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120358019
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Biodiversity [2]
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120358019
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Biodiversity [2]
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collections
Records of the Council on Environmental Quality (Clinton Administration)
Kathleen McGinty's Files
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FOIA Number: 2012-0769-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Council on Environmental Quality
Series/Staff Member:
Kathleen (Katie) McGinty
Subseries:
OA/ID Number:
2618
FolderID:
Folder Title:
Biodiversity [2]
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Section:
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S
61
5
8
1
93
05:59 PM
NSF CAD BBS
PO2
Forgotten in Capital: A Biodiversity Center
1
WASHINGTON, Jan 21 (AP) - An
desk, apparently stopping in the Office
executive order that would have creat-
of Management and Budget, said the
ed a national center on plant and and-
official, who had helped put together I
mal species was shelved in the final
multiagency agreement to cooperate
days of the Bush Administration ap-
on the center. The official, who is now
0
parently lost in the last-minute now of
working in the Clinton Administration
0
work, an official of that Administration
in a holdover joh, spoke Thursday only
says.
on the condition of anonymity.
1.
It is unclear whether President Clin
B.
The biodiversity center, which would
have served as an information clear-
ton might now have an interest in creg
to
le
inghouse on Earth's varied life forms,
scing such a center.
19
had been seen as a: way for President
George Bush to mute the criticism of
5.
his refusal to sign the Biodiversity
Company News:
15
Treaty at the Earth Summit in Rio de
Tuesday through Saturday
15
Janeiro last year.
:1-
But the order never got to Mr. Bush's
Business Day
Tom-
In This me your agenda with Jack
Mary
100 2557
012/013
NEWS
Mediation sought on biotechnology disputes
San Francisco. The biotachnology industry,
to calk face-to-face. "Wc were hoping that
and signed up thousands of chefs, growers
confronted with indications that genetically
it might create a forum that would allow
and distributors.
engineered foods face a wary or even hostile
discourse at it slightly lower volume",
The FDA has received 3,200 comments
public, has enlisted a mediation team to help
says Richard Godown, president of the
on its proposed regulations. About 35 per
it find common ground with its critics.
Washington-based trade association.
cent have asked that all genetically engi-
The first genetically engineered whole
The association is concerned that the
neered foods be labelled, with 50 per cent
food, a tomato made by Calgene Inc., is
public might not accept the new products
also requesting premarket testing to prove
likely to reach grocery store shelves later
because of concern about the way the gov-
safety. Food allergies were the concern of
this year (see Nature 357, 352: 1992). But
emment regulates them. Last year. the US
40 per cent. while 10 per cent raised ethical
already chefs are vowing not to serve it,
Food and Drug Administration (FDA) said
or religious issues. The FDA is considering
farmers are agreeing not to grow it and
that genetically engineered foods would not
an open meeting to talk about the labelling
consumers are asking how it and other biotech
require any special labelling or safety
question and is meeting experts on food
foods will be labelled. Earlier this month.
testing unless there were indications that
allergies, said James Maryanski, biotech-
Campbell Soups announced that it had no
they might cause allergic reactions or pose
nology coordinator for the agency's Center
plans to sell any product containing the
safety concerns.
for Food Safety and Applied Nutrition.
tomato, which it helped to develop.
Environmental groups, convinced that
FDA officials also have agreed to an
The Industrial Biotechnology Associa-
the foods should be labelled. tested for safety
initial meeting with Resolve, which is con-
tion has asked Resolve. a centre for environ-
and registered, urged their members to write
tacting environmental groups such as the
mental dispute resolution in Washington, to
to the FDA. Jeremy Rifkin, an outspoken
Enviror mental Defense Fund and the
see whether its opponents would be willing
industry critic, began organizing a boycott
National Wildlife Federation. Rifkin has
not been approached. Calgene is also a
participant.
US keeps promise
on biodiversity
Resolve. a subsidiary of the World Wild-
life Fund, helped to bring about the National
Wetlands Policy Forum that led to a govern-
Washington. Outgoing President George
with the least possible political content".
ment policy stipulating no net loss of
Bush this week was expected to sign an
says Peter Jutro, who heads the biodiversity
wetlands. For five years, it has conducted a
executive order creating a National
research programme at the Environmental
quarterly roundtable meeting on the
Biodiversity Center to serve as a repository
Protection Agency.
ecological effects of pesticides with repre-
for scientific data on biodiversity within the
Both the centre and an international work-
sentativ from government, industry, uni-
United States and its territories. The order,
shop on biological surveys held last week in
versities. and the environmental movement.
coming in the final days of an administra-
Washington fulfil promises made by the
The organization typically convenes a
tion with a reputation for dragging its feet
Bush administration during the environ-
group of about 20 people holding diverse
on environmental issues, directs the
mental summit held last summer in Rio de
views a particular issue and tries 10 reach
Smithsonian Institution to take the lead in
Janeiro. Although the United States did not
a consensus. The result can be policy recom-
working out an agreement among federal
sign the convention on biological diversity
mendat ons, agreements on joint research or
agencies to establish and fund such a centre.
at the summit, it endorsed the idea of
even a draft of new federal rules. In the case
At present the US government has no
establishing centres to coordinate scientific
of genetically engineered foods, new regu-
clearinghouse for biodiversity information.
data-gathering within individual countries
lations would not be possible because the
Taxonomic and other data on species, habi-
and offered to host the first international
FDA did not initiate the process.
tats and ecosystems exist in many places,
workshop to set standards for coordinating
Resolve expects to complete a feasibility
including muscums, universities. govern-
biological surveys.
study within a couple of months to decide
ment agencies and conservation groups. In
White House officials wanted to hold the
whether the project should proceed. what its
its simplest form the new centre would SCI
workshop. involving scientists and admin-
goals would be and who would fund it.
up an electronic network linking the differ-
istrators from several US government agen-
Potential participants are optimistic.
ent databases; a more elaborate plan would
cies as well as representatives from 12 other
Sally Lehrman
be a single large database a: a location yet to
countries, before the end of Bush's term of
be determined.
office on Wednesday this week. Its recom-
The executive order designates a com-
mendations will go to the United Nations
mittee of at least a dozen federal agencies to
Environment Programme and 10 other of-
determine the scope and structure of the new
ganizations working on biodiversity issues.
centre, which could be in operation within 8
Participants at the workshop were
year.
concerned that museums and private
The centre is not expected to require the
institutions might be reluctant to share their
construction of a new facility. In would nei-
data, particularly with commercial interests
ther collect data nor do biological surveys.
that might use them for profit. "Some of the
I'm afraid
"There's a strong argument for keeping the
best experience in this area is in private
it's " fake.
science separate from the policy", says Tho-
ZOOS, herbariums and organizations like the
mas Lovejoy, assistant secretary for external
Nature Conservancy", says Jutro. "We have
Sour
affairs at the Smithsonian and a leading
to have H big (ent."
figure in negotiations to create the centre.
Although Bush was expected to sign
AND WARNOL
In fact. one reason the Smithsonian was
the order creating the centre before leaving
selected is JES reputation as a nonpartisan
office on 20 January. Clinton also supports
research agency. "Biodiversity is still a po-
the idea, says Tutro. "I think it will be
litically touchy issue, and they [the White
followed up enthusiastically by the next
House) wanted to put the centre somewhere
administration
Tony Reichhardt
BIRCH
NATURE
VOL 361
21
JANUARY
1993
197
02/04/93
15:44
202 786 2557
013/013
SCiENCESCOPE
edited by RICHARD STONE
Transition Chaos at
RICK KOZAX
advantage of a clause in the White
Science Agencies
House order that allows each
As Science went to press, a last-
agency to keep one Senate-con-
minure battle between the incom-
firmed appointee to run the shop
ing and outgoing presidential ad-
until a replacement is named. And
ministrations had thrown the fed-
while National Institutes of
eral science agencies into a state
Health Director Bemadine Healy
of pandemonium, with agency
had ordered her office packed up,
heads scrambling to find out if
officials there say that she, too, is
their jobs would survive the inau-
hoping for a sim/lar reprieve.
Meanwhile, officials at the Food
guration.
The trouble started when the
and Drug Administration (FDA)
White House issued a surprise no-
refused to speculate on FDA com-
cice giving all top presidential ap-
missioner David Kessler's future.
pointees less than a week to clear
Ironically, National Science
out their desks-whether or not
Foundation (NSF) director
Should 1 etay or should I go? David Kessler, FDA commissioner, and
Bill Clinton wanted them to stay.
Walter Massey, who has been
NIH Director Bernadine Healy.
In the one-paragraph memo, the
shielded from much of the anmult
Bush White House accepted the
Stunned agency officials started
subject to automatic curriover
thanks to his special 6-year term,
resignations of most top presiden-
placing frantic calls to the Clinton
with a new administration) are
may acrually be among the first
tial appointees, effective 20 Janu-
team to try to save their posts, at
among those appointees making
to leave NSF officials confirm
ary. That move, reportedly 1 re-
least until Clinron could name
lasc-minure attempts to har E on.
that he is considering a wp job
Election of deteriorating relations
their successors.
Officials at the National Aero-
wich the University of Califor-
between the two transition reams,
Officials at top science posts
nautics and Space Administra-
nia, and a Clinton aide predicts
turned a leisurely changing of
(many of which are considered
tion say that their administrator,
an announcement from Massey
the guard into 3 lifeboar drill:
nonpolitical and not necessarily
Daniel Goldin, expects to take
within a month.
Bush to Order Creation
rhetoric is about to become reality.
wide monitoring program. It would
The order would follow a flurry
of Biodiversity Center
As one of his last presidential ac-
be housed at the Smithsondan In-
of environmental nctions by fed-
After declining to sign the bio-
tions, Bush earlier this week was
stitution in Washington, D.C.,
eral agencies last week, including
diversity treaty at the Earth Sum-
expected to sign: an order that calls
rather than at a federal line agency
decisions to limit logging in the
mit 111 Brazil last June, President
for the center's astablishme
in order to "ay to keep science
Pacific Northwest to protect the
George Bush offered environmen-
The center would assemble
separate from policy," says Tho-
endangered sported owl; to life a
calises an olive branch. He prom-
information OF animal and plant
mas E. Lovejoy, a prominent bi-
requirement that companies ob-
ised to creare a national center for
diversity in the United States, and
ologist and the Smithsonian's
rain permits for small-scale tests
biodiversity studies. Now, the
serve in a United Nations world-
secretary for external affairs.
of genetically engineered pasti-
cides; and to transfer federal land
to the state of California for use as
It's Official: SSC Is a U.S. Baby
a nuclear waste demp.
