Report of the Commission on Sustainable Development on the Sixth Session
(22 December 1997 and 20 April 1 May 1998)

Decision 6/2. Industry and sustainable development

1. The Commission on Sustainable Development reaffirmed that in order to achieve sustainable development, Governments, in cooperation with non-State actors, need to undertake greater efforts to integrate economic, social and environmental goals into industrial policy and decision-making. Towards this end, Governments need to expand and intensify cooperation with industry, trade unions and other groups of civil society. The Commission took note of the Chairman's summary of the industry segment of its sixth session. The following recommendations of the Commission are based on the report of the Secretary-General on industry and sustainable development 15/ and the report of the Inter-sessional Ad Hoc Working Group on Industry and Sustainable Development (see annex).

A. Industry and economic development

2. The Commission recognized that industrial policy and responsible entrepreneurship are vital to sustainable development strategies and should encompass a variety of interrelated economic, social and environmental objectives, such as the encouragement of an open, competitive economy, the creation of productive employment and the protection of the environment.

3. The Commission emphasized that in order to achieve the objectives of sustainable development, Governments need to integrate economic, social and environmental concerns in their policy-making and to promote economic growth and international competitiveness of industry through macroeconomic policies. The Commission agreed that, in order to stimulate domestic private enterprise, boost economy-wide competitiveness and attract foreign direct investment, policy reforms should aim at creating an enabling policy environment, inter alia, through improvements in infrastructure and education, encouragement of research and development, facilitation of exports and liberalization of domestic markets. In this regard, the development of small and medium-sized enterprises should receive special attention.

4. The Commission stressed that for developing countries and economies in transition, foreign direct investment is often an important source of capital, new technologies, organization and management methods, and access to markets. The Commission also stressed that to promote foreign direct investment flows to developing countries, in particular to the least developed among them, greater emphasis should be placed by the United Nations system on promotional and information-dissemination activities relating to investment opportunities in the developing countries. In this respect, the programme of the United Nations Industrial Development Organization on investment promotion has proved to be an effective instrument for facilitating investment in developing countries and therefore should be strengthened.

5. The Commission emphasized that official development assistance remains a main source of external funding, particularly for countries in Africa and the least developed countries, and plays a significant role, inter alia, in capacity-building, infrastructure, poverty eradication and environmental protection in developing countries, and a crucial role in the least developed countries.

6. The Commission recognized that industry plays a critical role in technological innovations and research and development activities, which are crucial for the economic and social development of any country, as well as in the development, diffusion and transfer of environmentally sound technologies and management techniques, which constitute a key element of sustainable development.

7. The Commission emphasized that it was important for the achievement of sustainable development for Governments to develop and maintain an enabling policy framework based on a sound regulatory foundation complemented with a judicious mix of economic instruments, voluntary initiatives and agreements and public-private partnerships.

B. Industry and social development

8. The Commission recognized that there is a mutually reinforcing relationship between social and industrial development, and that industrialization has the potential to promote, directly and indirectly, a variety of social objectives such as employment creation, poverty eradication, gender equality, labour standards, and greater access to education and health care. In this regard, the overriding policy challenge is to promote the positive impacts while limiting or eliminating the negative impacts of industrial activities on social development. The Commission noted that improved access to education and health care has, in general, been associated with the pace of industrialization and recommended that Governments continue to give them priority.

9. The Commission recognized that industry contributes to social development objectives through, inter alia, the creation of productive employment, compliance with labour standards, corporate social initiatives and attention to human resources development and worker welfare. Industry continues to face such challenges, which can be addressed through better dialogue with trade unions and Governments.

10. The Commission acknowledged that, in dealing with the problems of industrialization, social policy has not always been gender neutral. In view of persistent gender disparities in areas such as income, employment, education and health, Governments, industry, trade unions, women's organizations and other organizations of civil society should work together towards the elimination of discrimination against women.

11. The Commission emphasized that among the central concerns of the international community should be the growing international income disparities among and within countries and the risk that some countries and groups might fall deeper into poverty and exclusion. The World Summit for Social Development provided a strong basis for international cooperation, including with the business community. In this regard, policies should build on the Copenhagen Declaration on Social Development. 16/

C. Industry and environmental protection

12. The Commission noted that, as the world has become more industrialized, there have been increasing environmental pressures such as harmful emissions and waste, which have had global, regional or local impacts. These include, at the local level, urban air pollution, contamination of soils and rivers and land degradation; regionally, acid rain and water and coastal zone contamination; and globally, climate change, ozone layer depletion, loss of biodiversity, increased movement of hazardous waste and increased land-based marine pollution.

