United Nations
Commission on Sustainable Development

Background Paper

Commission on Sustainable Development       BackgroundPaper No. 9
Sixth Session
20 April - 1 May 1998

                Chapeau for Business and Industry
                        Background Papers

Business and industry plays a critical role in the global drive for sustainable development. In the
run up to and since the Rio Earth Summit, business's commitment to this goal has been apparent
through many innovative initiatives launched by individual companies and business groups.
Ground-breaking private-public sector partnerships have also contributed significantly to the

The launch of many positive voluntary programmes, such as the ICC Business Charter for
Sustainable Development and as described in the WBCSD's report "Signals of Change: Business
Progress Towards Sustainable Development," indicates the broad agreement of industry world-wide to integrate sustainable development considerations into nearly every aspect of their day to
day activities.

Business's constructive role in the United Nations Commission for Sustainable Development
(UNCSD) clearly demonstrates on-going commitment to this long-term process. Successful
technology co-operation, amongst the many varied contributions business is making to sustainable
development, is one process  which business can tailor to maximum effect in the pursuit of
balanced economic growth and development . During the 1998 session of the CSD, industry
wishes to underscore its on-going contribution to technology co-operation. Most importantly,
business has a key role to play in addressing poverty alleviation while stimulating more sustainable
consumption and production, all in the context of economic growth, environmental protection and
social development.

Industry's submissions to UNCSD 6 follows Agenda 21's approach in focusing on both the
internal operations of a company (corporate environmental management tools) and its external
relationships (responsible entrepreneurship). In addition, industry's role in technology co-operation and in freshwater issues are the third and fourth discussion themes in the Business and
Industry Background Papers summarized below.

Responsible Entrepeneurship (Background Paper No. 1)

Responsible, entrepreneurial businesses are the driving force for sustainable economic
development and provide the managerial, technical and financial resources to contribute to the
resolution of environmental challenges. Many challenges remain and industry must continue to
improve performance and keep stakeholders informed of its policies and practices. A particular
challenge will be bringing SMEs into the mainstream of good environmental management. 

More broadly, business and industry will continue to champion voluntary environmental initiatives
which encourage companies to go beyond regulatory compliance, in the spirit of responsible

Corporate Environmental Management Tools (Background Paper No. 5)

The development and use of corporate EMS (Environmental Management System) tools are the
mechanism to integrate sustainable development considerations into everyday business.
Furthermore, developing initiatives for public and private sector partnership show great promise
for the increased voluntary use of EMS and related corporate tools.  Such efforts will contribute
to a harmonization of environmental regulation and enforcement and will drive further
improvements in corporate policy and practice. 

Globally, the private sector is a primary source of employment creation, information, training,
and capacity building.  However, if the private sector is to make its full contribution to sustainable
development, an essential prerequisite is a sound policy framework, both at the national and
international level.

This will promote and encourage growth and development and maximize industry's ability to
employ the increasingly effective range of corporate environmental management tools to the
greatest benefit. To support these trends, the ICC and WBCSD recommend increased attention
to the development and integration of voluntary environmental management systems at all levels
of business.

Technology Co-operation (Background Paper No. 9)

Successful technology co-operation, tailored to the specific national or corporate case, is critical
to the implementation of sustainable development. . The concern that excessive government
regulation of technology co-operation could stifle innovation and limit access to needed technology
should be noted. Commercialization of R&D developments for new technologies to function as
part of normal business life as quickly as possible is important in order to achieve the common
goals. To this effect governments should enhance an effective business environment to catalyse
the process of commercialization. The private sector has an increasing role to play in delivery of
effective technology co-operation  which, clearly, involves the transfer of skills and knowledge
not just technological hardware. While it is apparent that the free market is the main driving force
for the efficient introduction and assimilation of technology, successful, long-term technology co-operation requires that all parties must gain from the co-operation, while,  at the same time, the
protection of patents and intellectual property rights of the developer is essential. The ICC and
WBCSD strongly recommend a concerted effort to ensure the  creation of an efficient framework
which promotes successful technology co-operation.