The promise of a biodiversity
Remember all those foreign cuntributions to the Su-
DOE must gettrem foreign sources. And it's even 8SS
than the commitment of $650 million in foreign contri-
center had languished for months
perconducting Super Collider (SSC) that always
seemed just a diplomatic nod away? That
butlons over the next 3 years that DOE nus!
because the Department of the In-
at least, is the way the Department of En-
have by 1 June, if It Is not to lose the re st of
terior and other agencies opposed
ergy (DOE) portrayed the project over the
its 1993 funding.
it. In the end, says a federal scien-
past tow years, us DOE officials returned
But ather than WM the project, Walkins
tist close to the negotiations, the
from one overseas trip. after another with
wants Congress to change the rules. We
Office of Management and Bud-
nothing but encouraging signals to report.
should not be in the position of also
get-spying a chance for Bush to
Now it turns out that the prospect of winning
another nation to determine the (SSC's)
burnish his environmental record
substantial foreign contributions to it $8.3
schedule," he wrote. Bullo It like a ship the
---overrode Interior's objections.
billion project isn't so not-and probably never was.
former Navy admirel suggested: Give DOE full I und-
Last week, DOE Secretary James Walkins offi-
Ing up front. "I recognize that this Is a major change
Because the president lacks di-
that demands serious discussion," Watkins conce
rect authority over the Smith-
clally confinned what many researchers have SUS-
pacted: The United States will have to build the SSC
"However, the approach would substantially improve
sonian, the decree would order sev-
without much help from abroad. in a letter responding
our ability to successfully compete this project.
eml other federal entities to help
to questions from Representative George Brown
Brown had not responded as Science went 10
the Smithsonian att up a board of
(D-CA). the chairman of the House Science Cemmit-
preas. But one of his questions may give a clue to the
advisers that will write an operat-
tee, Watkins said that DOE thinks it C85 get just $400
thinking on Capitol H&L What are the Implications for
plan, including COST estimates,
million worth of aid for the SSC from foreign countries
termination of the project?' he asked. Watkins an-
for the center. Lovejoy, who offi-
by 1999-primarily in the form of labor and materials
swer: an ustimated $278 million in shutdown COE'S,
clals GRV is likely to head the
from Russia. China, and India. That's less than one-
and "a negative message to the [work'] about our
board, predicts the center will be
quarter of the $1.7 billion that Congress has stoulared
commitment is science and technology."
up and running by early next year.
SCIENCE
VOL. 219
447
DRAFT -- OPEN FOR COMMENT AND SUBSTANTIAL REVISION
TO:
Whom It May Concern
FROM:
Biodiversity Working Group --
David Beier, Genentech
Isabelle Claxton, Merck
T. J. Glauthier/Richard Mott, WWF
Gareth Porter, EESI
Walt Reid, WRI
SUBJECT: Convention on Biological Diversity
DATE:
February 22, 1993
As the Clinton/Gore Administration reconsiders the United
States position on the Convention on Biological Diversity
("Biodiversity Treaty"), it is appropriate to examine the
potential for harmonizing the interests of environmental
preservation and conservation with intellectual property rights.
Vice President Gore has stated that:
The Clinton-Gore Administration will
present
a
coherent plan for protecting biodiversity and
intellectual property rights in a way that enhances
conservation and facilitates global research efforts by
U.S. businesses and universities
[thereby] linking
economic progress to the protection of biodiversity. 1
As the Working Group continues its work, it is appropriate
to review two documents. First, assuming that it is possible to
reach the desired harmonization, a draft statement to be
submitted with the signature of the United States to the
Biodiversity Treaty. 2 ATTACHMENT 1. This statement indicates
that in the event of a substantially different interpretation
being given to the provisions of the Convention, the United
States reserves its rights under Article 38 to withdraw as
members of the Convention.
1 Gore, "Essentials for Economic Progress: Protect
Biodiversity and Intellectual Property Rights, 4 Journal of NIH
Research 18,19 (1992).
2 This latter statement would also be submitted to the
Senate in connection with the submission of the treaty to the
United States Senate. As appropriate, these understandings
should be incorporated into the ratification process by the
Senate.
X any In Convention
requires a Charge domection
2
Second, a draft document to be issued by President Clinton
that outlines the Administration policy with respect to the
domestic issues that arise with respect to intellectual property
generally, and with respect to the Biodiversity Treaty,
specifically. ATTACHMENT 2.
artich 8(g) - delib,Milere recp dedn L descries
Ordn specior
Jack -) sdy Are a
ATTACHMENT 1
INTERPRETATIVE STATEMENT OF THE UNITED STATES
General Interpretative Statement
The United States hereby declares its understanding of
Articles 1, 15, 16, 19, 20, 21, and 23 of the Convention on
Biological Diversity. In the event that the Conference of
Parties adopts an interpretation contrary to these
understandings, the United States reserves its right to take
appropriate steps to respond, including withdrawal from this
Convention and all its protocols, as provided in Article 38.
Article 1
interpect
The United States declares its understanding that fair and
equitable sharing of the benefits arising out of utilization of
account taberynto
genetic resources requires members of this Convention to respect
the rights of other member countries and of private parties to
the technology that arises out of such utilization of genetic
Thistate regards
resources. The United States further declares its understanding
that the phrase "appropriate transfer of relevant technologies"
under this agreement means that transfers of proprietary
that
technology may only proceed with the voluntary participation of
the owner of the technology.
justy
Article 15
The United States declares its understanding of the meaning
of Article 15 (3) that resources obtained by public or private
entities before or outside of the Convention are not governed by
the Convention.
The United States declares its understanding that the
obligation imposed by paragraph 6 of Article 15 to carry out
research activities on genetic resources with the full
participation of Contracting Parties that provide such resources
in research activities is an obligation that applies only to
Contracting Parties, and not to the private sector within each
Contracting Party.
The United States declares its understanding with respect to
paragraph 7 of Article 15 that any sharing in a fair and
equitable way of the results and benefits arising out of use of a
genetic resource must take fully into account: exclusive rights
to technology that a party obtains through its efforts; and that
transfers of proprietary technology may only proceed with the
voluntary participation of the owner of the technology.
2
Article 16
The United States declares its understanding that access to
and transfer of technology under this agreement subject to
intellectual property rights under the Convention requires the
recognition of, and consistency with, the adequate and effective
protection of intellectual property rights, and thus does not
provide a basis for the use of compulsory licensing laws to
compel private companies to transfer technology under this
agreement.
defense
The United States declares its understanding of paragraph
of Article 16 that the phrase "fair and most favorable terms"
the
means terms that are determined by a free market without trade
restrictions or government coercion.
nation Matar
outop
The United States further declares its understanding of
paragraphs 2 and 3 of Article 16 to be that in the case of
proprietary technology, transfers may only take place on terms
that recognize and are consistent with the adequate and effective
protection of intellectual property rights. In connection with
transfer of technology under this agreement subject to patents
and other intellectual property rights, failure of a member
country to extend such protection, or action by a member country
to limit the exercise of an entity's intellectual property
rights, is considered by the United States as being inconsistent
with this provision of Article 16.
The United States declares its understanding that the
measures encouraged under paragraph 4 of Article 16 does not
permit the violation of "adequate and effective protection of
intellectual property rights" in any transfer of, or access to,
technology under this agreement.
The United States declares its understanding that while the
transfers of technology contemplated under Article 16 will often
be made by the private sector, the obligation to facilitate such
transfers attaches to the Contracting Parties themselves rather
than to entities within the private sector.
The United States declares that Article 16 (5) does not alter
any obligation established in this agreement, and in particular,
the obligation in Article 16, paragraph 2 that any access to, and
transfer of, technology subject to patents and their intellectual
property rights, must be on terms that provide adequate and
effective protection of those intellectual property rights.
Article 19
The United States declares its understanding that paragraphs
1 and 2 of Article 19 impose no obligation on Contracting Parties
3
to coerce private companies to share biotechnological research
with foreign governments or private companies.
The United States declares its understanding that paragraph
3 of Article 19 does not presume the necessity of a protocol on
the procedures for the safe transfer, handling and use of living
modified organisms resulting from biotechnology.
Article 21
The United States declares its understanding that the
periodic decisions of the Conference of the Parties to be taken
under paragraph 1 of Article 21 concerns "the amount of resources
needed" by the financial mechanism, not the extent or nature and
form of the contributions of the Contracting Parties.
Article 23
The United States declares its understanding that the
requirement for consensus on rules of procedure binds the parties
to consensus agreement upon procedures and mechanisms for
implementation of the Convention, including guidance on funding
for the financial mechanism and guidance relating to technology
transfer.
ATTACHMENT 2
STATEMENT OF ADMINISTRATION POSITION ON
THE INTELLECTUAL PROPERTY RELATED PROVISIONS OF
THE CONVENTION ON BIOLOGICAL DIVERSITY¹
The United States believes that the conservation of
biological diversity and the sustainable use of its components
serve important environmental and economic goals. Conservation
of biological diversity will provide numerous benefits, including
new food sources, improved agricultural products and procedures,
new tools for combating disease, and will help maintain the
health of our ecological systems.
The United States believes that one way to support the
conservation of biological diversity and sustainable use of its
components is to create an economic incentive for countries to
preserve the biological diversity within their borders. For this
reason, the United States accepts the principle that benefits
stemming from productive use of genetic resources should flow
back to those nations that act to preserve biological diversity
and provide access to their genetic resources. These benefits
should arise from mutually agreed transfers between contracting
parties or private entities.
The United States also recognizes that the participation of
the private sector greatly enhances the attainment of economic
value from genetic resources. Providing effective incentives for
the development of new technologies that make use of genetic
resources is as critical as assuring the equitable sharing of the
economic benefits that may arise from the use of genetic
resources. However, absent an effective means to protect the
significant investments necessary to develop new technology, the
potential contribution of the private sector to the development
of economically valuable products will not be realized.
For this reason, the United States believes that the
extension of adequate and effective intellectual property
protection for the technology derived from the use of genetic
resources is an essential prerequisite to the success of the
Convention. The United States has also determined that its
current system of laws that provide an effective level of
protection for intellectual property is entirely consistent with
the goals of the technology transfer provisions of the
Convention.
Furthermore, the United States firmly believes that the
provisions of the convention dealing with technology transfer
1
We anticipate that other statements will be made with
respect to the financial mechanism, biosafety, and other parts of
the Convention.
2
require that all parties to the convention must provide adequate
and effective protection of intellectual property rights in any
measures aimed at transfer of or access to technology subject to
patents and other intellectual property rights. The United
States would resist strongly any effort by parties to the
convention to argue to the contrary, and believes that this
position will be upheld in any international forum in which the
issue might be raised. The United States will continue to insist
on adequate and effective protection of intellectual property
rights in negotiations on bilateral and multilateral trade
agreements and will not accept agreements that fail to provide
such protection.
Furthermore, the United States is convinced that the best
means to foster the technology transfer envisioned by the
Convention is for other member countries to provide an effective
level of intellectual property protection. Such protection will
provide the incentives necessary for the private sector to
generate the technology using genetic resources in the first
place. It will also provide the suitable climate necessary for
cooperation between U.S. firms and those in countries harboring
genetic resources. This cooperation can yield tremendous
benefits by fostering not only the voluntary and cooperative
transfer of new technology to developing countries, but by
encouraging the application of this technology to solve
indigenous problems facing those countries.
These private sector mechanisms should be complemented by
public sector initiatives to support technology transfer in order
to meet specific needs or objectives unmet by the private sector.
NGO PARTICIPANTS IN BIODIVERSITY CONVENTION MEETING
with Kathleen McGinty
Deputy Assistant to the President and
Director of the Office of Environmental Policy
February 23, 1993
Merck & Co., Inc.
Isabelle Claxton, Director, Congressional Relations
Dorothy Bowers, Vice President, Corporate
Environmental Affairs
(CEO: P. Roy Vagelos, Chariman,
President & CEO)
Genentech, Inc.