13. The Commission acknowledged that environmental sustainability and industrial development are mutually supportive, given appropriate technology, institutions, policies and systems of incentives.

14. The Commission stressed that the overriding task facing Governments is to maximize the positive influence of industrial activities on economic and social development, while minimizing the negative impact of production and consumption on the environment. To this end, Governments should review their regulatory policies and systems of economic incentives and disincentives and undertake other actions such as capacity-building, environmental data collection and enforcement that support the environmental protection efforts of industry and civil society. Governments should encourage the wider dispersion and implementation of industry's voluntary initiatives and agreements and sharing of best practices.

15. The Commission called upon industry to increase its efforts, as appropriate, in the areas of responsible entrepreneurship and employment of various corporate management tools, including environmental management systems and environmental reporting, to improve its environmental performance. Governments and industry must work together to develop policies to ensure that conformance with standards is not too costly or difficult to achieve for companies in developing countries and for small and medium-sized enterprises.

16. The Commission recognized that eco-efficiency, cost internalization and product policies are also important tools for making consumption and production patterns more sustainable. In this regard, attention should be given to studies that propose to improve the efficiency of resource use, including consideration of a tenfold improvement in resource productivity in industrialized countries in the long term and a possible factor of four increase in industrialized countries in the next two or three decades. United Nations Environment Programme/United Nations Industrial Development Organization Cleaner Production Centres have demonstrated the compatibility between environmental protection and increased resource productivity, and the lessons learned in these activities should be implemented as broadly as possible.

D. Future work

17. The Commission recognized the value of the interactive dialogue between representatives of Governments, industry, trade unions, non-governmental organizations and international organizations in the industry segment of its sixth session, which focused on four themes: responsible entrepreneurship, corporate management tools, technology cooperation and assessment, and industry and freshwater. Similar dialogues should be held in the future, taking into account that their preparation must take place in the intergovernmental process and with balanced representation of all major groups from developed and developing countries.

18. The Commission noted the potential value of a review of voluntary initiatives and agreements to give content and direction to the dialogue between Governments and the representatives of industry, trade unions, non-governmental organizations and international organizations. As a first step, representatives of industry, trade unions and non-governmental organizations should examine voluntary initiatives and agreements to identify those elements that can be considered for this review. The Department of Economic and Social Affairs of the United Nations Secretariat could provide assistance in this process. Special attention should be given to the balanced involvement in the process of representatives from all major groups from developed and developing countries. The Secretariat should make the results of this review available to Governments. The Commission invited the Department, in cooperation with the United Nations Environment Agency and the United Nations Industrial Development Organization to examine how voluntary initiatives and agreements could contribute to the future work of the Commission and to report on the result of this work to the Commission at its seventh session.

19. The United Nations Environment Programme is currently undertaking work on the voluntary commitments and initiatives taken by the financial sector that promote sustainable development. The work of the financial sector should be further developed. The Commission underlined the importance of such voluntary commitments and initiatives and invited the United Nations Environment Programme to report on its work in this area.

Annex

Report of the Inter-sessional Ad Hoc Working Group on Industry and Sustainable Development

I. Introduction

1. The Inter-sessional Ad Hoc Working Group on Industry and Sustainable Development met in New York from 2 to 6 March 1998 in preparation for consideration of the issue of industry and sustainable development by the Commission on Sustainable Development at its sixth session (New York, 20 April 1 May 1998). Its discussions were based on the recommendations and proposals for action contained in the relevant reports of the Secretary-General. 15/

2. The outcome of the Working Group meeting is not a negotiated text, although its contents were thoroughly discussed. In accordance with the expert nature of the Working Group and the functions assigned to it, the present report focuses on key issues and conclusions and suggests elements and policy options for further consideration and negotiation during the sixth session of the Commission on Sustainable Development.