Industry and Freshwater (Background Paper No. 13)

The 21st Century will witness increasing competition for finite fresh water resources. 
Industry, which is not the main user of water, has financial, technical and management resources,
and is well positioned to contribute to the resolution of broader societal problems in this critical
area. It is apparent that all sectors need to co-operate if society is to avert or minimize adverse
effects associated with emerging fresh water shortages. 

The elements of a comprehensive water strategy are rather straight forward and apply to all
parties. Growing evidence demonstrates that industry has already begun to manage industrial water
use more effectively. One future task is to continue raising awareness within the business
community and encourage others , notably within the agricultural sector,  to take action now. The
issue of economic pricing of water, both in agriculture and domestic use, remains primarily a
government and public policy issue. Subsidies should be phased out since they encourage waste
and prevent better management of finite fresh water resources.  The 1992 Dublin Principle was
clear and correct :"Water has an economic value in all its competing uses and should be
recognized as an economic good."
Commission on Sustainable Development      Background Paper No. 9
Sixth Session
20 April - 1 May 1998

             International Chamber of Commerce (ICC)
    World Business Council for Sustainable Development (WBCSD)

"There can be no doubt that technology cooperation is important - contributing to all aspects of
sustainable development:  environmental social and economic .......... "

                        I.  INTRODUCTION

1. Technology cooperation is an important part of the strategy for sustainable development. 
Technology cooperation has been defined as "a process by which two or more parties identify
individual and common interests to share information, knowledge, know-how, and managerial
skills regarding the utilization of technologies that are more environment friendly, more energy
efficient, less resource intense, less polluting and oriented towards recycling in order to contribute
to the aim of sustainable development."

                             Box 1

Examples of technology cooperation include a partnership between General Electric of the
United States and Tungsrum Company, a formally state owned light bulb maker in
Hungary (51% of which is now owned by General Electric).  This partnership helped
improve the Hungarian company's environmental performance and brought its quality
standards in line with those of the United States and the European Union.  Similarly
Volkswagen of Germany, through its ownership of Skoda, the Czech car-maker, has
helped improve quality, reduce environmental impact, and save what was an ailing
business with outdated products.

2. Technology cooperation includes the machinery and equipment involved in the production
process.  Even  more important however is an understanding of the science and technology, the
transmission of skills, know-how and related organizational and institutional arrangements. 
Technological capacity building, the knowledge and skills that firms need in order to acquire,
assimilate, use, maintain, adapt, change and create technology, is an essential dimension of the

   This paper will emphasize the need for technology cooperation in general, the role of
business in technology cooperation and the required framework for successful technology
cooperation.  It will examine in greater detail the agriculture, chemical, non-ferous metal and oil


3. Modern technology usually uses fewer resources than older technology to achieve the same
end.  It is therefore both more cost effective than older technology and more friendly to the

4. However, the vast majority of technological research occurs in already developed nations. 
The research and development of new technologies is expensive, in fact often too expensive for
companies and governments in developing nations.  For similar reasons companies and
governments in developing nations often invest in technology that requires a smaller capital input
but which, in the long run, uses more resources and is less environmentally friendly.

                             Box 2

Technology Cooperation is not only a North-South affair.  There are growing examples
within the developing world and even between sectors of business within a single country. 
For example, the BCSD Colombia has been helping small companies involved in industries
such as the leather business, to cut pollution through ways that save money.

5. Environmentally friendly production is not a barrier but a pre-requisite for long term
economic growth. The consequences of environmental damage on future economic growth can be
considerable both in terms of a depletion of primary resources and quality of life.  It is therefore
in the long term economic interests of developing nations to find ways of preserving their
environment without hindering growth.  For similar reasons it is in the long term economic
interests of business and industry to ensure not more than the minimum environmental damage
compatible with development in the developing world. 

