjust for expansion of the world economy and inflation, it has been estimated that IDA-10 would have to be increased by approximately US$2 billion (although some observers have noted that this figure might be readjusted depending on whether funding to China is maintained at current figures). There is discussion regarding a possible increase to the IDA over and above the correction in real terms that would increase it by US$ 5 billion, otherwise known as the "Earth Increment". Of this money, US$ 1.5 billion would come from the World Bank's interest income with US$ 3.5 expected to come from developed country donors. Brackets in the Chair's draft text, as of yesterday afternoon, contained two versions: one that mentions the "Earth Increment" to the tenth replenishment; and one that mentions the "Earth Increment" in addition to maintenance of IDA-10 at IDA-9 levels corrected in real terms.

THE GEF AND CONDITIONALITY: The remaining brackets in the Chair's text, as of late yesterday afternoon, were related to the changes in governance in the Global Environmental Facility (GEF). These four sub-paragraphs deal with 1) transparent, democratic and balanced governance; 2) ensuring new and additional financial resources on grant and concessional terms; 3) predictability of flows; and finally, 4) access to and disbursement of the funds under mutually agreed criteria [without imposing conditionality]. The final bracketed phrase, as insisted on by the developing countries, is, according to several participants, the key that, if resolved, may lead to the removal of brackets around the other three paragraphs in the section.: Amb. Ric�pero of Brazil has been charged by Tommy Koh with the responsibility of coordinating consultations at the ministerial level, in order to resolve all of these outstanding problems.

FOREST PRINCIPLES: Discussions on this document continued informally throughout the day yesterday. It was generally agreed by most observers that three paragraphs would have to be negotiated at the ministerial level: 1) paragraph (d) of the preamble that refers to the possible negotiation of a future legal instrument on forests; 2) paragraph 15 (b) that refers to the international trade in forest products [from sustainably managed forest resources], which is opposed by the Asian and African countries; and 3) paragraph 17 that [recognizes] or [takes into account] the role of forests as carbon sinks, which the G-77 would like to delete and the Arabs would like to retain.

ATMOSPHERE: The contact group on Atmosphere completed its work on Chapter 9 "Protection of the Atmosphere" on Wednesday afternoon. However, the whole chapter remains in brackets because of the Saudi Arabian's insistence that the section on energy be revised to meet their concerns regarding the overemphasis on new and renewable energy throughout the text. Other contentious issues pertain to the phrase "safe and environmentally sound energy systems". With regard to the "chapeau" to the chapter, Northern governments were concerned that the measures to be carried out in accordance with this chapter not only be cost effective but environmentally sound. As of last night, the Chair had prepared revised text that had taken into account Wednesday morning's discussions. This new text was transmitted to the Main Committee for negotiation last night.

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