G8 agenda: shared responsibility or self preservation?

Once again the G8 (Canada, France, Germany, Italy, Japan, Russia, UK and the US) have begun their annual summit. This year it takes place at Heiligendamm, a small seaside resort in North Germany, which has been transformed into a fortress, surrounded by twelve kilometres of welded metal fence, bristling with barbed wire and video cameras and defended by 18,000 police from all over Germany, 1,000 soldiers and an unknown number of security agents from the other G8 countries. Heads of state will be flown in by helicopter.

Why does Germany feel the need to barricade the G8 meeting, protecting it from the thousands of expected protestors? The answer lies in the deep unpopularity of G8 summits, since they are considered undemocratic by the majority world and protestors from the richest countries. Critics accuse the G8, who comprise most of the richest countries of the world, of making decisions regarding economic and trade policy on behalf of the rest of the world, but always to their advantage. The Left Party, part of the administration of Mecklenburg West Pomerania State, where the summit is to be held, supports the protests, arguing that the G8 should be abolished and the United Nations should meet in its place to discuss and legislate on world economic policy.

In recent weeks the press has focussed on aid for Africa and Germany’s poor record in this regard. At the end of last year’s summit in Russia, Merkel announced that “the struggle against poverty across the globe will be a priority.” But critics have been unimpressed by the slow pace at which Germany is increasing their contribution to development. It will take until 2010 before they reach 0.5% of GDP, and they will not reach the figure originally agreed upon (0.7%) for many years after that. Merkel has now finally pledged that the G8 will double development aid for Africa by 2010.

The G8 will not discuss farm subsidies

The reduction of farm subsidies in Europe and the US is conspicuously absent from the agenda. In 2005 the United Nations Human Development Report (UNHDR) titled ‘International Cooperation at a Crossroads: Aid, Trade and Security in an Unequal World’ stated that ‘The basic problem to be addressed in the World Trade Organisation negotiations on agriculture can be summarised in three words: rich country subsidies.’ . . ‘In the last round of world trade negotiations (Doha, Qatar 2001) rich countries promised to cut agricultural subsidies.’ 

But subsidies for agriculture in the G8 countries have grown steadily. Agricultural aid trickling from the rich to the poorest countries in the world was just over one billion dollars in 2005. When compared to the just under one billion dollars a day paid out in agricultural subsidies in those same rich countries, this is a pitiful amount. Even doubling development aid to Africa will have little or no effect as long as these iniquitous agricultural subsidies are allowed to continue to exist. When the G8 protestors meet in Rostock, this will be one of the issues they will raise. Another issue is likely to be the trade barriers in the European Union and the United States, Canada and Japan, which also stand in the way of poor African farmers exporting their agricultural goods to rich countries. The irony inherent in the G8’s demand for unrestricted trade in emerging countries, while pursuing protectionist policies in their own territories should be apparent to all.

However even the protestors will have to admit that Angela Merkel’s G8 Agenda has its good points. Merkel will try her utmost, despite fierce opposition from the Bush administration, to push climate change up the agenda for discussion. She is deeply concerned about the findings of the Intergovernmental Panel on Climate Change (IPCC): that global warming is caused mainly by human activities and that it is increasing faster than had formerly been predicted. Germany takes climate change seriously and is a world leader in environmental research and environmentally friendly manufacturing processes, products and services, and will pour 255 million euros into climate-related research over the next few years. It comes as no surprise therefore that Merkel’s agenda stresses the need for urgent action in order to slow down global warming.

Germany’s development minister, Heidmarie Wieczorek-Zeul recognises that global warming, though caused by the world’s industrialised countries, will have the most devastating effect on the poorest and least industrialised: Africa, small islands in the South Pacific and the heavily populated river deltas of Asia. Wieczorek-Zeul and Merkel, propose that responsibility for halting global warming should be shared: “Complementary national, regional and global policy frame-works that co-ordinate, rather than compete with each other, will strengthen the effectiveness of the measures.” Early drafts of Merkel’s G8 Agenda propose a two-pronged strategy:

i) Emissions reduction

In order to reduce CO2 emissions, energy should be produced through renewable technologies as much as possible.

ii) Increased energy efficiency

The development of renewable energy technologies alone is insufficient for preventing climate change. Energy efficiency could potentially cut down energy consumption to a fraction of present day use.