 II. Industry and sustainable development

 A. Background

3. Agenda 21 17/ and the Rio Declaration on Environment and Development 18/ provide the fundamental framework for further policy discussion and action on matters related to industry and sustainable development. Although the role of business and industry, as a major group, is specifically addressed in chapter 30, issues related to industry and economic development, consumption and production patterns, social development and environmental protection cut across the entirety of Agenda 21, including its section 4, Means of implementation.

4. Poverty eradication is central to sustainable development strategies, and industry has a key role to play in this respect. Sustainable industrial policy encompasses a variety of interrelated economic, social and environmental objectives, including the encouragement of an open, competitive economy, the creation of productive employment in order to provide sustained increases in household income and social development, and the protection of the natural environment through the efficient use of resources. In order to achieve the objectives of sustainable development, Governments need to integrate economic, social and environmental concerns into their policy and regulatory frameworks, and industry needs to promote sustainable development through sustainable consumption and production and responsible entrepreneurship, in accordance with country-specific conditions.

5. Increasing industrialization and per capita levels of production have led to a corresponding increase in the impact of industrial activities on the environment and health. At the local level, industrial emissions contribute to urban air pollution and the contamination of soil and water. At the regional level, the impact of such emissions includes acid rain, water contamination and the contamination of coastal zones. The major impact at the global level includes climate change, depletion of the ozone layer and the loss of biological diversity. These environmental challenges will be more and more shaped by growing resource and energy demands, and the issues (like climate change) cannot be dealt with by end-of-pipe regulation alone. Hence, the promotion of cleaner production and improvements in environmental performance and environmentally sound technologies and products are becoming increasingly important. Some businesses and industries have taken significant first steps to develop, implement and improve their policies and practices to promote sustainable development. The implementation of environmental management systems and practices in industry are, therefore, important. The way in which companies are able to respond efficiently and effectively to these challenges is seen as a cornerstone in the necessary innovation process.

B. General recommendations

6. Further action is needed to adjust policy approaches that have unintended adverse environmental or social effects and to establish a policy framework that fosters sustainability, including encouragement to companies of all sizes and in all sectors to integrate sustainable development into their business strategies, planning and operations. At the macroeconomic level environmental protection and "eco-management" can contribute to the modernization of the economy and to creating and securing jobs in industry.

7. Governments are encouraged to develop enabling policy environments and undertake reforms that provide more consistent economic and other incentives and disincentives to make markets work better and encourage business and industry to move faster towards sustainable development. Some policy instruments used in developed countries might be useful for the more advanced developing countries. For others at the early stages of industrialization, there are opportunities to integrate sustainability from the outset. For developing countries, particularly the least developed countries, further efforts, supported by international cooperation, will need to be made in order to encourage capacity-building and investment in sustainable industrial development.

8. Since the role of the private sector has expanded in most economies, effective sustainable development policies require constructive dialogue and partnerships between Government at all levels, industry, trade unions and civil society, including women's organizations. There is a need to build and extend this dialogue. There are many good examples of the new partnerships that are required. They include partnerships between Government and industry to tackle global challenges like climate change, partnerships between companies in developed and developing countries to create and spread cleaner technologies and improved environmental management, partnerships at national and local levels between companies and all of their stakeholders, and increased dialogue between industry and the United Nations system.

9. Consistent with Agenda 21, the development and further elaboration of national policies and strategies and integrated approaches, particularly in industrialized countries, are needed to encourage changes in unsustainable consumption and production patterns, while strengthening, as appropriate, international approaches and policies that promote sustainable consumption patterns on the basis of the principle of common but differentiated responsibilities, applying the "polluter pays" principle and encouraging producer responsibility and greater consumer awareness.

10. Governments, industry and organizations of civil society should, as appropriate, use the media, advertising, marketing and other means to promote greater producer and consumer awareness of sustainable development in order to encourage a shift to more sustainable consumption and production patterns. Industrialized countries should take the lead in this process.

11. Sustainable development should be encouraged with continuous innovation and the adoption of environmentally sound technologies to change current production and consumption patterns. The challenge is to implement measures that will have a significant long-term impact on preventing and mitigating pollution and resource consumption alongside continued growth in gross domestic product. Eco-efficiency, cost internalization and policies for products and services are important tools for making consumption and production patterns more sustainable.