David Beier, Vice President, Government Affairs
(CEO: G. Kirk Raab, President & CEO)
World Wildlife Fund
T.J. Glauthier, Director, Energy & Climate Change
Richard Mott, Treaties Officer
(CEO: Kathryn Fuller, President)
World Resources Institute
Walt Reid, Vice President
(CEO: Jonathan Lash, President)
Environmental and Energy
Gareth Porter, Program Director
Study Institute
(CEO: Ken Murphy, Executive Director)
DEPARTMENT OF THE INTERIOR
TAKE
PRIDE IN
United States Department of the Interior
AMERICA
U.S.
OFFICE OF THE SECRETARY
MARCH
3,
1849
Washington, D.C. 20240
MEMORANDUM
March 17, 1993
TO:
Secretary of Agriculture
Secretary of Commerce
Secretary of Defense
Secretary of Energy
Secretary of State
Secretary of Transportation
Administrator, Environmental Protection Agency
Director, Office of Management & Budget
Director, Office of Science & Technology Policy
Secretary of the Cabinet
President, National Academy of Science
Director, Smithsonian Institution
Director, Office on Environmental Policy
FROM:
Secretary of the Interior
RE:
Creation of the National Biological Survey
I wanted to make you aware of a proposal I am considering in
the Department of the Interior that will improve the caliber of
our biological science. Critical to our mission in the
Department is sound technical and scientific expertise, which
guides our ability to better manage and conserve our precious
natural resources. Currently, eight Interior Bureaus -- the
National Park Service, the Fish & Wildlife Service, the Bureau of
Land Management, the Bureau of Reclamation, the Minerals
Management Service, the Office of Surface Mining, the U.S.
Geological Survey, and the Bureau of Mines -- have biological
research activities. Many of these researchers focus on specific
functions that are essential to the Bureaus' land management
functions and related statutory responsibilities: determining
critical habitat as required under the Endangered Species Act,
evaluating the condition and trends of wildlife and plant
populations, examining the impact of global climate change on the
national parks, and surveying and monitoring the health and
abundance of many of our country's fish stocks. By gathering
this expertise under a National Biological Survey, I will be able
to strengthen these critical functions.
NBS will serve the needs of land and resource managers within all
of the Department's bureaus, for biological research to fulfill
their missions better. NBS will focus on national, regional,
ecosystem and landscape level science needs. It will also help
resource managers acquire and apply scientific tools necessary for
land management decisions at the local level, and provide them with
the best available biological information. NBS will also serve, on
a reimbursable basis, the needs of other federal agencies, state
and local governments, and other entities.
In addition, NBS will undertake a coordinated inventory and
monitoring program to assess the overall status and trends in the
abundance, health, and distribution of plants and animals, as well
as the ecosystems on which they depend. This will include efforts
to identify, in a pro-active fashion, chronic declines of species
and natural habitats. Without a standardized program developed by
an entity such as the NBS, monitoring can be inefficient,
inappropriate, and often unnecessarily expensive. Research results
from this program will enable land and resource managers to adopt
ecosystem-based management strategies to protect potentially
imperilled species at reduced levels of cost and conflict.
NBS will include a National Biological Technical Center to transfer
research results to users, and a network of state units to provide
local research support and technical assistance and information
transfer. To ensure responsiveness to Departmental needs and to
mission-dependent needs of the various bureaus, NBS will be advised
by a science board and a policy board on research needs and
priorities. The policy board will consist of representatives from
each bureau, and the science board will consist of scientists from
other Federal agencies, States, and academia.
NBS will serve as a national source for objective information and
analysis, not for advocacy. By focusing on biological research, NBS
will not supplant the staffs of land management agencies or their
operational biologists who apply ecological information to local
land management decisions (such as the carrying capacity of a
particular rangeland allotment, or the height to which water levels
may be maintained). Not all bureau biologists will be included in
the NBS, but only those having research functions consistent with
the NBS function.
Activities
To accomplish its mission, the National Biological Survey will:
*
Conduct basic and applied research on biological resources,
including plants, fish, wildlife, and ecosystems and their
processes.
Conduct studies to improve the capability for predicting the
effects of natural phenomena and human activities on
ecosystems and biological diversity.
- 2 -
Collect, analyze, and disseminate data and information
concerning the distribution, abundance, health, status and
trends of biological resources and ecosystems.
Develop tools, technologies, protocols, and standards for the
consistent, systematic collection and analysis of data on
ecosystems and their components.
Disseminate data and technologies to resource managers,
scientists, and the public.
Provide scientific and technical assistance in support of
legislative, regulatory, and resource management decisions.
Cooperate in international research activities related to the
management of global biological resources.
Examples of research emphases include:
*
Species biology, such as systematics, taxonomy, physiology and
behavior
Population dynamics, including modeling minimum viable
populations
Ecosystems, habitats, and landscapes
Inventories and monitoring status and trends
Technology transfer and technical assistance
Budget
The NBS will consist of a core of research from existing activities
within Interior bureaus, augmented by new initiatives. The
functions to be transferred include research on biological systems
and their components. In addition to research, the National
Biological Survey will provide the basis for nationwide assessment
of the status and trends of living resources and their habitats.
Many bureaus conduct inventories ranging from nationwide surveys,
such as Gap Analysis and the National Wetlands Inventory, to site-
specific surveys for Refuge, Park, or land management decisions.
NBS will assume the Departmental biological diversity and
monitoring programs that focus on: national and regional
inventories; inventories and monitoring resources of national
significance (such as the spotted owl or other endangered species
inventories) ; local inventory efforts that can have regional or
national consequences (such as to improve offshore oil and gas
leasing activities) ; and the development of standards and protocols
for conducting inventories and monitoring programs.
NBS will emphasize the transfer of information to and support for
operational units. For this reason, the Survey will include
components of bureaus involved in or directed toward technology
transfer where consolidation of those components can lead to better
- 3 -
technical assistance and support for Operations.
Benefits
By consolidating existing fragments of biological research within
the Department into an independent, non-advocate science bureau,
the National Biological Survey can produce numerous benefits.
Among these are:
*
Improved research quality and productivity, at a lesser cost.
*
Economies of scale, and consistent standards and protocols not
now existing among the many bureau research programs.
A net increase in research capability available to individual
clients.
*
An expanded commitment to technology transfer and support,
including providing analytical support, modeling, and
Geographic Information System assistance to clients.
*
Research that will enable resource managers to be proactive,
to design ecosystem management strategies, and to anticipate
resource management needs rather than responding to "train
wrecks."
*
Improved interagency coordination and strengthened cooperative
relationships.
*
A reduction in competition for resources within bureaus.
- 4 -
ATTACHMENT B
Global Marine Biological Diversity Strategy
Page 164
VIC5 MILITARY USE AND IMMUNITY FROM PUBLIC SCRUTINY
Despite increasing global awareness about the health of coastal and marine ecosystems,
there is little available information about the effects of military activities on the sea.
Military bases and weapons-producing facilities along coasts and in drainage basins generate
large amounts of wastes, including some that are very hazardous, that can enter the sea
accidentally or by design. The military has dumped everything from shipboard garbage to
barrels of nerve gas and unexploded bombs into the sea, and the USA (Davis and VanDyke
1990) and Russia have viewed the sea as the logical place to sink decommissioned nuclear
submarines or high-level nuclear wastes from the military. The former USSR used the
Arctic island of Novaya Zemlya and the USA, Great Britain, and France have used Pacific
atolls for testing nuclear weapons. Many countries use islands as naval bombing and
shelling targets. Wars have littered some marine areas with ordinance and sunken vessels
that can leak fuel for decades. And 1991 saw the first use of a new military tactic: the
intentional release of some six million barrels of crude oil into the Persian/Arabian Gulf by
Iraq.
It is difficult to gauge the magnitude of harm from these and other activities that have not
yet come to light. Most have been exempt from environmental regulatory controls by law
or common practice. Even nations with generally good environmental records tend to look
the other way when actions are carried out under the cloak of "national security."
There are also less obvious effects of military activities, both negative and positive. One
of the negative ones is the introduction of alien species. Wars create novel shipping
corridors that are distinct from historical trade routes, or impose upon older routes much
higher levels of transport activity. Not surprisingly, a large number of marine organisms
are thought to have been newly introduced co-incidental to world wars. The Australian
barnacle Elminius modestus appeared in England during World War II (Elton 1958). Two
species of Philippine jellyfishes (Cuttress 1961) were carried to Hawaii (USA) during World
War II. The Korean-Japanese shrimp Palaemon macrodactylus appeared in San Francisco
Bay (USA) shortly after the Korean War (Newman 1963), and many more western and
southwestern Pacific invertebrates appeared in California (USA) harbors during the Vietnam
War (Carlton 1979).
"Normal" military activity can transport species as well. Noting the arrival of the
rapacious blue crab (Callinectes sapidus) near Yokohama Naval Base (Japan), Sakai (1976)
suggested that it might have come in the ballast tanks of submarines returning from the east
coast of the USA.
On the other hand, military bases and target ranges are commonly closed to the public
and therefore suffer far less disturbance than readily accessible areas. Areas up to many
thousands of square kilometers where submarine detection devices or explosives sit on the
seabed are usually closed to bottom trawling, thus providing refuge for demersal fishes and
benthic communities. As a result, intertidal and sub-tidal areas of military reservations can
Global Marine Biological Diversity Strategy Sixth Draft, December 23, 1992
Page 165
be far richer biologically than adjacent areas that endure commercial, subsistence, and sport
collecting. Seabirds on many islands worldwide owe their nesting success to the bombs and
shells that occasionally fall in their midst; the explosions, deadly as they and their chemical
residues are, are far less disturbing than human visits.
Furthermore, commercial whaling in the Antarctic essentially ceased when whaling ships
were diverted to military use during World War II, giving the great whales a brief respite
before the killing resumed (Figure VI-1).
In addition, many of the most expensive research projects, including oceanographic
studies of currents, mapping of undersea topography, and studies in the Arctic and
Antarctic, would never have happened without the military's need for information during
the Cold War. It is unfortunate that nations could justify these projects only under a
military definition of national security, rather than for their contribution to management of
marine resources, but the fact remains that research carried out or funded by the military
has generated information of considerable importance to our understanding of life in the
sea.
Increasing concern about marine pollution has increased pressure for military
accountability (Davis 1990). Ideally, this could lead to diminished harm from military
activities, while retaining the very real benefit of providing refuge from human predation.
Carlton, James T. (1979). History, biogeography, and ecology of the introduced marine
and estuarine invertebrates of the Pacific coast of North America. Ph.D. dissertation,
Ecology, University of California, Davis, California (USA).
Cuttress, C.E. (1961). Introduced jellyfish in Hawaii, in M.S. Doty, Acanthophora, a
possible invader of the marine flora of Hawaii. Pacific Science 15:547-552.
Davis, W.J. (1990). Global aspects of marine pollution policy: The need for a new
international convention. Marine Policy 14(3):191-197.
Davis, W.J., and J.M. VanDyke (1990). Dumping of decommissioned nuclear submarines
at sea: A technical and legal analysis. Marine Policy 14(6):467-476.
Elton, Charles S. (1958). The Ecology of Invasions by Animals and Plants. Metheun,
London (UK).
Newman, W. (1963). On the introduction of an edible Oriental shrimp (Caridea,
Palaemonidae) to San Francisco Bay. Crustaceana 5:119-132.
Sakai, T. (1976). Notes from the carcinological fauna of Japan (IV). Researches on
Crustacea 7:29-40.
Cob Katie. - -
4-14
WWF
Here's a
copy of The letter
we're sending to
The Vice President
today. The letter
to The President
will go tomorrow.
