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FINANCING FOR SECTORAL AND CROSS-SECTORAL ISSUES OF AGENDA 21

The PHILIPPINES, on behalf of the G-77 and China, focused on three points: capacity building, financing of technology transfer and joint ventures. With regard to capacity building, many developing countries need to enhance their capacity and their capability to implement and develop environmentally sound technologies. If ODA is to be truly cost-effective, donors should enhance the capacity and capability of the recipients. The more cost-effective the funds, the greater the confidence of the constituents of the donor countries. With regard to financing of technology transfer, it is important that governments, NGOs, IFIs, and regional and subregional development banks cooperate and implement technology transfer on concessional and preferential terms. Governments or others should purchase patents from the owners and give them to developing countries or sell them on concessional terms. Governments may be able to develop a scheme for tax incentives for companies and individuals who transfer environmentally sound technologies to developing countries. Developing countries need the financial and technological support of developed countries for joint ventures. Japan has helped a lot in this field by sponsoring a Japan-ASEAN Fund for commercial and productive ventures.

The REPUBLIC OF KOREA said that technology transfer will need to address information, training, education and, in particular, capacity building. He noted that in most developing countries, the private sector and technology ownerships are closely linked. In their studies of financing technology transfer, the CSD should focus on how to combine public sector ownership roles with that of the private sector. He hoped that the action plans recommended by the Seoul Workshop will provide valuable insight into the provision of environmentally sound technologies.

The WORLD CITIZENS GROUP stated three reasons why governments are hesitant to move forward on the proposals. First, there is fear that sovereignty will be lost. The second problem is based on the fact that governments plan incrementally, which necessitates finding means to implement Agenda 21 that is derived from successful pilot projects. And third, the lack of resources requires governments to ensure that available resources are disbursed prudently. Existing bodies should be utilized to generate and monitor resources.

The representative from the SOCIETY FOR CONSERVATION AND PROTECTION OF THE ENVIRONMENT said the NGO community wonders why global military expenditure has not been discussed. If only 25% of military expenditures is diverted to funding sustainable development, there will be enough to feed the poor and provide health, education and jobs for billions.

POLAND noted the importance of converting official and foreign debt for the transfer of technology. The money could be limited to projects improving the environment or serving development. Financial support covers only a small part of the costs of technology, mainly the cost of licenses, but local investors should provide the rest from their own financial resources. Debt-for-nature swaps should be considered a useful mechanism for the transfer of the best technologies from market economies to countries with economies in transition.

INDIA explained two aspects related to the subject: the importance of information on technology and the effects of environmental standards and economic instruments. He noted that information on technology is an important public good that differs from other goods and services. The markets for technology are inherently dynamic, and such information is important for the public. He noted that the proposed rights data bank could be financed and developed in the various developed countries and made available to the South. He explained that industries in the South are generally small, while new and evolving technologies in the North are for large- to medium-sized industries. This presents three problems: the developing countries lack the know-how to utilize the newer technologies; the packaging of technology is not suited to small industries in the South; and it is necessary to have funds for capacity building if new and efficient technologies are to be adopted. Regarding environmental standards and economic instruments, imposing uniform tax regulations poses problems since it would put small industries out of business.

CHINA found the Secretary-General's report unbalanced and weak on financing the transfer of environmentally-sound technology. The developing countries believe that implementation of paragraph 34.18 of Agenda 21 can enable developed countries to play a useful role in protecting, purchasing and transferring technologies to developing countries. Firms could get tax exemptions if they transfer technologies to developing countries.

MALAYSIA said that creating demand for environmentally sustainable technologies through the consistent development of policies that favor their use, such as tax incentives, is essential, and urged that action be taken to increase awareness of financial markets and advantages of environmentally sound technologies. He noted that regional development banks are best placed to encourage financial market reforms to support such transfers. He highlighted the mechanisms that could be utilized to finance technology transfer, and suggested that the CSD undertake further studies on venture capital funds, leasing for environmentally sound technologies, built and orbit transfers (BOTs) and technology guarantees. IFIs should devote more resources to financing environmentally sound technologies. With respect to biotechnology, he suggested the establishment of mechanisms that could enhance industrial development and ensure biosafety concerns are taken into account: establishing an International Capital Fund for Biotechnology; establishing an International Biosafety Trust Fund; using venture capital funds for technology transfer; and increasing ODA for biotechnology transfer.