12.    Foreign investment can play a significant and positive role in achieving sustainable development -- for example, through the diffusion of environmentally sound technologies, including environmental management techniques and tools, and in capacity-building and poverty alleviation through employment generation. It can, however, contribute to environmental problems when undertaken with inadequate regard to environmental, economic and social consequences. Consideration should be given to an assessment of the implications for sustainable development of foreign investment.

13.    Business and industry should be encouraged to develop and implement voluntary guidelines and codes of conduct which can help to promote and disseminate best practices in environmentally and socially responsible entrepreneurship, and to develop further those that already exist. To be effective, business and industry need to develop and implement such codes by themselves, for that will ensure their commitment to the process. Equally important, their credibility with stakeholders requires that the codes stimulate positive action that goes well beyond "business as usual". Therefore, an essential element is transparency in monitoring and public reporting of progress.

14.    Governments at all levels, industry, trade unions and other organizations of civil society, in particular women's organizations, should work together towards the elimination of discrimination against women in employment, education, property ownership and access to credit and to ensure that women have effective equal access to economic opportunities and social participation. Governments should ensure that their social and industrial policies are gender-sensitive.

15.    Particular efforts are needed to promote small and medium-sized enterprises and entrepreneurial potential, in, inter alia, the informal sector in developing countries. Sustainable development requirements need to be translated into concrete action for small and medium-sized enterprises. Governments, with the support of the international community, as appropriate, can develop policy frameworks to support investment, including the provision of micro-credit, and access to technology know-how and training. Large companies and transnational corporations can provide support by working through the supply chain, including local suppliers.

16.    Training should be utilized by all sectors and societies to promote cleaner production. The training should stress the integration of economic, social and environmental matters as Government, industry and civil society implement the policies and programmes.

C. Recommendations for Governments

17.    Within a supportive international environment, Governments should create an enabling policy environment in order to encourage domestic private enterprise and economy-wide competitiveness through improvements in infrastructure and educational, financial and legal institutions; encourage research and development; and facilitate exports and the liberalization of domestic markets. These reforms can encourage investment, innovation, diffusion of technology and more efficient use of resources.

18.    Governments should continue to promote the integration of environmental and industrial policies, with emphasis on the preventive approach. Governments need to adopt policies and regulations that set clear environmental goals and objectives for industry through strategic environmental policies at the national and subnational levels. They also need to develop and promote appropriate policy frameworks to help mobilize the full range of domestic and foreign resources from all sectors, including industry, in support of sustainable development.

19.    Since not all developing countries can attract adequate levels of foreign direct investment for their industrial development, official development assistance remains a main source of external funding for them, particularly in Africa and in the least developed countries. Official development assistance plays a significant role, inter alia, in capacity-building, infrastructure, poverty alleviation and environmental protection in developing countries, and a crucial role in the least developed countries.

20.    Development strategies should encompass official development assistance and should include the effective use of all possible means of promoting sustainable development and the facilitation of private investment, trade, technology transfer, and utilization of science and technology, tailored to the specific conditions and needs of each country. It is urgent that measures be taken to foster and improve capacity-building over the long term.

21.    While not replacing official development assistance, foreign direct investment offers developing countries and economies in transition access to additional capital, new technologies, organization and management methods, and markets, as well as opportunities to exploit complementarities between domestic and foreign investment. A stable policy environment is necessary to attract foreign direct investment and to ensure confidence among domestic entrepreneurs and foreign investors. Ways and means of encouraging foreign direct investment flows between developing countries should be explored.

22.    Governments in developed countries should encourage foreign direct investment to assist developing countries and economies in transition in their development in a way friendly to the environment and supportive of sustainable development. The commitment of foreign investors to sustainable development is required while they pursue their commercial interests.

23.    To ensure that such investments are supportive of sustainable development objectives, it is essential that the national Governments of recipient countries provide appropriate regulatory frameworks and incentives for private investment, including those that promote the availability of micro-credit. Therefore, further work should be undertaken on the design of appropriate policies and measures aimed at promoting long-term investment flows to developing countries for activities that increase their productive capability and at reducing the volatility of those flows.

24.    When devising and implementing environmental regulatory frameworks, Governments should seek to ensure that such frameworks encourage, as appropriate, private sector activities that promote sustainable development. The traditional method of command and control, based on effluent and emission standards, should be developed or modified, as appropriate, with ample participation of industry and civil society, to become an enabling factor and the basis for a judicious mix of economic instruments, voluntary industry initiatives and public and private partnerships.