Copies are
only being sent
to you and
Eiteen.
Td
-
April 14, 1993
The Honorable Albert Gore, Jr.
Vice President of The United States
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. Vice President:
Enclosed you will find a copy of a letter that we are sending to the President, urging
him to sign the Convention on Biological Diversity; and to do so in a way that clearly
indicates our country's commitment to protecting both intellectual property rights and the
world's wealth of biodiversity.
As the chief executive officers of six corporations and environmental and policy
research organizations with interests in biodiversity and biotechnology, we believe it is in the
shared interests of the nation and the world community for the United States to join in
signing this treaty and, further, to assume a leadership position in its future implementation.
We have undertaken our efforts in this area with the encouragement of your staff,
Mr. Vice President. We have kept them informed throughout, and have shared the
interpretative statement with them recently, in the hopes that it would facilitate discussions
within the government. We are happy to assist further in whatever ways may be helpful.
Sincerely,
Roy Ugela
Kathryn S. Fuller
P. Roy Vagelos
Kathryn S. Fuller
Chairman and Chief Executive Officer
President
Merck & Co., Inc.
World Wildlife Fund
yhicham G. Raab
Smather Jonathan President Lash 2ar
President & CEO
Genentech, Inc.
World Resources Institute
Ken Kgly Murphy
Lisa Conte
Chief Executive Officer
Executive Director
Shaman Pharmaceuticals
Environmental and Energy Study Institute
April 15, 1993
The Honorable William J. Clinton
President of The United States
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President:
As the chief executive officers of six corporations and environmental and policy
research organizations with interests in biodiversity and biotechnology, we believe that the
protection of biodiversity serves the shared interests of our nation and the world community.
We endorse global efforts to create economic incentives to preserve biodiversity and the
sustainable use of genetic resources. It is also our belief that strong private property rights
can and should facilitate these efforts.
Based on these shared values and objectives, we urge you to sign the Convention
on Biological Diversity, and to do so in a way that clearly indicates our country's
commitment to protecting both intellectual property rights and the world's wealth of
biodiversity. This Convention establishes for the first time an international framework for
economic incentives for biodiversity conservation and calls for the protection of intellectual
property rights in any technology transfer under the agreement.
As in any international agreement, some other parties to the Convention may
suggest alternative interpretations of certain provisions. Both the U.S. government and
industry were especially concerned that such efforts would weaken the Convention's
protection of intellectual property rights. This was the chief concern that prevented our
signature in Rio.
In order to address this, in late December with the encouragement of the Vice
President-elect's staff, our organizations formed a small working group, bringing together
corporate and NGO perspectives. We examined in detail primarily the issues pertaining to
intellectual property rights and technology transfer, which we felt were the major U.S.
concerns with the treaty. We dealt with other key issues as well, but in less depth, and did
not attempt to cover every possible interpretative issue that the U.S. might have with the
treaty. Specifically, we did not assess problems, if any, under Article 22 on the
Convention's relationship to other international agreements, or Article 27 on dispute
resolution. We concluded from our review that the U.S. could sign the Convention while
protecting intellectual property rights.
Our working group developed an interpretative statement that could serve as the
basis for a U.S. interpretation of key provisions of the Convention, and a draft policy
statement that could accompany such a statement that further details policy on key issues,
especially the protection of intellectual property rights and technology transfer. We offer
both drafts for use by your Administration in its work on this issue. Copies of both have
been shared with your staff and are attached. A copy of this letter and attachments is also
being sent to the Vice President and his staff.
The Honorable William J. Clinton
April 15, 1993
Page 2
We believe that depositing an interpretative statement such as this with the United
Nations at the time of our signature of the Convention, would resolve the major substantive
concerns. We believe there is minimal risk of adverse interpretations by the Conference of
the Parties on the issues arising out of the Convention, especially those involving
intellectual property. Moreover, as our draft interpretative statement notes, in the event that
the Conference of the Parties does adopt a contrary interpretation, the U.S. could take any
appropriate steps to respond, including in extreme cases, withdrawal from the Convention.
The proposed interpretative statement should, in our view, also be made a part of the
Senate ratification process.
We are working with our colleagues in the corporate and NGO communities to help
broaden the understanding of this issue and to strengthen support for this course of action.
It is in the interest of both the conservation community and industry for America to assume
a leadership position on this issue. As a member of the Conference of Parties, the United
States will be accorded a seat at the table for all future discussions on implementation and
subsequent amendments or protocols.
We hope that the consensus reached in our working group will promote a wider
recognition of the inherent value of the Biodiversity Convention. We offer you whatever
additional assistance is needed to resolve any outstanding substantive concerns and assure
ratification.
Sincerely,
Reg Vagets
Katumn S. Fuller
P. Roy Vagelos
Kathryn S. Fuller
Chairman and Chief Executive Officer
President
Merck & Co., Inc.
World Wildlife Fund
G. Raab
Jpnathan Lash
President & CEO
President
Genentech, Inc.
World Resources Institute
Les a Cante
Ken Kgly Murphy
Lisa Conte
Chief Executive Officer
Executive Director
Shaman Pharmaceuticals
Environmental and Energy Study Institute
ATTACHMENT 1
INTERPRETATIVE STATEMENT OF THE UNITED STATES
General Interpretative Statement
The United States hereby declares its understanding of
Articles 1, 15, 16, 19, 20, 21, and 23 of the Convention on
Biological Diversity. In the event that the Conference of
Parties adopts an interpretation contrary to these
understandings, the United States reserves its right to take
appropriate steps to respond, including withdrawal from this
Convention and all its protocols, as provided in Article 38.
Article 1
The United States declares its understanding that fair and
equitable sharing of the benefits arising out of utilization of
genetic resources requires members of this Convention to respect
the rights of other member countries and of private parties to
the technology that arises out of such utilization of genetic
resources. The United States further declares its understanding
that the phrase "appropriate transfer of relevant technologies"
under this agreement means that transfers of proprietary
technology may only proceed with the voluntary participation of
the owner of the technology.
Article 15
The United States declares its understanding of the meaning
of Article 15 (3) that resources obtained by public or private
entities before or outside of the Convention are not governed by
the Convention.
The United States declares its understanding that the
obligation imposed by paragraph 6 of Article 15 to carry out
research activities on genetic resources with the full
participation of Contracting Parties that provide such resources
in research activities is an obligation that applies only to
Contracting Parties, and not to the private sector within each
Contracting Party.
The United States declares its understanding with respect to
paragraph 7 of Article 15 that any sharing in a fair and
equitable way of the results and benefits arising out of use of a
genetic resource must take fully into account: exclusive rights
to technology that a party obtains through its efforts; and that
transfers of proprietary technology may only proceed with the
voluntary participation of the owner of the technology.
2
Article 16
The United States declares its understanding that access to
and transfer of technology under this agreement subject to
intellectual property rights under the Convention requires the
recognition of, and consistency with, the adequate and effective
protection of intellectual property rights, and thus does not
provide a basis for the use of compulsory licensing laws to
compel private companies to transfer technology under this
agreement.
The United States declares its understanding of paragraph 2
of Article 16 that the phrase "fair and most favorable terms"
means terms that are determined by a free market without trade
restrictions or government coercion.
The United States further declares its understanding of
paragraphs 2 and 3 of Article 16 to be that in the case of
proprietary technology, transfers may only take place on terms
that recognize and are consistent with the adequate and effective
protection of intellectual property rights. In connection with
transfer of technology under this agreement subject to patents
and other intellectual property rights, failure of a member
country to extend such protection, or action by a member country
to limit the exercise of an entity's intellectual property
rights, is considered by the United States as being inconsistent
with this provision of Article 16.
The United States declares its understanding that the
measures encouraged under paragraph 4 of Article 16 does not
permit the violation of "adequate and effective protection of
intellectual property rights" in any transfer of, or access to,
technology under this agreement.
The United States declares its understanding that while the
transfers of technology contemplated under Article 16 will often
be made by the private sector, the obligation to facilitate such
transfers attaches to the Contracting Parties themselves rather
than to entities within the private sector.
The United States declares that Article 16 (5) does not alter
any obligation established in this agreement, and in particular,
the obligation in Article 16, paragraph 2 that any access to, and
transfer of, technology subject to patents and their intellectual
property rights, must be on terms that provide adequate and
effective protection of those intellectual property rights.
Article 19
The United States declares its understanding that paragraphs
1 and 2 of Article 19 impose no obligation on Contracting Parties
3
to coerce private companies to share biotechnological research
with foreign governments or private companies.
The United States declares its understanding that paragraph
3 of Article 19 does not presume the necessity of a protocol on
the procedures for the safe transfer, handling and use of living
modified organisms resulting from biotechnology.
Article 21
The United States declares its understanding that the
periodic decisions of the Conference of the Parties to be taken
under paragraph 1 of Article 21 concerns "the amount of resources
needed" by the financial mechanism, not the extent or nature and
form of the contributions of the Contracting Parties.
Article 23
The United States declares its understanding that the
requirement for consensus on rules of procedure binds the parties
to consensus agreement upon procedures and mechanisms for
implementation of the Convention, including guidance on funding
for the financial mechanism and guidance relating to technology
transfer.
ATTACHMENT 2
STATEMENT OF ADMINISTRATION POSITION ON
THE INTELLECTUAL PROPERTY RELATED PROVISIONS OF
THE CONVENTION ON BIOLOGICAL DIVERSITY¹
The United States believes that the conservation of
biological diversity and the sustainable use of its components
serve important environmental and economic goals. Conservation
of biological diversity will provide numerous benefits, including
new food sources, improved agricultural products and procedures,
new tools for combating disease, and will help maintain the
health of our ecological systems.
The United States believes that one way to support the
conservation of biological diversity and sustainable use of its
components is to create an economic incentive for countries to
preserve the biological diversity within their borders. For this
reason, the United States accepts the principle that benefits
stemming from productive use of genetic resources should flow
back to those nations that act to preserve biological diversity
and provide access to their genetic resources. These benefits
should arise from mutually agreed transfers between contracting
parties or private entities.
The United States also recognizes that the participation of
the private sector greatly enhances the attainment of economic
value from genetic resources. Providing effective incentives for
the development of new technologies that make use of genetic
resources is as critical as assuring the equitable sharing of the
economic benefits that may arise from the use of genetic
resources. However, absent an effective means to protect the
significant investments necessary to develop new technology, the
potential contribution of the private sector to the development
of economically valuable products will not be realized.
For this reason, the United States believes that the
extension of adequate and effective intellectual property
protection for the technology derived from the use of genetic
resources is an essential prerequisite to the success of the
Convention. The United States has also determined that its
current system of laws that provide an effective level of
protection for intellectual property is entirely consistent with
the goals of the technology transfer provisions of the
Convention.
Furthermore, the United States firmly believes that the
provisions of the convention dealing with technology transfer
1
We anticipate that other statements will be made with
respect to the financial mechanism, biosafety, and other parts of
the Convention.
2
require that all parties to the convention must provide adequate
and effective protection of intellectual property rights in any
measures aimed at transfer of or access to technology subject to
patents and other intellectual property rights. The United
States would resist strongly any effort by parties to the
convention to argue to the contrary, and believes that this
position will be upheld in any international forum in which the
issue might be raised. The United States will continue to insist
on adequate and effective protection of intellectual property
rights in negotiations on bilateral and multilateral trade
agreements and will not accept agreements that fail to provide
such protection.