6. Modern technology, which uses fewer resources and is environmentally less damaging, is
an obvious way to minimize environmental damage in the developing world.  The dilemma with
such technology cooperation is how to make investing in modern technology worthwhile for
companies and governments in developing countries given the initial cost. 

                   III.  THE ROLE OF BUSINESS

7. Traditionally, industrial countries supported technology cooperation through government to
government aid finance.  Though this form of finance can and does continue to a certain extent,
today aid budgets are growing slowly or even declining, and cannot meet the needs of developing

Net Official Development Assistance fell by 14% in real terms between 1992 and 1995. 
Continuing efforts by industrialised countries to restrict their budget deficits restrict the scope for
real increases in aid.  In contrast, the flow of private capital is accelerating.  In 1992 the flow of
foreign direct investment into developing countries was $50 billion.  In 1993 $80 billion.  The
respective figures for 1995 and 1996 were $96 and $129 billion.  Technology cooperation is
principally a business to business transaction.  It is the private sector that can therefore provide
the main impetus for technology cooperation. 

8.  The private sector, however, needs an appropriate framework within which to operate. 
Consequently, the ICC and the WBCSD have assigned a high priority to encouraging such
frameworks and also partnership between governments, multilateral organizations and the business
community, to promote lasting and mutually beneficial technology cooperation.

                             Box 3

An example of such a partnership between government and business involves the Ministry
of Electric Power in China and the Tokyo Electric Power Company.  Since 1992 about 100
managers from the Ministry of Electric Power in China have participated in an exchange
programme with the Tokyo Electric Power Company, concentrating on proper and
effective operation and management, including environmental consciousness raising.

9.  Furthermore, the partners in the technology transaction need to jointly determine that the
technologies chosen are sound and adaptable to the specific needs of the business and country
concerned.  The governments primary role is to set enabling framework conditions.  The
mechanisms of the market will then ensure that the private sector selects the optimum technology. 

10. Within this context of technological cooperation based on mutual advantage, the practices
of multinational companies in the field of technology cooperation and environmental management
are particularly important, as experience shows that the international practices of large
multinationals spread to joint venture partners, suppliers, contractors, and governments in
developed and developing countries.


11. Technology cooperation, if it is to be successful, requires that all the cooperating parties gain
from the cooperation, and gain on an ongoing basis.  Financial incentives fuel technological
innovation.  Market forces are therefore the main driving force for the efficient technology

12. Technology cooperation therefore needs an efficient market system that preserves the
financial incentives necessary for technological innovation and investment in modern technology. 
In the developing world this means trade liberalization which frees companies with the
technological know-how to invest or cooperate with companies in the countries concerned.

13. The protection of patents and property rights of the developer is also essential to ensure that
funding is available for yet further technological developments.  A company will rarely share its
technological know-how if it loses control of that know-how as a direct result.

14. Governments should examine whether their existing legal and fiscal structures act as barriers
to discouraging technological cooperation and investment, and where this is the case they should
enact measures to replace them with enabling fiscal and other framework conditions.

15. Above all, modern technology requires a trained workforce.  Even the best, most
environmentally sound hardware can have a negative impact if misused or mismanaged, or if not
supported by the appropriate resources, institutions and infrastructure.  Technology cooperation
is therefore as much about the  transfer of skills as of hardware.  This capacity building cannot
be achieved without:

    (a)  developing a framework for the management of the environmentally friendly

    (b)  identifying possible strategies and priority actions of national, regional and international

    (c)  identifying concrete steps towards national capacity building including information
programmes for government officials and training of civil servants;

    (d)  adequately training the industrial personnel.

16. Further, integration with locally available technology and the involvement of local skills are
essential to reduce costs and to guarantee the continuity of technological cooperation.  The role
of governments in providing education and, in cooperation with the private sector, opportunities
for training is therefore vital.