Unlike the recent diversionary tactics announced by President Bush, Merkel proposes that the G8 should support the UN climate process, since this is the appropriate forum for negotiating future global action on climate change. Energy efficiency measures will have to be carried out through international cooperation. She underlines the need to work through the International Agency for Energy (IEA) to develop international legislation on carbon emissions and energy efficiency. Germany proposes that both renewable energy and energy efficiency technologies need to be shared with developing and underdeveloped countries, in order to enable them to cut down on carbon emissions.

Shared Responsibility

Germany proposes to reduce their own energy consumption by 20% through increased efficiency. They have decided to go ahead with everything they propose, regardless of whether other members of the G8 agree with their proposals. They will increase investment in research and development into: renewable energy, energy-efficient buildings, innovating engine concepts and integrated affordable public transport. Germany is using the G8 summit to highlight the threat of global warming and they are proposing that the only way to halt it will be through shared responsibility, even if the US does not agree to these proposals.

There have been numerous conferences and treaties at which many of the world’s nations have agreed to cut down on their carbon dioxide emissions, but this is the first time a member of the G8 actually puts forward a concrete proposal of measures to take in order to decrease energy consumption and cut down on carbon dioxide emissions. The emphasis has changed from conferences dominated by arguments about who should cut down on emissions first and who should be compensated, to suggestions that responsibility for cutting emissions should be shared, industrialised countries taking the lead, subsequently exporting technologies to the rest of the world. Bush, of course, will try to sideline these proposals but Merkel will fight to the last minute to retain them.

Germany is to be applauded for their contributions towards the development of renewable energy technologies. Yet the G8 Agenda ignores hundreds of billions of dollars in fossil fuel subsidies, including increasing levels of support from aid agencies like the World Bank. The G8 asked the World Bank to finance the shift from carbon to renewable energy technologies in the developing world. Jamal Saghir, director of energy for the World Bank, said that the Bank had increased its investment in renewable energy and energy efficiency projects from 14 % in 1994 to 37% today. However the Bank Information Center, a Washington-based NGO, has compiled figures demonstrating that although the World Bank increased support for renewable energy, their support for fossil fuels increased by 93% between 2005 to 2006.

The International Finance Corporation, the private sector investment arm of the World Bank, increased its financial support for oil companies by 77%. Oil Change International states; "if G8 leaders want the World Bank and other international financial institutions to play a leading role in the fight against climate change, they need to demand that these institutions stop using public money to bankroll the oil industry. It’s outrageous that we are funnelling billions of dollars worth of aid money into the pockets of oil companies instead of using that money to fight poverty and kick-start a new energy revolution." Part of the reason why fossil fuel subsidies are not mentioned in the G8 Agenda is due to pressure from the US, which has been fighting the inclusion of the two degree centigrade limit to global warming in the final draft of the Agenda.

Angela Merkel’s climate change proposals have loomed large in the press over recent weeks. But climate change is not top of the Agenda. The G8 Agenda also covers in order of priority:

• Freedom of Investment, investment environment and social responsibility

• Promoting innovation – protecting innovation 

• Responsibility for raw materials: Transparency and sustainable growth

Trade rules favour the G8

The G8 has always supported the free market and this year’s agenda is no different in this respect. Statements such as ‘Companies from G8 countries investing in emerging economies need to find the same open investment environment as companies from such countries investing in G8 countries’ make this clear. The free market prevents poor countries from exercising their right to manage their own economies and promotes the interests of big business from the rich countries through trade interventions that harm the poor and the environment. Current trade rules favour the G8 and have caused a worsening of conditions in the third world.