Furthermore, the United States is convinced that the best
means to foster the technology transfer envisioned by the
Convention is for other member countries to provide an effective
level of intellectual property protection. Such protection will
provide the incentives necessary for the private sector to
generate the technology using genetic resources in the first
place. It will also provide the suitable climate necessary for
cooperation between U.S. firms and those in countries harboring
genetic resources. This cooperation can yield tremendous
benefits by fostering not only the voluntary and cooperative
transfer of new technology to developing countries, but by
encouraging the application of this technology to solve
indigenous problems facing those countries.
These private sector mechanisms should be complemented by
public sector initiatives to support technology transfer in order
to meet specific needs or objectives unmet by the private sector.
Lastly, the United States recognizes the value of knowledge
held by indigenous peoples, of their plant and animal resources.
File: Furest Conf.
Larry Masun
MTGS
Mtg: 3-00 pm, 4/21
A LANDSCAPE APPROACH
Achieving and Maintaining
Biodiversity and
Economic Productivity
By Chadwick Dearing Oliver
Piecemeal attempts to resolve the var-
vidually is an impossible task. However.
stands to the landscape scale.
ious pressures facing Pacific Northwest
biodiversity can be promoted by main-
Forests periodically experience both
forests have been frustrating and often
taining the habitats-forest structures-
large and small natural disturbances
counterproductive. As an alternative ap-
in which the various species are found
(White 1979) that destroy less than an
proach, this article offers a long-term
(Oliver, in press).
acre to hundreds of thousands of acres at
goal for the region's forests, then sug-
Historically, natural forest communi-
a time. Then a new forest regrows
gests specific policies that can encourage
ties were thought to exist in a benign
through a succession of structures (fig.
a shift toward that goal.
steady state, sometimes associated with
IA). During the stand-initiation stage. re-
The most general aim for managing
climax, old-growth, or ancient forests.
generation is established in the area
Washington's forests is to promote hu-
Disturbances were considered unnatural,
opened by the disturbance. As seedlings
man and environmental wellbeing. Spe-
and the steady-state forest was assumed
and saplings grow, a dense canopy devel-
cific objectives include maintaining
to be most conducive to stability and di-
ops and prevents further regeneration.
biodiversity, fostering global environ-
versity. Thus, preserving all species
The stem-exclusion stage continues until
mental conservation, and promoting the
meant maintaining the forest in a natural,
the trees get larger, natural thinning oc-
economic productivity of residents and
old condition-with human intervention
curs. and the main canopy develops open-
landowners.
especially avoided.
ings. Understory trees. shrubs, and herba-
Much recent environmental attention
ceous plants are established during the
Maintaining Structural Diversity
has been misdirected at stand-level for-
understory-reinitiation stage. Eventually.
Biodiversity (biological diversity) de-
estry operations, as if an ideal stand struc-
large trees in the overstory die. younger
scribes the variations in life forms, ge-
ture or silvicultural system would solve
trees in the lower canopy layers are re-
netic makeup, biological processes, and
all environmental concerns. The solution
leased, and the stand develops into the
ecological niches that occur in any spe-
actually lies at the landscape level-
old-growth stage-an uneven-aged struc-
cific area. Regional and global biodiver-
where the appropriate, dynamic balance
ture with an irregular canopy (Oliver and
sity has been declining (Wilson and Pe-
of stands in diverse structures and pat-
Larson 1990). Recognizing these differ-
ters 1988); attempting to reverse the trend
terns can maintain habitats for a diversity
ent structures is useful because they di-
is of both moral and practical concern.
of plants and animals. Silvicultural edu-
rectly define the habitats on which animal
Maintaining stable populations of all spe-
cation, research, and practices need to
and plant species depend.
cies by managing for each species indi-
move beyond management of individual
Each structure is suitable for some
20 JOURNAL OF FORESTRY
plants and animals and not others (fig.
proposed for the Olympic Experimental
1991. Oliver et al. 1992, Salwasser et al.
IB). Before human populations in-
State Forest (Washington State Depart-
1992). Management at both the stand and
creased. forests of different structures
ment of Natural Resources 1990). Wild-
landscape levels would control the size
were somewhat randomly distributed
life. plant, and fish ecologists would pre-
and impact of insect. disease, wind, and
across the landscape. Certain plant and
scribe target stand sizes, spatial con-
fire events and would provide replace-
animal populations increased dramati-
cally as large areas with the same struc-
ture were created by large disturbances
(Oliver and Larson 1990). As the struc-
ture changed. other plants and animals
were favored and many older populations
declined-through migration, death, or
dormancy. Many forests have always
gone through large disturbances, creating
continuous population "booms" and
"busts" in specific areas: however, over a
large region unpopulated by humans,
plant and animal populations were main-
Stand-initiation
Stem-exclusion
Understory-reinitiation
Old-growth
tained as somewhat random disturbances
A. Changes in stand structure following disturbance.
Figure 1. Simplified view of changes in
Stand-Initiation
Stem-exclusion
Understory-reinitiation
Old-growth
forest structure following disturbance,
with attendant species use and ownership
B. Mammal species use by structure.
distribution (from Oliver and Larson 1990).
kept large or small areas in each structure.
Because of human pressures, the
4
present forest does not necessarily have
the same balance of stand structures as
3
the larger, naturally forested area did.
Two approaches can maintain a diversity
Millions of acres
2
of stand structures. One is to exclude hu-
man disturbances, as is done in national
1
parks and similar preserves. However, as
these forests become older, it is increas-
ingly difficult to allow small or moder-
0
Stand-initiation
Stem-exclusion
Understory-reinitiation
Old-growth
ately sized natural disturbances but pre-
vent those of catastrophic proportions.
National Forest
Other Public
Forest Industry
Managers resort to costly programs of
Other Private
Nonharvestable
protection from natural catastrophes.
which may or may not maintain a diver-
C. Area of western Washington by structure and ownership.
sity of structures and species.
The second approach is to use silvi-
straints, and proportions of each struc-
ment stands if desired structures were de-
cultural operations to maintain a target
tural stage in concert with natural condi-
stroyed by uncontrollable disturbances.
distribution of structures across the land-
tions. Stand structures would be con-
At times, large stands of several hun-
scape in a dynamic balance. Landscape
trolled across the landscape by thinning,
dred acres may need to be managed as a
units would be delineated, such as the
harvesting, snag creation, and other oper-
single structure, so that adjacent stands
6,000- to 15,000-acre drainage subbasins
ations (Boyce 1985, O'Hara and Oliver
are not destroyed by winds and adjacent
SEPTEMBER 1992 21
Chadwick Dearing Oliver
Chadwick Dearing Oliver
Clearcuts produce the stand-initiation structure, which is home to many plant
A 35-year-old Douglas-fir/western hemlock stand in the stem-exclusion stage;
and animal species. However, past extensive clearcutting has reduced diversity
this structure predominates in western Washington. Unless thinned, it will pro-
of habitats and species in many landscape units.
duce little valuable timber or wildlife habitat for many decades.
streams are not washed out by continuous
press). Few places in the world have the
quires much higher energy (Koch 1991;
small harvest areas. Large blocks of a sin-
ability of the Pacific Northwest to grow
Kershaw et al., in press).
gle structure favor some species; small
native tree species of high value for tim-
Wood products are especially effec-
stands may be more appropriate in other
ber, paper, and other uses.
tive and valuable substitutes for nonwood
areas. The best scientific and professional
Carbon dioxide and other air pollut-
construction material when they are
judgments will set such targets, which
ants are increasing at an alarming rate-
grown to large sizes and free of knots
may change as better scientific informa-
caused overwhelmingly by burning fossil
(Kellogg and Kennedy 1986). Growing
tion becomes available.
fuels (Stuiver 1978). Efforts to limit CO₂
such timber requires thinning and prun-
by growing more forests and preserving
ing in the stem-exclusion stage. For ex-
Environmental Protection
old-growth will be insignificant unless
ample, if 20- to 30-year-old Douglas-fir
Reduced forest product outputs from
fossil fuel consumption is reduced. Sub-
stands in western Washington are thinned
the Pacific Northwest will increase pres-
stitution of wood products for aluminum,
and pruned they can produce high-quality
sure to harvest forests elsewhere in the
steel, cement, plastics, and other materi-
timber by age 60 (Fight et al. 1987. Oliver
world (often old-growth or exotic spe-
als dramatically reduces fossil fuel con-
1991). Thinning also allows creation of
cies) and to substitute other products for
sumption and atmospheric pollution,
snags and fosters rapid understory reiniti-
wood (Perez-Garcia 1991; Lippke, in
since manufacturing these alternatives re-
ation (fig. 1A. Oliver et al. 1991).
There will always be low-quality
wood-from thinnings and from tops of
pruned trees. Its use in fiber mills and for
fuel will be a necessary part of the re-
1.4
Opportunity to
gion's product mix. However, rather than
1.2
having all timber go to this purpose, con-
Millions of acres
1
Thin & Prune
centration on large. knot-free timber for
0.8
high-quality structural and esthetic uses
0.6
will provide an environmentally and eco-
nomically viable substitute for more pol-
0.4
luting products.
0.2
0
A Stable Economy
0-9 10-19 20-2930-3940-4950-5960-6970-7980-8990-99 >100
Rural economic health depends on
Age classes
residents earning money by producing
goods or services of value from the for-
National Forest
Other Public
est. Prosperous rural communities coun-
Forest Industry
Other Private
teract the global trend of migration to cit-
ies and avert rural subsistence lifestyles
Figure 2. Distribution of forested area for 1989 in western Washington by age class and ownership.
that reduce biodiversity. They also pro-
Stands less than 100 years are generally postharvest stands. Stands less than 30 years are generally
vide a steady labor force for managing
plantations (Maclean et al. 1991a, b, c).
forests for wood products, for biodiver-
22
JOURNAL OF FORESTRY
Markian Petruncio
Chadwick Dearing Oliver
Carefully planned thinning can remove wood for low-value products, create em-
Repeated commercial thinning of this even-aged stand supplied pulp and saw-
ployment, provide high-value wood in the future, and create understory-reiniti-
timber operations and rapidly created such old-growth features as large tree
ation features many decades sooner than without such activity.
sizes, deep crowns, many canopy layers, and multiple wildlife species.
sity, and for avoiding and mitigating
Washington's Forests Now
tain the same volume as fewer acres of old
damage from natural disturbances.
The forests of western and eastern
stands. Trees from young or unthinned
Maintaining all structures across a
Washington have different stand structure
stands are small and of low quality. Pro-
landscape provides consistent employ-
and landscape patterns because of vary-
cessing mills that use low-quality trees to
ment in silvicultural operations and in
ing ownerships, cutting and natural dis-
produce fiber and reconstituted forest
the use, manufacture. and remanufacture
turbance regimes, climate, and species
products will most likely survive if the
of forest products. Maintaining all struc-
composition. Washington's forests are
present trend continues.
tures within a relatively small area sus-
currently moving in two directions. As
Western Washington's forests already
tains a constant labor force and supply of
more national forests and other forest ar-
contain an overabundance of stands in the
forest products in each region. rather
eas are excluded from management to
stem-exclusion structure (fig. IC), and
than the historical boom and bust when
preserve the spotted owl, the remaining
stands of different ages are not regularly
large regions were harvested in a short
forests are being harvested more heavily.
distributed across the landscape or eleva-
time.
