Rio2012: Tough fight over financial resources and technology transfer

Rio2012 closure ceremony.
(Mark Garten/UN Photo)

Governments show a reasonable satisfaction on the delicate balance achieved in the outcome document for the United Nations Conference on Sustainable Development (Rio2012). But many of them are also deeply disappointed with the lack of ambition in the section on the means of implementation, considered a step backwards by some negotiators, according to the analysis of the Third World Network (TWN).

The very diverging positions between developed and developing countries over the provision of financial resources and technology transfer was the reason behind that disappointment. Since the negotiations on the outcome document began in New York and on the road to Rio, monitoring at detail by TWN, these issues were among the most heavily contested areas.

From the perspective of the G77 and China, without the required finance and transfer of technology it is difficult to see how the many commitments contained within the document are going to be implemented.

The final draft of the outcome document for the Rio2012 Conference entitled the “Future We Want” was agreed to by all member states and adopted by the heads of State and government at the conclusion of the Conference on Friday 22.

But Bolivia, Cuba, Kenya, Venezuela and Egypt –speaking on behalf of the Arab nations–, among other countries, had already expressed regret over the lack of clear commitment by developed countries to provide finance and technology transfer, characterizing it as "a step backwards".

The saving grace is that at the very least, the elements for future delivery on the means of implementation have been preserved, as the document establishes both financial and technology mechanisms.

An intergovernmental process under the UN General Assembly is to propose options on an effective "Sustainable Development Financing Strategy" to facilitate the mobilization of resources in achieving the objectives in that respect. Similarly, a facilitation mechanism for the transfer of environmentally sound technologies is to be developed. Moreover, the outcome document agreed to explore modalities for enhanced access to these technologies by developing countries.


Finance: No numbers, no new and additional resources

The issue of finance was among the most contentious in the negotiations. Initial proposals by the G77 and China (G77) had called on the developed countries to provide new and additional resources exceeding US$ 30 billion per year from 2013-17, and to enhance the mobilization to US$100 billion per year from 2018 onwards and work towards setting up a financial mechanism, including a possible sustainable development fund.

But United States, Canada, Japan, Australia, New Zealand and Switzerland insisted that they were not in the position to commit new funds, and the G77 eventually dropped this proposal.

In its place, the G77 proposed the establishment of an intergovernmental process under the UN General Assembly to define a financing framework for the provision of new, additional and predictable resources, including for technology transfer. Even this watered down proposal drew heavy criticism from the developed countries, and the G77 fought hard to retain the text on this.

On 18 June, Brazil introduced a new text in the informal negotiations. The text attempted to broaden the consultative process and define further its objectives, characterizing the proposed framework as a Sustainable Development Financing Strategy.

The new text reads: "We agree to establish an intergovernmental process under the United Nations General Assembly, with technical support from the UN System, and in open and broad consultation with relevant international and regional financial institutions and other relevant stakeholders. The process will assess financing needs, consider the effectiveness, consistency and synergies of existing instruments and frameworks, and evaluate additional initiatives, with a view to prepare a report proposing options on an effective Sustainable Development Financing Strategy to facilitate the mobilization of resources and their effective use in achieving sustainable development objectives."

In addition, the implementation of the process is to be carried out by an intergovernmental committee, comprising thirty experts nominated by regional groups, with equitable geographical representation. It is to conclude its work by 2014. The resulting report would be considered by the General Assembly, which is requested to take appropriate actions.

Objections however persisted, especially by the United States and Canada. When the Brazilian Presidency presented the final draft text for adoption on 19 June, the paragraphs in question (255-257) remained unchanged, which was no small victory for the developing countries.

The G77 had been consistently asking for new and additional resources to be committed by the developed countries, as the last 20 years have shown that existing resources are not enough. With the removal of the G77 proposal on the "numbers", concrete new and additional resources have thus not been agreed to. Ironically, the only reference to additionality that is linked to responsibility in the finance section is in the paragraph addressing South-South cooperation.


Technology transfer: Intellectual property rights not addressed

Negotiators came to Rio fighting an uphill battle on technology transfer, as developed countries were apparently backtracking from their previous commitments since the Rio Summit in 1992. The US, EU, Canada and Australia had not even wanted any reference to "technology transfer" in the title of the relevant section. The title now simply reads "Technology".