                             Box 4

General Electric provides an examploe of the importance of skills as part of technology
cooperation.  In parallel with the transfer of technological hardware to developing
countries, General Electric has established many cooperative research and development
projects with local businesses and universities.  Electric powered vehicles, battery research,
oxygenated fuels and fuel cells are some of the programmes currently under way in
Chinese laboratories.  Technology is also being transferred to the Chinese automotive
industries via university technology institutes and government/industry-sponsored
technology seminars.

17. Though government has to aid in creating the conditions for technological cooperation each
technology transaction must be recognized as unique.  Government regulation of technology
cooperation or strict definition of environmentally sound technology could stifle innovation and
limit access to needed technology.

             A.  Study 1.  The agri-food industries

18. Agri-food businesses are key actors in ensuring that food is produced and distributed in a
safe, economic and sustainable way in response to consumer demand.  The agri-food chain
includes companies providing agricultural inputs and raw materials, individual and family farms,
co-operative organizations, food processing and transport businesses, small and medium sized
enterprises through to multi-national corporations.  Each has a role in achieving world food

19. The agri-food industry contributes to sustainable agricultural development by :

    (a)  assuming a continuing role in agricultural research and development;

    (b)  adopting a growing role in training, capacity-building and technology cooperation;

    (c)  investing to improve plant varieties and seeds, stimulate biotechnology, maintain plant
nutrition, crop  protection and animal health in an integrated approach to farm management;

    (d)  improving the quality and variety of food and agricultural products;

    (e)  aiming for closer cooperation and co-ordination among the various sectors of the agri-food chain.

20. Impact of new technologies on sustainable agricultural development:

         Case study:  plant breeding and biotechnology

The development of new higher yielding plant varieties is an important factor which has contributed to
sustainable agriculture and long term food security.  Sustaining and improving crop performance
requires continuous development of advanced technologies.  The transfer of such technologies is a
prerequisite for building sustainable and productive agriculture in developing regions.  ISAAA
activities (International Service for the Acquisition of Agri-biotech Applications), for example,
concentrate on building partnerships between the private and public sectors based on the donation of
technology as an instrument to build mutual trust and confidence. ISAAA is working with the main
agri-biotech companies in the world and has so far developed over a dozen projects in Africa, Asia and
South America.

Weeds are a major limiting factor in agriculture in both temperate and tropical countries.  To protect
their crops, farmers use various herbicides.  With  the use of biological and genetic technologies,
herbicide resistant varieties are being developed which facilitate more effective weeding and a
decrease in the use of herbicides.

Another application of biotechnology is the development of insect resistant crops through the insertion
of a gene from a bacterium that produces a protein toxic to specific insect pests.  Such new
technologies will deliver environmental benefits as the quantity of insecticides used will decrease.  This
in turn will reduce the use of raw materials and energy.  For example, in the USA, 4,000,000 pounds
of raw material, 1,500 barrels of oil and 150,000 gallons of fuel would be saved by the use of
transgenic potatoes resistant to Colorado beetle.

          Case study:  fertilizers and plant nutrition

Fertilizer production is subject to various economic and geographic factors, such as the
availability of suitable raw materials and minerals.  Fertilizer production capacity in many
developing countries is expanding in response to increasing domestic demand.  New
technologies have been developed and applied to minimize energy consumption and the
environmental impact of fertilizer manufacturing processes, together with more efficient
handling, transport and distribution systems.  For example, energy use in a new ammonia
plant, using natural gas as feedstock, is 35 GJ/t nitrogen, or half that of the processes
prevalent in the early 1960s.  Packaging, transport and application require a further 3 to 7
GJ/t N depending on the distance transported, etc.

Until the late 1970s, most industrially produced fertilizer was applied in developed
countries. Consumption has now stabilized in these regions but has risen dramatically in
developing countries.  This trend is likely to continue as population growth and increasing
urbanization causes an escalating demand for food.  Land degradation is often caused by
over-cultivation and progressive impoverishment through "soil nutrient mining" when
nutrients removed by the crops are not replaced. 