Where all harvesting is curtailed, ar-
tion zone (fig. 2). The national forests
Retaining diverse stand structures
eas with stand-initiation structures will
contain predominantly older stands in the
across the landscape also provides a sus-
soon grow to the stem-exclusion stage.
understory-reinitiation and old-growth
tained supply of various forest values—
This will cause a shortage of open habi-
structures, while large areas under state
low-quality timber products from thin-
tat, which will reduce the area's biodiver-
and private ownership contain only
nings. high-quality timber from harvest-
sity and threaten other species. Protecting
stands in the younger stages. This distri-
ing previously thinned forests (which si-
these unmanaged areas against natural
bution partly explains why most spotted
multaneously produce habitat in the
disturbances will be very costly without
owls are on national forest lands.
stand-initiation stage before trees re-
timber harvest income to offset costs.
Most stands less than 30 years old in
grow). and other forest values such as
When natural disturbances do occur they
western Washington-a large proportion
recreation, mushrooms, scenery, floral
will probably be quite extensive, since
of the forests-began as plantations. Un-
greens, and berries (Oliver, in press).
large areas will be in the same susceptible
less they are thinned and pruned, they
Nontimber commodities will probably
structures; the result will be creation of
may not grow to large diameters or pro-
never provide as much revenue as timber;
large stand-initiation areas.
duce clear wood outside the juvenile core
however, they can make silvicultural
Lack of available timber from mature
for high-quality products (Barrett and
thinning and pruning more economically
forests in preserved areas (especially na-
Kellogg 1986, Fahey et al. 1991). With
attractive as well as increase employment
tional forests) is causing increased har-
thinning, the stands will rapidly form an
diversity.
vest on other areas (especially private
understory-reinitiation structure and can
A key component in maintaining a sta-
lands). Harvesting too rapidly will cause a
grow to large diameters, creating habitat
ble rural economy is encouraging sec-
shortage of timber, and the number of
characteristics beneficial to many spe-
ondary manufacture (in the forested re-
mills (and rural employment) will de-
cies. If pruned as well, the trees will form
gion) of high-quality conventional
crease. Harvesting forests at younger ages
very high quality timber (Cahill et al.
products from previously thinned stands,
may temporarily keep mills open; how-
1986, Oliver 1991).
as well as aggressive efforts to create and
ever, the effect is to "eat the seed corn,"
Most eastern Washington forests are
market new products-such as wood
since the volume in young stands is small
in either stem-exclusion or old-growth
beams to replace aging bridges.
and more acres need to be harvested to ob-
structures, with a shortage of stand-initi-
SEPTEMBER 1992 23
ation structures. The large amount of old-
Export restrictions on state and federal
Other landowners need a flow of wood
growth structures-largely caused by ex-
lands reduce the cash available for prun-
to their mills. Harvesting some timber on
cluding fire and relying on selective log-
ing and other silvicultural operations that
national forests to create a balance of
ging-partly accounts for the relative
would increase future wood quality.
stand structures could provide some tim-
abundance of spotted owls in the eastern
value. and biodiversity. In addition, pri-
ber supply. Subsidies could help mills re-
Cascades. Without active management.
vate owners lack the cash flow to invest in
tool to produce high-quality and high-
however. many eastern Washington
thinning and pruning operations that
value products, which may allow them to
stands will be destroyed by insects or
would increase future benefits.
purchase high-quality logs from private
wildfires within the next few decades be-
The shrinking timber supply is raising
lands that would otherwise be exported.
cause of their structures. The resulting
stumpage prices and causing some log-
Regulations. Regulations may be
forest will contain large stand-initiation
gers and mills to process logs rapidly
needed to channel incentives. Taken sep-
areas but a shortage of other habitats, in-
while they are able to, even though it fur-
arately, regulations may be viewed as ad-
cluding those needed by the spotted owl
ther reduces supplies. Industries that use
ditional costs that reduce management
(Oliver et al. 1991).
high-quality logs are threatened by a cur-
and outputs; however, in concert with in-
rent and future lack of supply. Many
centives, they should focus efforts toward
Existing Infrastructure
older stands with high-quality timber,
the region's strategic goals.
Because of the region's logging and
which could sustain these mills until the
Regulations could set target condi-
natural disturbance history, most forested
thinned and pruned timber matures, may
tions in terms of landscape patterns. stand
landscape units contain stands of approx-
be kept from harvest by spotted owl con-
structures. and operational constraints
imately the same age. They will become
servation plans.
(Oliver et al. 1992). To minimize ineffi-
economically mature at the same time
There are few incentives-and many
cient central planning. legislation would
and may all be harvested within a short
disincentives-to promote forest values
set goals and limits while managers could
time-again creating large areas that will
such as wildlife habitat, fisheries. recre-
determine the means of achieving the
simultaneously grow through the same
ation, and minor forest products, since
goals within given constraints. Owners
structures with little biodiversity.
landowners generally do not realize ben-
who actively manage lands to create these
Incentives or regulations for managing
efits from these values.
values would be protected from lawsuits
stands for a balance of structures across a
and should be given incentives to provide
landscape are minimal, although steps
Achieving the Goal
nonmarket values. Several owners of a
have been taken (e.g., the Timber-Fish-
Systems need to be developed that
landscape unit could share the different
Wildlife Agreement, Sustainable Forestry
would plan and manage silvicultural op-
structures to be maintained (as road net-
Roundtable, recent state forest practice
erations to maintain a target balance of
works are shared). or they could buy and
rules). The infrastructure, management
stand structures across a landscape.
sell responsibility for different structures
tools. and training necessary for imple-
Creative incentives, regulations, and ap-
just as air pollution "quotas" are bought
menting silvicultural operations are
proaches are needed to make a transition
and sold on the Chicago Exchange.
highly developed for some operations but
from the current direction to the goal of
National forest harvests. The volume-
not others.
managing for a variety of structures
based sustained-yield goal on national
Regenerating harvested stands has
across the landscape for biodiversity,
forests may need to be changed to manag-
been very successful and is mandated by
high-quality timber, and rural community
ing for a balance of stand structures
the Washington State Forest Practices
productivity.
across each landscape area (similar to
Act. However, ambivalence among forest
Incentives. Private landowners must
area regulation). Timber harvesting
managers and a marginal. fluctuating
be able to benefit from providing wildlife
would be the result of maintaining the
value for the wood removed in thinning
diversity and other public values. Some
stand structures. rather than an indepen-
has caused an unstable market infrastruc-
landowners are harvesting stands prema-
dent goal. Other adjustments will be
ture of thinning machinery. operators, and
turely, either for cash flow or from fear of
needed to manage for biodiversity-such
markets. Fear that thinnings may attract
increased regulations. Immature stands
as allowing below-cost timber sales for
spotted owls to a stand-which could
could be made more financially liquid by
needed thinnings or roads. and broader
then disallow further harvest-discour-
creating bonds for the future value of the
use of timber stand improvement funds.
ages these operations. Fear of more regu-
stand, which can then be sold and traded
Infrastructures. Various infrastruc-
lations is causing some owners to sell
like agricultural futures. Other landown-
tures will be needed to encourage thin-
their timberland, and large areas of newly
ers find managing for high-quality prod-
ning and pruning; manufacturing and
purchased timberland are being clearcut
ucts and biodiversity to be economically
remanufacturing high-quality timber
to repay the purchasing loan-causing a
marginal. Since thinning and pruning
products; trading in "timber futures";
further imbalance in stand structures.
conserve fossil fuels and help the envi-
trading stand structures among landown-
Prunings are generally considered mar-
ronment, subsidies of these activities by
ers within a landscape unit: developing
ginal economic investments; the total cost
power plants (and others) could be en-
technologically modern and efficient
is borne by the landowner in anticipation
couraged to sequester biotic carbon and
tools (computer models. geographic in-
of returns from high-quality timber when
offset fossil fuel emissions. Tax deferrals
formation systems) for landscape man-
the stands are harvested many years later.
and other adjustments could also help.
agement: and promoting other forest val-
24
JOURNAL OF FORESTRY
ues such as recreation. mushroom-
CAHILL... J.M., T.A SNELLGROVE and T.D. FAHEY.
ously managed forests in western and eastern
gathering. floral greenery collection. and
1986. The case for pruning young-grow stands
Washington with and without further manage-
fish production.
of Douglas-fir. In Douglas-fir: stand manage-
ment. Unpubl. rep to J. Tappeiner. Silviculture
ment for the future. C.D. Oliver. D.P. Hanley.
Subcommittee. Spotted Owl Recovery Team.
and J.A. Johnson, eds., P 123-31. Univ Wash..
USDI Fish & Wildl. Serv., December 9. 72 p.
Making the Transition
Seattle. Inst. For. Resour. Contrib. 55.
OLIVER. C.D.. and B.C. LARSON. 1990 Forest stand
Several actions could promote transi-
FAHEY. T.D.. J.M. CAHILL. T.A. SNELLGROVE and
dynamics. McGraw-Hill. New York. 467 p.
tion from the present management direc-
L.S. HEATH. 1991. Lumber and veneer recover
PEREZ-GARCIA. J.M. 1991. An assessment of the im-
from intensively managed young-growth Dou-
pacts of recent environmental and trade restric-
tions to the goal of managing across a
glas-fir. USDA For. Serv. Res. Pap. PNW-RP-
tions on timber harvest and exports. Cent. Int.
landscape. Government agencies. envi-
437. 25 p.
Trade in For. Prod., Coll. For. Resour.. Univ.
ronmental organizations. private timber-
FIGHT. R.D., J.M. CAHILL. T.D. FAHEY, and T.A.
Wash.. Seattle. Work. Pap. 33. 45 p.
land owners. and timber industry can
SNELLGROVE 1987. Financial analysis of prun-
SALWASSER. H., D.W. MACCLEERY. and T.A. SNELL
adopt policies that promote landscape-
ing coast Douglas-fir. USDA For. Serv. Res.
GROVE 1992. New perspectives for managing
Pap. PNW-RP-390. 17 p.
US National Forest System. Unpubl. rep. to
scale management. Federal. state. and
KELLOGG. R.M.. and R.W. KENNEDY. 1986. Implica-
North American Forestry Commission Sixteenth
county laws governing forest manage-
tions of Douglas-fir wood quality relative to
Session. Cancun. Mexico, February.
ment and controlling incentives and regu-
practical end use. In Douglas-fir: stand manage-
STUIVER. M. 1978. Atmospheric carbon dioxide and
lations can be changed in a coordinated
ment for the future. C.D. Oliver, D.P. Hanley.
carbon reservoir changes. Science 199 (4326):
and J.A Johnson. eds., p. 97-102. Univ. Wash..
253-58.
way to promote landscape management.
Seattle. Inst. For. Resour. Contrib. 55.
WASHINGTON STATE DEPARTMENT OF NATURAL RE.
A large public or private forest landowner
KERSHAW, J.A., JR.. C.D. OLIVER, and T.M. HINCK.
SOURCES. 1990. Olympic Experimental State
can play a lead role by committing to
LEY. Effect of harvest of old-growth Douglas-fir
Forest draft management plan. July. Wash. State
managing across the landscape, thereby
stands and subsequent management on carbon
Dep. Nat. Resour., Forks.
providing the stability to develop thin-
dioxide levels in the atmosphere. J. Sustain. For.