25.    There is a need for making existing subsidies more transparent in order to increase public awareness of their actual economic, social and environmental impacts, and for reforming or, where appropriate, removing them. Further national and international research in this area should be promoted in order to assist Governments in identifying and considering phasing out subsidies that are market-distorting and have socially and environmentally damaging impacts. Subsidy reductions should take full account of the specific conditions and the different levels of development of individual countries and should consider potentially regressive impacts, particularly on developing countries. In addition, it would be desirable to use international cooperation and coordination to promote the reduction of subsidies where they have important implications for competitiveness.

26.    Governments should encourage the implementation of environmental management systems. In order to widely disseminate environmental management concepts in small and medium-sized enterprises, especially in developing countries, the instruments and methods of environmental management have to be adapted to their specific capacities and needs, making them easier to apply and less costly. Networks of intermediaries that can assist small and medium-sized enterprises in improving their environmental performance should be encouraged.

27.    Governments, at the national level, are encouraged to address the issue of occupational health and safety standards in small and medium-sized enterprises and in industry.

28.    Increased efforts are needed by Governments, in cooperation with industry, trade unions and civil society, to ensure universal compliance by industry, including informal enterprises, of core labour standards as contained in the Conventions of the International Labour Organization. Such standards include freedom of association, the right of collective bargaining, prohibition of forced and child labour, and non-discrimination in employment.

29.    Governments can set a good example and create a market for more environmentally friendly products and services by providing, as appropriate, adequate infrastructure, establishing goals on procurement that take account of environmental factors and encouraging all relevant governmental bodies to introduce environmental management systems. Governments can improve the quality of information on the environmental impact of products and services and, to that end, encourage the voluntary and transparent use of eco-labelling.

30.    Social objectives should be an integral part of sustainable development, and the overriding social policy challenge for Government and industry is to promote the positive impacts of industrial activities on social development, while limiting or eliminating the negative impacts. This can be achieved by various means, in particular through improved access to education and health care. Governments should give priority to ensuring universal access to basic education and to expanding access to secondary education. Tax incentives, for example, may be useful to encourage companies to invest in training and education for their workers. Governments and civil society should also address the problem of rapidly expanding labour forces, especially youth labour.

31.    Since the creation of employment plays a pivotal role in the alleviation of poverty, industrial policies should promote linkages between enterprises in the formal and informal sectors, including transnational corporations.

32.    Governments, where appropriate, should cooperate with industry, trade unions and other concerned organizations of civil society in expanding, strengthening and ensuring the sustainability of social security schemes. Governments should also ensure that the benefits of pension systems are secure and transferable between employers. Moreover, Governments, in cooperation with industry, should ensure that such coverage is as broad as possible and, where feasible, based on mandatory worker and employer participation.

33.    The fulfilment of greenhouse gas emission reduction targets agreed upon in the Kyoto Protocol to the United Nations Framework Convention on Climate Change 19/ needs to be achieved within set time-frames in developed countries. The fulfilment of commitments assumed by different countries, in accordance with the principle of common but differentiated responsibilities, is important.

34.    Attention should be given to studies that propose to improve the efficiency of resource use, including consideration of a tenfold improvement in resource productivity in industrialized countries in the long term and a possible fourfold increase in resource productivity in industrialized countries in the next two or three decades. Further research is required to study the feasibility of these goals and the practical measures needed for their implementation. Industrialized countries will have a special responsibility and must take the lead.

35. The concept of eco-efficiency should not be a substitute for changes in unsustainable lifestyles of consumers, and the pursuit of eco-efficiency also requires enhanced efforts to assist developing countries in their efforts to promote sustainable consumption and production patterns, by improving access to financial resources and environmentally sound technologies.

36. Voluntary initiatives by all subsectors of industry have been a valuable tool in protecting the environment. Governments should continue to encourage voluntary initiatives by industry, in both the formal and informal sectors, including voluntary and transparent codes of conduct, charters and codes of good practice, and the conclusion of voluntary agreements. Effective monitoring and follow-up programmes with stakeholder participation are needed, and industry should provide better and more complete dissemination of information of their voluntary initiatives. In addition, the assessment of progress made throughout a sector or country needs to be facilitated by developing a set of relevant indicators and metrics.