As the area of additional cultivable land is limited, careful plant nutrient management is an
essential component in ensuring sustainable and productive farming systems.  The
development of more efficient fertilizer products and application techniques is a high
priority for the fertilizer industry.  The optimization of crop nutrition through the
integration of mineral fertilizers with organic sources of plant nutrients will enhance soil
fertility, maximize nutrient recycling, improve water retention and reduce losses of
nutrients to groundwater and the atmosphere.

Training programmes for extension agents, fertilizer dealers and retailers, who are best
placed to give advice on fertilizer use to farmers, are coordinated by the fertilizer industry
in many countries and "best agricultural practices" are being developed and shared,
particularly in the techniques of Integrated Plant Nutrition (IPN).  For more than 30 years
the international fertilizer industry has also been a major contributor to many investment,
technology and extension programmes in developing countries, often in cooperation with
international agencies such as FAO and the World Bank.

                  Case study: crop protection

The Global Crop Protection Federation, GCPF, (formerly GIFAP) is the recognised world-wide representative of the crop protection industry.  It coordinates a network of regional
and national associations as well as companies.

The research activities of major crop protection companies focus on developing new crop
protection products and services.  Their objectives are to develop products with improved
properties in respect of, for example, user safety, with regard to the environment or
resource efficiency.

New technologies such as biotechnology are being developed together with international
agencies and the research community to support the concept of Integrated Pest
Management (IPM), promoting the strategic use of biological, chemical and mechanical
methods to suppress pathogens to below damaging levels.

During the last 6 years the crop protection industry has prioritized the concept of safe use
of its products, especially in developing countries through its Safe Use Projects.  Launched
as pilot projects in 1991, in Guatemala, Kenya and Thailand, these projects provide
training and education for all users of crop protection products.  Special attention has been
paid to farmer training. These projects have conveyed continuous improvements in the
production, handling, warehouse management, use and disposal of crop protection
products.  They are also successful examples of capacity building and technology and
experience transfer between industry and governments, academia, NGOs and other
international organizations.  Following successful implementation, these projects are now
being extended to neighbouring countries.

             B.  Study 2.  The chemical industries

21. The global chemical industry, represented by the International Council of Chemical
Associations (ICCA), contributes to the goal of sustainable development.  It aims to balance
environmental, social and economic interests, while fulfilling shareholder's expectations.

22. The global chemical industry will continue developing and implementing its Responsible
Care initiative worldwide.  The Responsible Care initiative aims to improve health, safety,
environmental performance and achiever higher standards of economic, environmental and social

23. Technology cooperation should therefore involve the highest degree of safety and
environmental protection reasonably achievable.  The global chemical industry aims for an
equivalent level of safety, health and environment protection in both countries and companies
supplying and receiving technology. Economies worldwide are influenced towards a sustainable
model by a number of factors.  These include: 

    (a)  the cooperation with and transfer to other countries or parties of efficient technologies,
together with high environmental, health and safety standards;

    (b)  comparable standards worldwide, applying to the industry's operations in other

    (c)  improving education and training and furthering the knowledge of staff and customers
by means of training courses.

24. Furthermore, ICCA members share information, knowledge, know-how and managerial
skills with business and governments in order to contribute to sustainable development worldwide.

                             Box 5

Upon the request from the Indonesian government, a member of the Japan Chemical
Industry Association (JCIA) sent its experts in 1995 and 1996 to the industrial park in the
suburb of Jakarta.  Its mission was to provide small and medium-size local food factories
with technical expertise for waste water treatment.  With this technical cooperation, they
significantly improved the operation of their activated sludge treatment facilities and
thereby the environmental performance.

                             Box 6

A member company of the Canadian Chemical Producer's Association (CCPA) is
developing a joint venture with a Chinese company to manufacture sodium chlorate and
sodium chlorite in China. This facilitates the development and use of chlorinedioxide
pollution prevention technology in the pulp and paper and water treatment chemical

                             Box 7

Central European countries face the difficult task of rebuilding their economies and
bringing their environmental performance and energy efficiency in line with EU standards. 
CEFIC has, therefore, initiated a programme, which assists these countries with advice
from CEFIC member companies through its Environmental Advisory Service for
Technology Transfer (Project EASTT).