WHITE. P.S. 1979. Pattern. process, and natural dis-
(In press.)
turbance in vegetation. Bot. Rev 45:229-99.
ning. pruning, landscape planning. and
KOCH. P. 1991. Wood vs. non-wood materials in US
WILSON. E.O., and F.M. PETERS. eds. 1988. Biodi-
similar infrastructures. The technology to
residential construction: some energy-related in-
versity. Natl. Acad. Press. Washington, DC.
manage across the landscape can become
ternational implications. Cent. Int. Trade in For.
so advanced that managing in this way
Prod.. Coll. For. Resour.. Univ. Wash.. Seattle.
Work. Pap. 36. 38 p.
Chadwick Dearing Oliver is professor of silvicul-
becomes more economically desirable
LIPPKE. B.R. Meeting the need for environmental
ture. College of Forest Resources, University of
than alternative ways.
protection while satisfying the global demand
Washington, Seattle, and JOURNAL OF FORESTRY
Once implemented. landscape man-
for wood and other raw materials: a North
editorial board member for silviculture.
agement will have additional advantages:
American and global trade perspective. In Pro-
-Forest management will be more
ceedings of the FPRS conference on wood prod-
uct demand and the environment, Vancouver.
efficient and profitable. since greater
BC. (In press.)
GIS Applications in
record-keeping will allow land managers
MACLEAN. C.D., J.L. OHMANN, and P.M. BASSETT.
to shift from managing forests on an in-
1991a. Preliminary timber resource statistics for
Natural Resources
ventory basis to managing stands as as-
southwest Washington. USDA For. Serv. Re-
sour. Bull. PNW-RB-177. 46 P.
Selected Papers from the World's Foremost
sets in a portfolio (Oliver. in press).
1991b. Preliminary timber resource statistics
GIS/Natural Resources Conference Series,
-Reduced fear of more environmen-
for the Olympic Peninsula, Washington. USDA
Edited by Michael Heit & Art Shortreid,
tal regulations will encourage invest-
For. Serv. Resour. Bull. PNW-RB-178. 46 p.
Foreword by Charles R. Hartgraves
ments in silvicultural operations at levels
1991c. Preliminary timber resource statistics
This 400-page, hard-cover book is a
that will maximize profits.
for the Puget Sound area, Washington. USDA
compilation of the best papers given at
For. Serv. Resour. Bull. PNW-RB-179. 46 p.
-A more constant flow of employ-
the GIS'87 GIS'91 conferences
O'HARA. K.L., and C.D. OLIVER. 1991. Silviculture:
sponsored by Forestry Canada. A
ment and products from each area will
achieving new objectives through stand and
comprehensive overview of GIS
help stabilize rural communities.
landscape management. West. Wildlands
applications in natural resources in the
-Maintaining all structures across
17:28-33.
United States, Canada and Europe, the
OLIVER, C.D. 1991. Thinning and pruning 10- to 30-
book includes articles on forestry,
the landscape will ensure species do not
year-old plantations in western Washington: in-
wildlife, timber inventory, harvest
become endangered by a loss of habitat.
vestment. social, wood supply. and environmen-
scheduling, environmental assessment,
-The flow of high-quality forest
tal consequences. Unpubl. review draft, January
data sharing, hardware, training, data
conversion, remote sensing and
products from the region will protect the
9. to Governor's Timber Team, Timber Com-
more. Through the cooperative
environment by reducing global use of
mittee. State of Washington. 54 p.
efforts of the editors and GIS
Enhancing biodiversity and economic pro-
more polluting substitutes.
World, Inc., we are pleased to be
ductivity through a systems approach to silvicul-
able to offer GIS Applications in
ture. In Proceedings. the silviculture conference.
Natural Resources at far less than
Literature Cited
Vancouver. BC. (In press.)
its market price:
OLIVER. C.D., D.R. BERG. D.R. LARSEN. and K.L.
$29.95 (U.S.) and $34.95 (Canada);
BARRETT. J.D., and R.M. KELLOGG. 1986. Lumber
O'HARA. 1992. Integrating management tools,
major credit cards, purchase orders
quality from second growth managed forests. In
ecological knowledge, and silviculture. In New
or checks accepted. Add $30 for
A technical workshop: juvenile wood-what
perspectives for watershed management, R. Nai-
overseas air mail. Order toll-free from
does It mean to forest management and forest
man. ed., ch. 13. Springer-Verlag. New York.
the U.S. or Canada
products?. p. 57-71. For. Prod. Res. Soc.. Mad-
OLIVER. C.D., C. HARRINGTON, M. BICKFORD. L.
ison, WI. Proceed. 47309.
HICKS, S. MARTIN. T. RAETTIG, G. HOYER. B.
1-800-GIS-WRLD
BOYCE. S.G. 1985. Forestry decisions. USDA For.
GARA. W. KNAPP. G. LIGHTNER. and J. TAPPEINER
GIS World, Inc., 155 E. Boardwalk Drive,
Serv. Gen. Tech. Rep. SE-35.
II. 1991. Northern spotted owl habitat in previ-
Suite 250, Fort Collins, CO 80525, USA
(303) 223-4848 FAX: (303) 223-5700
SEPTEMBER 1992 25
CINTRAFOR
Special Paper Series
14
Managing Landscapes:
Role of Goals, Regulations
and Incentives
Paper presented at
Conference on Manging Landscapes for
Biodiversity, Forest Health and Sustained Timber Production
15 September 1992
Bruce R. Lippke, Director
Center for International Trade in Forest Products
AAAAA
,
^^^^^
AAAAA
AAAAA
CENTER FOR INTERNATIONAL TRADE IN FOREST PRODUCTS
UNIVERSITY or WASHINGTON
COLLEGE or FOREST RESOURCES AR-10
SEATTLE WASHINGTON 98.95
1
MANAGING LANDSCAPES:
ROLE OF GOALS, REGULATIONS AND INCENTIVES
Bruce R. Lippke, Director
Center for International Trade in Forest Products
University of Washington
Abstract
Managing for biodiversity is a new concept requiring an understanding of how
economic forces can be used to contribute to both timber production and non-timber
values. The problems of using general regulatory mandates to achieve local
environmental goals include both increased costs driving out investment and
substitution by competing suppliers from other regions. These suppliers are likely to
be higher-cost producers with less efficient production. More habitat damage from
harvest by alternative wood suppliers, as well as increased CO₂ and other emissions,
may be expected. If the alternative suppliers use non-renewable resources, much
higher emissions are likely. Using incentives, it is possible to increase investments to
serve a broader set of goals including both local biodiversity, rural employment, and
global environmental gains. Incentives must contribute to increased returns for
reaching target stand structures, cash flow to support the needs of increased
management, and reduced risk of confiscation. A system of management bonds is
shown to be a potential solution for each of these problems, making it possible to
motivate the private sector to achieve both high timber outputs and increased non-
timber, non-market outputs. When public beneficiaries contribute revenue to the
private forest manager as an incentive for the production of non-revenue-generating
public outputs such as biodiversity, market efficiency can be extended to broader
goals than just timber production.
Managing for biodiversity is an economic option
Managing landscapes for biodiversity, forest health and sustained timber production
is a relatively new concept, as it applies new technology to earlier concepts of
sustained management. Oliver (1992) has shown that forest management
investment can be directed to increase biodiversity and, as a consequence, increase
wildlife habitat and other non-timber outputs. The question of what it might take to
motivate forest managers to manage for increased biodiversity will be examined in
this paper. The impact of regulatory approaches to achieving forest management
objectives is shown to create problems with broad environmental as well as
economic effects. The role of goals in addressing some of these problems and the
benefits of developing incentive-oriented systems is introduced. Social and legal
issues will largely be left to others to analyze.
2
Adequate prices for investment in
forest management are a recent phenomenon
The history of forest economics from a management standpoint is not very long. In
the Pacific Northwest logging began with the lowest-cost sources of timber along the
tidelands. Over the last 80 years it has moved inland and up the mountainsides,
with logging, hauling and road costs steadily increasing.
In the earlier part of the century many cut-over lands were abandoned to avoid taxes
because the rate of return for managing the land over a rotation was so poor. Tax
policies were adjusted to improve the motivation for managing forest lands. The
capital gains tax at one time provided a substantial motivation to manage forest
lands better.
Holding the land under natural regeneration with some fire control represents a
minimum management strategy. The next increment in investment for increased
output requires restocking the land soon after harvesting. Restocking involves an
investment of roughly $230 per acre (in inflation-adjusted 1991 dollars) including site
preparation, the seedlings and planting. For a reasonable target rate of return of at
least 6%, it requires a minimum price of $100/mbf at harvest to reach target return
levels. As can be seen in Figure 1, until the late 1960's the harvest price (adjusted
for inflation) was less than $100/mbf. Thus, the motivation for intensive
management of forests has only a 25 year history.
Figure
1:
ADEQUATE PRICE FOR RESTOCKING
Harvest price In $'91/mbf
300
250
200
150
100
50
0
1950
1960
1970
1980
The most difficult aspect of forestry investments is the long growing cycle. An
investment such as stocking has no payout for 50 years and results in negative cash
flow for that whole investment period. This is not a common or desirable investment
strategy in our economy. Recognizing a reasonable rate of return on one's money
(such as 6% or more over the holding period) results in a present value of the next
rotation's harvest of only one-twentieth of the value of the current harvest. There is,
in effect, a clash between market-economics with its high discount rates and
3
concepts of sustained management, which would value the next generation equally
with the current one.
Nevertheless, timber values have risen and are now at least high enough to attract
some investment in more than minimal levels of forest management. It took the
strong housing years of the early 1970's to pull prices up to levels attractive to
investments in forestry.
Higher volume and quality can be produced with higher prices:
The timber supply curve
There is a supply curve for timber produced on managed forest land, just as exists
for any other product, although it involves a longer term than for most products. As
prices rise, production costs increase in order to increase output. With higher prices,
higher rates of return are generated for investors, attracting new investment to
expand supply. With low prices some natural volume of timber with low quality still
exists. Under plantation management, volume and quality can increase with price,
consequent to making additional investments in forestry. Such supply curves have
been demonstrated before (Sedjo, 1981). Figure 2 illustrates such a supply curve
for several levels of management, including natural stands with minimal investment,
stocking soon after harvest, pre-commercial thinning, commercial thinning, and
pruning.
Figure 2: SUPPLY vs PRICE
New
technology
Price
$/mbf
400
Prune
300
C. thin
200
Pre-C. thin
Stock
100
Natural
0
0
300
450
700
850
855
Volume and Quality
There are, of course, other technologies that have been left out of this example,
such as fertilization and genetic selection. These results also differ with site quality.
Given the many variations, an aggregate supply curve for a region will be a much
more smoothly rising function as prices rise than is shown in Figure 2. However, at
very high price levels, all worthwhile investments will have been made with
4
inadequate knowledge of how to extend the output any further and the supply curve
for a given land base will rise steeply at that output limit.
This demonstrates that investment in management accelerates the performance of
the forest but higher prices than have existed historically are required on all but the
most productive acres to make these investments in management make economic
sense.
What should we be trying to change to maintain biodiversity?
From an historical perspective, forests have no history of balanced stand structures
across landscapes. Nature does not provide stability. Natural disturbances are
occasionally very large. On occasion they have devastated total watersheds (Teensma,
et al., 1991); smaller disturbances are more frequent.