The US, supported by Canada, had wanted the words "voluntary transfer on mutually agreed terms and conditions" to apply to all references to technology transfer.

The G77, however, had been adamant that technology transfer should be carried out on favorable terms, including on concessional and preferential terms. It is only where the technology transfer is on "concessional and preferential terms" that these should be "mutually agreed".

They pointed to the Johannesburg Plan of Implementation, which has references to the promotion of technology transfer and diffusion of environmentally sound technologies and corresponding know-how "on favorable terms, including on concessional and preferential terms, as mutually agreed..."

While the term "voluntary" was removed during the course of the negotiations, the new text introduced by the Brazilian Presidency on 18 June retained "mutually agreed terms".

In an attempt to balance the text, the Presidency also incorporated language from Article 7 of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

Hence, the relevant sentence reads: "We emphasize the importance of implementing technology transfer on mutually agreed terms and reaffirm that the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations." (The TRIPS language is contained in the second half of the sentence).

The G77 had also wanted to address the issue of intellectual property rights, in particular, the need to consider their impact on the access to environmentally sound technologies. The US and some other developed countries including the EU, Japan, Australia, and Switzerland wanted to remove any references to the issue.

The compilation text of 16 June put together by the Brazilian Presidency retained reference to Intellectual property rights and included language referring to the "making use of existing flexibilities and addressing the issue of access to technologies with particular attention to the needs of developing countries".

After strenuous objections from the developed countries, this text evolved and in the 18 June proposal of the Brazilian Presidency, the reference to flexibilities was removed and replaced by language reaffirming adherence to the objectives and principles of the TRIPS agreement.

According to sources, the US had adamantly opposed the idea of technology transfer to developing countries on preferential and concessional terms. It claimed that it too wanted to access technologies and failed to see the reason why developing countries should get preferential and concessional terms, and not developed countries.

In addition, the US argued that any technology transfer should be on voluntary and mutually agreed terms because to agree on anything less would be to imply "coercive and involuntary" technology transfer, and that their companies would then suffer intellectual property violations.

The G77's attempt to link the issue of Intellectual property rights to access to environmentally sound technologies, and therefore the need to explore modalities for enhanced access to such technologies by developing countries, drew sharp responses from the US. The US claimed that this would be rewriting the TRIPS agreement and that any reference to flexibilities would imply that something is wrong with the TRIPS agreement.

Canada and Japan joined the US in asking for the retention of the reference to mutually agreed terms. The US raised its concerns with referring selectively to the TRIPS agreement, while Japan, Switzerland and the EU suggested the deletion of the paragraph dealing with intellectual property rights.

In the end, the final draft outcome document that was adopted recalls the provisions on technology transfer, finance, access to information, and intellectual property rights as agreed in the Johannesburg Plan of Implementation, in particular, its call to "promote, facilitate and finance, as appropriate, access to and the development, transfer and diffusion of environmentally sound technologies and corresponding know-how, in particular to developing countries, on favorable terms, including on concessional and preferential terms, as mutually agreed."

However, at the insistence of the US, the following sentence was inserted: "We also take note of the further evolution of discussions and agreements on these issues since the Johannesburg Plan of Implementation."

This is understood to refer to the TRIPS agreement and developments in other fora such as the World Intellectual Property Organisation (WIPO), with the implicit goal of detracting from the Johannesburg Plan of Implementation language and qualifying it further.

The paragraph that addressed intellectual property rights was removed from the final draft outcome document, and with that, the intention of the G77 to draw attention to the potential negative implications to the access to environmentally sound technologies and the need to address this.

Nonetheless, language referring to the need to explore modalities in the relevant fora for enhanced access to such technologies by developing countries was retained, opening the door to future action on the issue.

Furthermore, while questions and concerns were also raised about the G77 proposal of 15 June for an international technology facilitation mechanism, the final draft of the outcome document retains the proposal, but in slightly modified language (paragraph 275): "We request relevant UN agencies to identify options for a facilitation mechanism that promotes the development, transfer and dissemination of clean and environmentally sound technologies by, inter alia, assessing technology needs of developing countries, options to address them and capacity building. We request the UN Secretary General, on the basis of the options identified and taking into account existing models, to make recommendations regarding the facilitation mechanism to the 67th Session of the UN General Assembly."

This provides a vehicle for future delivery of technology transfer to developing countries.

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