The German Verband der Chemischen Industrie (VCI) adopted its own assistance
programme "Sustainable Development in Eastern Europe" to support this initiative. 
Working  with national chemical associations and, where appropriate, with government,
the VCI is providing:

Czech Republic:
Assistance in establishing a chemical transportation emergency response system, similar to
the VCI emergency system known by its acronym TUIS.  The system was finalized at the
beginning of 1997;  Assistance in establishing and implementing environmental
management systems according to ISO 14001;  Advice on energy efficiency improvement
to several companies.

Recommendations on the establishment of a system similar to TUIS;  Currently assisting
seven companies in the establishment of environmental management systems according to
ISO 14001.

Advice on energy efficiency;  Advice on the establishing of a recycling system for
industrial plastic packaging.

                             Box 8

The Latin American Group (LACPA) of the Global Crop Protection Federation (GCPF)
initiated Container Management Projects in 17 countries.  To continue these projects,
national task forces and a regional coordination committee have been established.  Their
activities include: 

-  a survey on the existing container management legislations to establish in which
countries immediate actions have to be taken,
-  national container inventories,
-  advice on a container management legislation,
-  national action plans,
-  concrete projects including the "Triple Rinse Campaign" and energy recovery through

          C.  Study 3.  The non-ferous metals industry

25. The International Council on Metals and the Environment (ICME) was established in 1991
to promote the development and implementation of sound environmental and health policies and
practices in the production, use recycling and disposal of metals.  ICME is an international
organization with member companies from six continents who together represent a major portion
of the world's production of non-ferous and precious metals.  These include companies from both
developing and developed countries who recognize that many environmental and health issues are
of global concern.  ICME provides a focal point for the non-ferous and precious metals and
mining industry to pool its expertise, exchange information and contribute to international
discussions on important environmental and health issues.

26. As a first major step in pursuing a clear and common direction on environmental matters,
members endorsed an ICME Environmental Charter against which progress can be viewed.  The
ICME Charter includes an introductory philosophical perspective within which there are principles
relating to environmental stewardship, product stewardship and members' responsibility to local
communities. Among these principles is explicit recognition of the need to promote the
international transfer of technologies that mitigate adverse environmental effects and to use
technologies and practices that take due account of local cultures and customs and economic and
environmental needs. Underpinning the Charter are other principles that cover ethical
considerations in communications.  ICME's quarterly newsletter regularly publishes examples of
environmental achievements on the part of individual member companies.  It is believed that the
Charter is an inspiration to other companies in the industry to give a high priority to good
environmental practices.

27. In support of the Charter and its legal mandate, ICME has held a number of conferences
and training workshops, both internal for member compainies and external for non-member
companies and government regulators.  Internally, ICME has held workshops to keep members
abreast of environmental developments and issues and their implications for corporate practices
and policies.  For example, workshops were held on comparative corporate environmental
systems, managing metal toxicities, economic and market instruments for minimizing
environmental damage, among others.  The transfer of know how through conferences like these
is an essential part of technology cooperation.

28. External events have included the following:

    (a)  Seminar on Environmental Management held in Almaty, Kazakhstan (August 1994)
under the joint sponsorship ot the Kazakh Ministry of Ecology and BioResources and the ICME. 
It was attended by 100 Kazakh representatives of government, NGOs, industry and academia. 
ICME members covered enviromental management practices from exploration through to
operations, waste treatment and closure as well as technologies that were available.  Other
presenters were from the UNEP, the Kazakh government and industry associations from the
United States, Europe and Peru - these speaking about regulatory approaches in their regions.  The
seminar was held at the request of the government of Kazakhstan which was seeking solutions for
the environmental problems associated with their mining and metals sector.