Germany supports the Organisation of Economic Cooperation and Development (OECD) initiative, which will use the Global Science Forum to develop a Research Agenda for the next decade. The Global Science Forum brings policy officials from OECD countries together to discuss opportunities for international cooperation. This emphasis on sharing research and development echoes the German policy of sharing responsibility for renewable energy research. 

However the agenda also states that the G8 is committed to cooperation with the World Intellectual Property Organization (WIPO). WIPO has been much criticized for its emphasis on intellectual property rights at the expense of development. In 2004, 500 scientists, academics, legal experts and consumer advocates, including two Nobel laureates, called for WIPO to be changed. They stressed that development was more important than the protection of intellectual property rights. ‘A one size fits all approach that embraces the highest levels of intellectual property protection for everyone leads to unjust and burdensome outcomes for countries that are struggling to meet the most basic needs of their citizens,’ said a spokesman in Geneva. Brazil and Argentina proposed that poor countries should have access to knowledge and technology, so that they could collaborate and share information in order to stimulate innovation.

But their proposal fell on deaf ears. The industrialised nations opposed it, arguing that WIPO is already responding to development needs. But the developing countries say that WIPO denies them access to new technologies and research findings. If Merkel takes her commitment to the alleviation of global poverty seriously, she should propose making changes to WIPO in order that new technologies and research findings can be shared with third world countries.

Responsibility for raw materials: transparency and sustainable growth

The G8 Agenda supports the Extractive Industries Transparency Initiative (EITI), which was set up by Bush and Blair in 2001 in response to pressure from groups such as Global Witness. Transparency, in this context, means that extractive industries, i.e. mining companies, should be made to publish what they have paid, in bribes and incentives, in order to carry out prospective mining projects. NGOs, on the whole, support the EITI but it seems unlikely that it will work. The international mining companies, Freeport and Rio Tinto Zinc, paid billions of dollars in bribes to the Indonesian army, who have been responsible for the genocide in Irian Jaya,. These bribes came to light as a result of a US investigation and not as a result of an EITI investigation. British companies have resisted revealing payments and it was Blair himself who stopped the BAE systems enquiry. These are just two examples suggesting that EITI may not be as effective as was hoped.  

In 2001 the World Bank launched its Extractive Industries Review (EIR) in order to find out whether mining, oil and gas investment were helping to reduce global poverty. They came to the conclusion that, generally speaking, they were not. Large scale mining imposes a heavy toll on local communities, on their fragile economies and on the environment. Dr Salim, who oversaw the review, called on the bank to stop supporting coal mining and to phase out commitments to oil and gas over the next four years. He also called on the bank to redirect the money currently allocated to mining projects to the repair of the damage and injustices caused by mining.

He recommended that International Labour Organization standards should be followed, that ecologically critical habitats should be classified as ‘no go areas’, and that the World Bank should promote research and development of renewable energy. He called for an end to mine waste dumping into rivers and the sea and he demanded that indigenous peoples be granted the right to ‘fully informed prior consent’ before any mining project be allowed to proceed. However, in 2003 the World Bank’s president, James Wolfensohn rejected most of Dr Salim’s recommendations.

Merkel’s G8 Agenda admits that ‘In many cases... extraction and processing of resources are associated with environmental destruction, armed conflict and state fragility.’ So, although her agenda states that ‘raw materials are an indispensable prerequisite for sustainable growth’ she has reservations about the way in which present day large scale mining is carried out. Germany has long held that the same high standards should be applied to mining throughout the world as are applied to mining in Germany. However she is likely to encounter opposition from the Bush administration to any proposals limiting the power of international mining corporations.