37. In order to strengthen domestic technological capabilities, it is useful for Governments to develop a national science and technology strategy and to support capacity-building to promote partnerships with industry. Greater cooperation between industry and public research and development bodies is needed to develop the skill and knowledge base necessary for a successful domestic technology strategy and the absorption of imported technologies.

38. Technology transfer and cooperation and the development of the human and institutional capacities to adapt, absorb and disseminate technologies and to generate technical knowledge and innovations are part of the same process and must be given equal importance. Governments have an important role to play in providing, inter alia, research and development institutions with incentives to promote and contribute to the development of institutional and human capacities.

39. Control and influence over the technological knowledge produced in publicly funded research opens up the potential for the generation of publicly owned technologies that could be made accessible to the developing countries and could be an important means for Governments to catalyse private-sector technology transfers. Proposals for the further study of the options with respect to those technologies and publicly funded research and development activities are welcomed.

40. The Governments of developed countries are invited to encourage private-sector companies in their countries to transfer environmentally sound technologies to developing countries. Such transfers should be underpinned by matching technical assistance and the transfer of education and skills, taking into account the unique circumstances and characteristics of small and medium-sized enterprises.

41. The ongoing process of globalization may bring with it a higher rate of technological progress and diffusion. Innovations in industry and their diffusion will no doubt be among the most important mechanisms for progressively delinking economic growth from environmental degradation. The dynamics of innovation in industry thus deserve careful study so as to determine what triggers innovation and how innovations are taken up by society. Studies are also needed on the possible environmental and social effects of innovation. Policies, including incentives, are needed which can steer innovation and investment in directions conducive to sustainable development. D. Recommendations for industry

42. Companies can enable consumers to make more informed choices by providing reliable and accurate information on the impacts, and where possible, conditions of production and qualities of products and services, through their marketing and advertising activities, environmental reporting and improved stakeholder dialogue.

43. Industry and civil society should work with Governments to strengthen secondary, vocational and advanced education and to ensure that it meets the developmental needs of society and the economy. This includes fair treatment of employees and constructive training programmes.

44. Environmentally oriented management should aim at both preventing environmental damage and encouraging sustainable use of natural resources through, for example, more efficient use of energy, water and raw materials; the reduction of emissions into the air, water and soil; the reduction of noise impacts; the reduction of waste; and the development of environmentally sound products and services. Environmental management systems and practices suitable to particular circumstances can enable business to control its environmental impacts and stimulate awareness of sustainability as a key business issue. To maintain and enhance competitiveness over the longer term, companies need to integrate environmental and social sustainability into their strategic planning. This includes developing cleaner products and processes that use resources more efficiently and minimize environmental impacts.

45. Industry should act to improve its environmental performance through appropriate implementation of environmental management systems. For example, transnational corporations should consider setting a time-frame within which to fully implement such systems. At the same time, Governments and industry must also work together to develop policies to ensure that compliance with standards is not too costly or difficult to achieve for companies in developing countries. National certification schemes should be based upon the principles of transparency and non-discrimination and should not be used as non-tariff trade barriers.

46. Large corporations should apply best practice in their own branches, both domestically and abroad. Companies are encouraged to provide environmentally sound technologies, supported by appropriate management techniques and training, inter alia, so as to help companies in other countries, particularly developing countries, to develop and implement environmentally sound policies. Those companies and corporations should also be proactive in promoting the implementation of core labour standards of the International Labour Organization.

47. Chambers of commerce and business organizations in developed and developing countries should be encouraged to cooperate in the transfer of technology and in the development of management tools and institutional frameworks for sustainable development.

48. There is a growing trend among a variety of stakeholders to hold industry accountable and responsible for the environmental impact of its operations and products throughout their entire life cycle. The industry and business sectors should respond positively to these demands by continuing to develop voluntary codes of conduct, charters and codes of practices. Industry and business should observe these codes when operating in developing countries and in economies in transition, in particular where environmental enforcement is still being developed.