    (b)  International Conference on Development, Environment and Mining held in
Washington, D.C. (June 1994) was co-sponsored by the World Bank, UNEP, UNCTAD and
ICME.  It brought together 300 senior policy and regulatory representatives from more than 50
countries, more than half of which were from developing countries. 

    (c)  International Workshop on Managing the Risks of Tailings Disposal co-sponsored by
ICME and UNEP with the suppport of the Swedish International Development Agency (Sida). 
The workshop was attended by regulatory officials and mine practitioners from 27 countries,
among which were 15 developing countries.  Its purpose was to seek solutions to tailing
management problems, notably during construction and management of tailings dams.  A number
of recommendations were made, many of which are being pursued in 1998.

29. ICME also operates an extensive publications programme which provides a means for
diseminating information on subjects related to the health and environmental effects of mining and
production of non-ferrous metals.  One such publicaton entitled ICME-UNEP Case Studies
Illustrating Environmental Practices in Mining and Metallurgical Processes compiles examples of
environmetnal management systems, project approval procedures, good operations and techniques,
training and education.  At the end of each case study, individual contact details are provided for
those seeking further information.  This document was sent to UNEP regional and representative
offices in developing countries around the world for distribution.  There are also a number of
other ICME publications on environmental issues of current concern to many governments,
international agencies and industry.  They are written by well known experts.  Example
publications include topics on endocrine disruptors, the use of cost-benefit analysis in chemicals
management, risk assessment techniques, hazard identification in the aquatic and terrestrial
environments, among many others.  These publications are in constant demand as they provide
useful technical information for policy and regulatory decision makers.  Moreover, ICME's
quarterly newsletter is sent free of charge to some 3000 individuals in developing countries.

30. ICME member companies operate mines and plants around the world, many in developing
countries. Employee  training programmes form an integral part of operations.  In addition, many
ICME member companies who operate mines in remote communities provide scholarships and
skill-training programmes to local residents.  Some have established foundations so that when the
mine closes, the community will have opportunities for continuing employment through local
business activities assisted by the foundation. Recently, some companies have jointly funded a
major training centre in Chile for students to study topics related to mineral resource management.

                D.  Study 4.  The oil industries

31. For more than 100 years the oil and gas industry has worked with the peoples and
institutions of nations around the world to discover, develop, process and market oil and gas
resources.  Over the years partnerships have progressively developed to encompass the full range
of activities now referred to as technology cooperation and capacity building. 

32. Today the process involves much more than a one-way transfer of technology from
devloped countries to developing ones.  Partnerships have evolved that are today increasingly
contributing towards sustainable development.  These may involve cooperative agreements for
exploration and production of oil and gas and for their processing, distribution and sale in the
market place. The most important partnerships have been significant contributors to many nations'
efforts to develop their natural resources, improve their communication, transport and health
services and create advanced national educational institutions, from which has sprung a skilled
work force, supporting industries and local entrepreneurial activity.

33. Technology cooperation and capacity building cannot occur without trust, long-term
commitment and mutual benefits for all partners.  The likelihood of maximum benefit to all
partners will be greatly facilitated if a number of conditions are met.  These include:

    (a)  a stable economic system and an attractive investment opportunity for investing
    (b)  transparent and equitable legal and financial structure and sound environmental laws;
    (c)  realistic expectations from the host country and the communities of the benefits that
may result from the partnership;
    (d)  a long-term commitment and dedication of resources (by all partners);
    (e)  a fair distribution of benefits as a goal (for all partners);
    (f)  industry respect for local culture and values;
    (g)  a safe and secure working environment (for all employees and contractors); and
    (h)  no unnecessary barriers to movement of personnel and materials.

34. The oil industry has learnt many lessons, reflecting a long history of varying degrees of
success, challenges addressed and problems solved.  The oil and gas industry's experiences have
contributed to a better understanding of the requirements for successful technology cooperation
and capacity building, which should include:  provision for education and training, respect of the
needs of host countries and communities, protection of the environment, and building relationship
with stakeholders.  The realization of mutual benefit is one of the most important keys to success
in technology cooperation and capacity building.