GERMANY stressed the importance of the subject under consideration and added that there is a need to concentrate more on the different sectors. For example, this year's discussion of forest resources provides additional opportunities to discuss raising financial resources. There is a need for more practical examples from different countries.

COLOMBIA expressed concern over the nature of the proposals in the Secretary-General's report on establishing "new" approaches for the transfer of technology. He added that it is not clear in this discussion what sort of proposals can arise for the financing of the different sectors of Agenda 21. The CSD should also consider intellectual property rights and foreign direct investment. The CSD should evaluate how the GEF is addressing Agenda 21.

The UK stated that the domestic policy framework of the recipient country is the most important factor in determining technology transfer, while the most important disincentive to a developing country is the concern by the inventor that the intellectual property rights will not be observed. Favorable incentives also create an enabling environment for the development of local technologies. He noted that progress will be made when intellectual property rights and foreign property rights are resolved on a non-discriminatory basis by the WTO.

The IMF drew attention to two issues that must be considered in respect to the Philippines' proposal: (1) tax officials and lawyers would be responsible for the mechanisms that are put in place, yet they have no idea what environmentally sound technologies are, thus implementing the transfer requirements would result in administrative and legal problems; and (2) a proposal to provide tax exemption runs contrary to the tax reforms currently being put in place in many countries, which aim at broadening tax bases and lowering taxes. The proposal has hidden and implicit subsidies that run counter to sustainable development.

BRAZIL noted that when we insist on something innovative or creative, it often means something important is failing. We cannot think that the Spirit of Rio is vanishing. In Agenda 21 we can find everything we need from traditional to innovative ideas on finance and technology transfer.

The US said that the FAO meeting on plant genetic resources in June will examine safeguarding the rights of farmers. The CSD should not discuss farmers rights or intellectual property rights until the FAO's negotiations are complete. Many environmentally sound technologies are already publicly available, privatization is a useful option to explore, and commercial arrangements will be an effective vehicle in the transfer and use of environmentally sound technologies. In response to Malaysia's comment on the Biosafety Trust Fund, the US views this as a solution that does not really identify the problem.

The PHILIPPINES, on behalf of the G-77 and China, highlighted some traditional impressions: intellectual property rights often suggest Northern concerns, but what about protecting the intellectual property rights of local and indigenous knowledge and innovations of the Southern people; legally-binding forest principles are perceived within the context of tropical forests and not that of the temperate and boreal forests; and partnerships are determined by issue. There should be mutual respect at all times and attempts to assist those in need. He noted that financing sectoral elements, such as the existing Conventions borne of the Rio process, has also not fared well.

MALAYSIA noted that Wednesday was International Women's Day and said that if women had the power we would not be enacting the same sterile debate here. We would have action, we would have transferred the relevant technologies and we would not have to sit here year after year and repeat the same refrain. In response to the points raised by the US on farmers' rights, she found it difficult to refrain from discussing these issues in other fora apart from the FAO. Biosafety should not be a constraint to getting technologies, but developing countries should not be subjected to unnecessary risks. On the question of forests, she reminded Germany that Panayotou's incentives and disincentives should apply to all forests, not just forests in developing countries.

CHINA noted that material resources are only one of the incentives necessary for the transfer of technology; spiritual, moral and intellectual resources are also essential. He noted that contributions by developed countries, such as Norway and others, to transfer property rights and technology to developing countries was recognized, but it is essential to look at how these transfers are functioning, and what they will attain in the future.

The REPUBLIC OF KOREA noted that while foreign direct investment is increasing, it cannot solve everything and the conditions for transfer of environmentally sound technologies (ESTs) are not always there. The databank system is essential for the capability of developing countries in EST transfer. Economic instruments in the form of tax exemptions are needed. Tax exemptions may have administrative difficulties, but there is a need to encourage companies to transfer ESTs to developing countries.

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