49. The financial sector has an important role to play in promoting sustainable development. Voluntary commitments and initiatives taken by the financial sector (banks, savings and micro-credit institutions, and insurance companies) which promote sustainable development should be further developed and implemented, and strategies for monitoring progress should be developed. Since financial institutions play an important role in sustainable development in developing countries, their policies may include requirements and incentives to stimulate sustainable development and to report on their progress. E. Recommendations for the international community

50.    The principles of transparency, mutual recognition and non-discrimination, which serve as building blocks for the multilateral trading system, should also serve as basic principles in other areas, such as sustainable development. The development of environmental standards, voluntary codes of conduct and eco-labelling should be viewed as facilitating tools to ensure the fulfilment of environmental objectives, rather than as necessary elements to be checked for the achievement and measurement of sustainability.

51.    The international community needs to assist developing countries and economies in transition in their efforts to facilitate their adoption of production technologies that reduce environmental pressures while, at the same time, allowing them to be more competitive in international markets. Therefore, there is a real need to disseminate information about environmentally sound technologies to developing countries on a broader scale. The United Nations Industrial Development Organization, the United Nations Environment Programme, the United Nations Conference on Trade and Development and other relevant bodies should be invited to focus their programmes in order to promote the transfer of environmentally sound technologies, particularly to small and medium-sized enterprises in developing countries.

52.    The international community, working notably through the United Nations Educational, Scientific and Cultural Organization, the United Nations Industrial Development Organization, the United Nations Environment Programme, other United Nations bodies active in the implementation of chapters 30 and 36 of Agenda 21, and non-governmental organization partners, should strengthen the links between education and industry leading to sustainable development by assisting developing countries in their national efforts to strengthen secondary, vocational and advanced education.

53. When promoting measures favouring eco-efficiency, developed countries should pay special attention to the needs of developing countries, in particular by encouraging positive impacts, and to the importance of avoiding negative impacts on export opportunities and on market access for developing countries and, as appropriate, for countries with economies in transition. Implementation of environmental measures should not result in disguised barriers to trade.

54. Industrialization is a key element in promoting sustainable development in developing countries, particularly in Africa, and the least developed countries. It plays an important role in the efforts of those countries to eradicate poverty, create productive employment and integrate women into the development process. The business community, especially the small and medium-sized enterprises, have a particularly important role in enhancing industrialization. There is a need for the United Nations Industrial Development Organization, the United Nations Environment Programme and other relevant United Nations bodies to enhance their activities in developing and implementing sustainable industrial development strategies, including taking into account the implementation of the Second Industrial Decade for Africa.

55. The international community, the United Nations Industrial Development Organization and other relevant United Nations bodies are encouraged to provide appropriate financial and technical support to enable industries in developing countries to comply with national environmental goals and objectives through strategic environmental policies at the national and subnational levels.

56. Foreign direct investment can contribute to the achievement of sustainable development. To promote foreign direct investment flows to developing countries, in particular to the least developed among them, greater emphasis should be placed by the United Nations system on promotional and information-dissemination activities relating to investment opportunities in the developing countries.

57. There is a need for a further assessment of the implications of foreign investment for sustainable development, building on past work and taking into account relevant current activities. Such an assessment should take into account all existing relevant activities and processes and build on work undertaken in preparation for the fifth session of the Commission on Sustainable Development. The United Nations Conference on Trade and Development should be invited to investigate the issue and report the results to the Commission at its seventh session. Furthermore, the United Nations Conference on Trade and Development and the World Trade Organization should report on their relevant activities.

58. Multilateral financial institutions, through their investment agreements, programmes and projects, should contribute to sustainable development and the use of environmentally sound technologies.

59. Any negotiations on multilateral investment agreements should be participatory, transparent and non-discriminatory. The negotiations of these agreements should include the specific social, economic and environmental needs of developing countries. A multilateral agreement on investments is currently being negotiated in the Organisation for Economic Cooperation and Development. Without prejudice to the clear understanding in the World Trade Organization that future negotiations, if any, regarding a multilateral agreement on investments will take place only after an explicit consensus decision, future agreements on investments should take into account the objectives of sustainable development, and when developing countries are parties to those agreements, special attention should be given to their needs for investment.

60. Full implementation of the recommendations of the World Summit for Social Development 20/ would effectively address growing international income disparities among and within countries and the risk that some countries and groups might fall deeper into poverty and exclusion. Policies are needed to implement the commitments expressed in the Copenhagen Declaration on Social Development 21/ to, inter alia, expand productive employment, reduce unemployment, enhance social protection and reduce the vulnerability of the poorest groups. The International Labour Organization has a central role in monitoring the implementation of relevant labour standards and in stimulating patterns of economic growth that provide job opportunities. Concerted action by interested countries for the implementation of the 20/20 initiative is making a significant contribution to some developing countries, particularly the least developed.