35. The overriding benefit resulting from successful ventures is the achievement of a
sustainable balance between environmental protection and economic and social development. 
Examples of successful technology cooperation in the oil sector include:

Amoco in Western Siberia - Cooperation between US and Russian enterprises is helping
identify means of revegetating areas of Siberia.  This effort is part of a broader programme
to repair damage that occurred during past Soviet era development of oil and gas resources.

BP in Colombia - A scheme to monitor tropical river systems, and assess the impacts of oil
and gas exploration on them, has led simultaneously to scientific innovation and to local
capacity building.

Canadian Occidental in Yemen Republic - A partnership approach to developing oil
resources in Yemen Republic has improved schools, water and energy supplies,
environmental protection and health care in a number of village communities, and provided
training for Yemen's nationals.

Chevron in Papua New Guinea - Papua New Guinea's oil production is accompanied by
innovative plans to protect the environment, improve the well-being of affected people and
build up businesses that will thrive after the oil has run out.

Elf Aquitaine in French-speaking countries - A teaching document for 14 to 16 year-olds is
providing environmental education throughout the French-speaking world, and is also
being used elsewhere as an environmentally-informative means of teaching the French

Esso in Malaysia - Development of the petroleum industry in Malaysia is playing an
important role in the nation's drive to become an industrialized nation and meet its "Vision
2020".  The industry is working with the government at all levels to help assure that the
environmental and economic benefits are fully realized by Malaysians, their communities
and the nation.

Imperial Oil in Northern Canada - Aboriginal populations in Canada's remote northern
areas, just south of the Arctic Circle, are benefiting from careful planning during the
expansion of oil production in the region - top priorities are training, the creation of new
businesses and the preservation of traditional lifestyles.

Mobil in Indonesia - Development of the Arun natural gas field in Indonesia has involved
training, conservation capacity building and technical cooperation.

PT Caltex Pacific Indonesia - Those responsible for developing Indonesia's oil and gas
resources are playing important roles in developing human resources, protecting the
environment and extending the life of finite resources.

Shell in Malaysia - Sophisticated technology is being used in Malaysia to convert natural gas into
an exportable liquid fuel, bringing large revenues and new skills to a country that is fast becoming

Total in Senegal - The consumption of fuelwood is leading to deforestation and desertification in
Senegal.  But the introduction of butane as a household fuel promises to help turn the tide.

36. The initiatives these examples describe all contribute to sustainable development by
improving the national economies and surrounding communities' quality of life, while also
contributing to the long-term business success of the companies involved.  They show how
improved environmental monitoring and protection, training and education, small business and
infrastructure development, better access to basic necessities such as health care and clean water,
as well as the creation of major industries, have made this possible. Since the oil industry is highly
technology and capital intensive, some case studies include examples of the deployment of
sophisticated core technologies, which address key challenges facing the oil industry and society.

                        V.  CONCLUSIONS

37. One of the major lessons to emerge from the study of technology cooperation is that almost
every attempt at generalization identifies different and original ways, very much country-specific,
of carrying out technology cooperation.  Nevertheless several conclusions can accurately be

    (a)  There can be no doubt that technology cooperation is important - contributing to all
aspects of sustainable development: environmental social and economic.

    (b)  The private sector has an increasing role to play in technology cooperation.

    (c)  Technology cooperation must require all cooperating parties to gain from the

    (d)  Market forces are the main driving force for the efficient introduction and assimilation
of technology.

    (e)  The protection of patents and property rights of the developer is essential.

    (f)  Excessive government regulation of technology cooperation could stifle innovation and
limit access to needed technology.

    (g)  Above all, technology cooperation involves cooperation in the transfer of skills and
knowledge, not just technological hardware.

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Date last posted: 8 December 1999 15:15:30
Comments and suggestions: DESA/DSD