The G8 Agenda also supports the Kimberley Process Certification Scheme (KPCS), a process designed to certify the origin of conflict-free diamonds (blood diamonds).  It was set up in 2003 in response to Global Witness’s claims that diamonds were being used to finance war and human rights abuses. However both Global Witness and Survival International have highlighted continuing human rights abuses in diamond-producing countries such as Botswana. Amnesty International, though welcoming the Kimberley Process, says that it doesn’t go far enough; “. .until the diamond trade is subject to mandatory, impartial monitoring, there is still no effective guarantee that all conflict diamonds will be identified and removed from the market.” Let us hope that Merkel will press for mandatory, impartial monitoring by a UN body.

The G8 Agenda also supports the Green Lead Project and the Metals, Mining and Sustainable Development project. In 2003 the International Council on Mining and Metals (ICMM) “committed corporate members to implement and measure their performance against 10 principles” These are almost exactly the same issues as those identified by Dr Emil Salim in his Extractive Industries Review.

1. Implement and maintain ethical business practices and sound systems of corporate governance.

2. Integrate sustainable development considerations within the corporate decision-making process.

3. Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities.

4. Implement risk management strategies based on valid data and sound science.

5. Seek continual improvement of our health and safety performance.

6. Seek continual improvement of our environmental performance.

7. Contribute to conservation of biodiversity and integrated approaches to land use planning.

8. Facilitate and encourage responsible product design, use, re-use, recycling and disposal of our products.

9. Contribute to the social, economic and institutional development of the communities in which we operate.

10. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders.

Here again the lack of an international mandatory, impartial monitoring body makes the ICMM’s commitment to these principles somewhat meaningless. Mining corporations’ duty to their shareholders to maximise profits tends to take precedence over any human rights, sustainable development or environmental issues.

Although Merkel admits that mining is often associated with environmental destruction, she extols the virtues of “Continuing to support resource-rich countries in their efforts to further expand their resource potential”. But mining produces prodigious quantities of CO2, as the Oko Institut in Germany points out. It is ironic that Merkel is proposing a reduction in CO2 through the development of renewable energy technologies, and yet she supports the expansion of mining projects worldwide. This will increase greenhouse gas production, in addition to causing environmental destruction. If we are to share responsibility for halting global warming, as she suggests, we need to decrease our use of mineral resources, since this will necessarily lead to a decrease in fossil fuel consumption.

The Stern Review is not mentioned

The G8 Agenda supports the equator principle and the partnership between the United Nations Environment Programme (UNEP) and the financial sector. The equator principle, established in April 2007 in Canada, comprises of a set of globally recognized, voluntary guidelines established to assess and manage social and environmental risk in project financing. Over 160 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance. Merkel would like to encourage more banks to collaborate with UNEP.

However the G8 Agenda makes no mention of the Stern Review, which recently assessed the economic cost of climate change. “The evidence gathered by the Review leads to a simple conclusion: the benefits of strong and early action far outweigh the economic costs of not acting.” Again this omission may be due to pressure from Washington, since the Stern Report spoke of “policies that distort the market” in favour of fossil fuels. The report was referring to the $250 billion a year in direct and indirect subsidies to oil and other fossil fuels. The oil industry benefits from income tax benefits, indirect subsidies on gasoline sales tax and tax subsidies for modernizing and expanding their refineries. In addition to this the oil industry causes billions of dollars worth of oil-related health and environmental damage. California Public Interest Research Group (CalPIRG) produced a report which showed that “the oil industry is spending millions each year fighting clean air laws.” 

Merkel’s February draft of the G8 summit Agenda clearly does not go far enough, since it still supports free trade, WTO rules and the market economy. Rich country agricultural subsidies are not even mentioned, despite promises at Doha that they would be reduced. World Bank funding of the expansion of the oil industry is conspicuously absent from the agenda, despite the increase in carbon emissions that have already resulted from this. There is no mention of the Stern Report. However Merkel has committed the G8 countries to sharing responsibility for limiting global warming and she has set out concrete strategies for developing renewable energy technologies and energy conservation. She will have an uphill struggle to keep the 2 degree centigrade limit to global warming in the final Agenda, since Washington will do everything in their power to have this part of the Agenda removed.  

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