61. Development of policies to implement the outcome of the Fourth World Conference on Women, which reaffirmed the advances made at the United Nations Conference on Environment and Development and emphasized the need to mainstream a gender perspective into the development agenda, is of great importance.

62. Further work should be undertaken at the international level to develop criteria to improve corporate environmental reporting. The United Nations Environment Programme and the United Nations Conference on Trade and Development could take the lead in that respect, in cooperation with other organizations, as appropriate.

63. Reflecting the sectoral focus on freshwater, the United Nations Environment Programme, working jointly with other relevant United Nations bodies, should be invited to cooperate with the relevant industry sectors to develop a voluntary statement of business-led commitment on the protection and sustainable management of water resources.

64. The secretariats of international conventions on the environment should consider the need to include technology and other technical information in a "clearinghouse" to facilitate fulfilling the commitments of the conventions.

65. Concern was expressed regarding the impact of the current intellectual property regime and the need for protection of intellectual property rights in the transfer of environmentally sound technologies. The international community should promote, facilitate and finance, as appropriate, access to and transfer of environmentally sound technologies and the corresponding know-how, in particular to developing countries, on favourable terms, including concessional and preferential terms, as mutually agreed, taking into account the need to protect intellectual property rights as well as the special needs of developing countries for the implementation of Agenda 21. Current forms of cooperation involving the public and private sectors of developing and developed countries should be built upon and expanded. It is important to identify barriers and restrictions to the transfer of publicly and privately owned environmentally sound technologies with a view to reducing such constraints, while creating specific incentives, fiscal and otherwise, for the transfer of such technologies.

66. South-South cooperation is an important instrument for facilitating the diffusion of technology and industry and as a complement to North-South relations. South-South cooperation could be further strengthened through such innovative mechanisms as trilateral arrangements. Such mechanisms should be supported as an important means of achieving sustainable development and the alleviation of poverty. The United Nations Environment Programme, the United Nations Industrial Development Organization and other relevant United Nations bodies should be invited to sustain and strengthen their programmes that promote the transfer of environmentally sound technologies, particularly to small and medium-sized industries in developing countries. Regional cooperation should also be encouraged and strengthened.

F. Future work

67. Relevant international organizations should study the different voluntary schemes that have been formulated with regard to industry, the effects of the technologies used to cope with problems and the prospects for introducing them elsewhere. It is important that, where necessary, they should create a framework to support the strengthening of efforts by the industry side.

68. The Commission should consider, with industry, how follow-up to the dialogue established with industry might be maintained and developed to ensure effective and continuing contributions from industry to the Commission's work programme. In so doing, the Commission should also consider how industry, through its international and sectoral organizations, should be consulted and associated with the follow-up to that dialogue. The Commission should, in cooperation with other relevant intergovernmental bodies, industry, trade unions, non-governmental organizations and other major groups, establish a process to review the effectiveness of voluntary initiatives intended to promote sustainable and equitable business practices. It is also important that the Commission continue to address the role of industry in sustainable development in the context of different sectoral and cross-sectoral themes allocated for its future sessions. The result of the work undertaken in the follow-up to the Joint Statement on Common Interests by the Secretary-General of the United Nations and the International Chambers of Commerce could be taken into account in further dialogue with industry in the Commission.

69. Governments and industry should be encouraged to improve, in general, their reporting of progress in voluntary initiatives and environmental protection and, in particular, as a follow-up to the industry segment at the sixth session of the Commission. Such reporting and follow-up activities should have the active involvement of the Commission, the United Nations Environment Programme, the United Nations Conference on Trade and Development, the United Nations Industrial Development Organization and others -- for example, the International Chambers of Commerce and the World Business Council on Sustainable Development, at the international level, and trade associations at the subsectoral level. The involvement of trade associations at the subsectoral level may be useful for ensuring better reporting in key subsectors such as energy and transport, mining, cement, paper and pulp, iron and steel, and chemicals. Discussion of changing consumption and production patterns at the seventh session could provide the first opportunity for such enhanced voluntary reporting.