Economic harvests have not provided a balance, either. Harvests started along
coastal waterways and moved inland, up the hills, leaving little behind that could be
considered a balance. Even the reduction in forest fires has changed the balance in
our forests, resulting in unmanaged second growth stands more dense than historic
natural stands. These second growth stands will not move along the same path to
old-growth as earlier stands that were subject to more frequent fires.
History is therefore not a great guide as to what managers should do to improve
biodiversity. Managing for improved biodiversity can make sense for the production
of more non-timber values, but it represents a new goal, requiring new methods.
If Pacific Northwest policy makers choose to pursue such a goal it may well be in
concert with a new and growing spirit around the world. The 1972 UNCED
conference set the stage for increasing non-market environmental values. The
International Tropical Timber Organization (ITTO) has been hard at work for most of
a decade, attempting to provide a better balance in tropical forests by increasing
sustainable management and reducing deforestation. The recent UNCED
conference on the Environment and Development in Rio de Janiero in 1992 was
another step toward a global convention on sustainable forestry. While these
historic events have heightened awareness of the need for sustainability and
biodiversity, they have also brought into focus the conflict between developing
countries' needs, dominated by economic growth, and developed countries'
concerns that environmental protection is becoming more important. In reality, a
reasonable level of economic growth is required for environmental sensitivity.
Developing countries are not willing to sacrifice growth for biodiversity or other non-
market values. Developed countries, with their greater wealth, must lead the way in
learning how to manage for non-timber values which have no market.
5
The prescription for increased biodiversity is increased investment
There are several management options available that can make a substantial
difference in achieving increased biodiversity:
1. If there are too many dense young stands with no understory, thinning is
required, whether it is commercially profitable or not, in order to avoid overly-
crowded stands. This will improve the health of the forest as well as
biodiversity.
2. If there is too little old growth in a watershed:
Both commercial thinning and increased pruning will accelerate the rate of
-stands taking on late successional characteristics.
Some harvests can be delayed in watersheds where the amount of old
growth is in short supply.
Fertilization can accelerate growth and the time when managed stands
achieve structures more like old-growth.
Leaving more trees and logs for habitat may be appropriate in some
situations.
3. If there is too much sedimentation, delaying the amount of harvest in a
watershed may be appropriate.
4. To improve cover in cleared areas, leaving behind trees, snags, and corridors
may be appropriate in some areas.
5. To slow down rural withdrawals, a growth management issue, link rural
development to forest maintenance.
While this list is not exhaustive of the possible prescriptions, it does represent major
opportunities to improve biodiversity. However, each of these actions represents
either an increased investment or an increased cost and therefore a reduced return
on investment.
The general prescription for increased biodiversity requires increased investment
and more management. The dilemma is that no market exists for most of the non-
timber outputs being produced by these investments. They are therefore not likely to
occur without some change in motivation. If regulations are used to mandate
minimum practices to achieve these results, costs increase. Increased costs reduce
the rate of return to investments rather than attracting additional investment.
Investments will be driven out, resulting in less available cash flow. This is the
6
reason the economics of biodiversity management are as important as the biology
and technology. In order to succeed, we must understand the role of economics. If
it is not as simple as regulating minimum standards, then it is important to know just
what happens when regulatory mandates are used, and how the goals might be
changed to avoid the problems of regulatory approaches. Can alternative incentive
approaches produce different results?
As Oliver (1992) has shown, a landscape can be managed to increase biodiversity,
reduce sedimentation and erosion problems, and produce a better balance in forest
stand structures. These structures produce a better balance of habitat over time,
supporting more fish and wildlife with fewer booms and busts. But there are both
plus and minus economic consequences of this result, including more jobs from
increased investments and higher-quality wood, which can stabilize job growth and
reduce fluctuations in the long term. In the short term, however, the lower returns
will not support the investment needed in additional management.
As in most issues in management, there is both a carrot and a stick approach. In
this case it is regulatory incentives or mandates.
Negative impacts from mandated regulations
If delayed harvests, buffer strips, set-asides, or less-than-commercial thinning are
mandated, the result is reduced timber output with lower returns to managers. If it
were already commercially profitable to thin, there would be no cost of minimum
practices, since the economics would already be driving managers to provide at
least the necessary degree of thinning. That is, if it were already commercially
profitable, the regulation would not be needed. If the regulation is mandated to
reach a biodiversity goal, it will increase costs and drive out other investments. If
that sounds counterproductive, it should, as will be shown in more detail.
Worse yet is that, if a mandatory regulation succeeds in increasing biodiversity even
on the reduced acreage that might be managed, it also increases the risk of a
"taking" as a consequence of the success. If, for example, a stand is accelerated to
look like old growth and a spotted owl takes residence (a goal of biodiversity
management), other regulations may prevent the manager from harvesting, a
substantial cost penalty for producing the goal. Instead of successful management
producing rewards, the regulatory framework produces additional penalties. That, of
course, further reduces the manager's willingness to invest in the prescriptions
desired for increased biodiversity. Regulatory approaches all too frequently have
perverse consequences.
To determine how to avoid these consequences, it is appropriate to review the
interactions between regulations, supply and demand.
7
Economics of regulations on wood output
The elementary supply and demand curves in Figure 3 show the normal relationship
where the demand for timber or wood output in a region decreases as the price
rises. Similarly the supply curve, such as that developed in Figure 2, suggests that
as prices increase managers will be motivated to increase supply in the region.
Figure 3:
ECONOMICS OF REGULATIONS ON WOOD OUTPUT: LOCAL SUPPLY CONSTRAINTS
OR COST INCREASES
Market
Price
Demand Curve
Constrained
Supply Curve
Supply
Reduced
Curve
B
Availability
Price
Higher Cost
Increase
C
A
Wood
Volume
Volume Décrease
The equilibrium between unconstrained supply and demand is noted on Figure 3 as
point A. If regulations are imposed that mandate buffers or delays in harvesting, the
supply that would be available in that time period is reduced, represented by a shift
to a constrained supply curve with less output for a given price. Similarly,
regulations which mandate non-commercial type operations such as non-commercial
thinning or pruning are cost increases that shift the supply curve up to the
constrained supply curve. In either case, the equilibrium between supply and
demand in the region is shifted to point B.
The impact of the reduced supply curve is reduced competitiveness with other
supply regions and a reduced volume and or quality with increased price. The result
is less revenue and less cash flow for investment in forest management. If the
competition is very strong from other suppliers around the world, prices will not be
8
able to rise as much as shown. The local demand curve will be flatter, as markets
are sourced by other suppliers around the world. Cardellichio, et al. (Cardellichio, et
al., 1988; Perez-Garcia, 1991) have shown how suppliers from all parts of the globe
compete for markets. In the long term it is impossible for processors to increase
their prices much before going out of business as a consequence of the competition
from the other suppliers. In the worst case, with no price increase needed to pull out
competing supplies from substitute sources, the new equilibrium shifts all the way to
point C, with a much reduced volume of output and no price increase to offset the
volume declines, therefore producing much less cash flow for investment.
The diagram depicts only the local economic consequences of a mandate to
increase biodiversity, suggesting that economic gains in other regions will substitute
for the reduced output in the constrained region. The question should also be raised
what happens to the environment in these other regions that increase output. Since
our goal should be more investment, not less, and global environmental
improvements, not losses, it is important to understand how these economic and
environmental linkages work.
Setting aside Northwest forests produces
environmental consequences around the world
To demonstrate these consequences, some global impacts from the reduced timber
output from recent constraints on Pacific Northwest timber supply will be used as an
example. Lippke, et al. (1990), showed that there would likely be a long term
harvest decline of 4.2 billion bd ft from the 1983-87 harvest average of 18 billion bd
ft, which preceded the conservation actions and litigation. This harvest decline
included an estimate of the set-asides required on private acres, the impact of the
conservation strategy developed in the interagency report on federal acres
(Hamilton, et al., 1990) as well as declines in USFS management plans dependent
upon pre-ISC strategy to save owls (as well as other emphasis changes toward less
timber production). Forest Service sales levels and other constraints on state and
private owners, including recent changes to forest practices acts, have all worsened
since the 1990 report, hence a 4.7 billion bd ft reduction in harvest is illustrated here
as the supply shift in the Northwest.
That volume is roughly equivalent to a plantation of 10 million acres on 100 year
rotations with 100,000 acres annual harvest using USFS management regimes
(somewhat less on industrial lands).
With any constraint in supply the demand does not just disappear but is shifted to
other substitute suppliers. These alternatives include other wood producers around
the world, non-renewable resource suppliers that provide competing products for
9
construction and other uses of wood, and some reduction in demand reflective of
the higher prices, including some new conservation.
If the substitution is from wood overseas, wood suppliers such as the Russian Far
East, holder of the largest softwood inventory in the world, as much as 15 times
more acres may have to be harvested to provide the same product (Lippke, 1992).
Figure 4 shows the product output per acre per year for the two regions, including
adjustments for waste as well as rates of growth.
Figure 4:
PRODUCTIVITY COMPARISONS (FOR EQUAL PRODUCT OUTPUT)
Bd Ft/Acre/Yr
700
600
500
400
300
200
100
-
0
USFS WA State
Russian Far East
A substantially larger number of acres of habitat would be harvested than would be
preserved in the US. Part of this increase results from much poorer growing
conditions in the Russian Far East. Another part derives from their poor
infrastructure, which would result in enormous wood wastes, shown to be roughly
equivalent on an annual basis to the CO₂ emissions from a fleet of 900 thousand
autos with average usage.
It is, of course, not really known whether saving 100,000 acres of harvest in the
Pacific Northwest is better or worse environmentally than increasing harvest by 1.5
million acres per year in the Russian Far East. That would require a relative set of
values on different environmental factors. It does suggest that we should not ignore
the environmental consequences of policy in one region causing environmental
damage in another region.
Given the trend toward larger environmental constraints on timber supplies in many
countries, it might be assumed that there is no longer another source for increased
wood output. In that case, the substitution for the Pacific Northwest set-asides
would be made up from substitution by non-renewable resources such as steel,
aluminum, concrete, and plastics, all of which are much more fossil-fuel-intense in
their manufacture. Peter Koch, a scientist on the original Committee on Renewable
Resources in Industrial Materials (CORRIM) used that commission's report (1976) to
10
show the impact of non-wood substitution on energy consumptions and CO₂
emissions (Koch, 1991). For a 4.7 billion bd ft harvest reduction replaced by
competing non-renewable products, the increased fossil fuel consumption would
generate as much CO₂ emission as a fleet of 6 million autos.
WITH SUBSTITUTION BY NON-RENEWABLES
Harvest
Energy Consumption
Increased
Reduction
Increased
CO₂
4.6
80
35
billion bd ft
million bbl/oil
million tons
Success with global environmental protection clearly requires more consideration for
these linkages than independently regulating in local regions.
Wood markets are linked around the world by relatively free trade. Each stage of
production (forest management, processing, and consumption/disposal) has links to
the environment. Forest management impacts habitat, energy consumed, fossil fuel
used, CO₂ and other emissions, recreational opportunities, and other measures of
the environment. Similarly, the processing of wood products impacts many of these
measures-like fossil fuel consumption and emissions--and is linked back to forest
management. Consumption and disposal also involve energy-intensive activities
and impact recreational opportunities through land conversion; they are in turn
linked back to processing and forest management.
GLOBAL ECONOMIC/ENVIRONMENTAL LINKAGES
Global trade
stages of
Forest
Processing
Consumption
processing
Management
& Disposal
Environmental Linkages
Habitat /Ecosystems
Energy and CO₂
Fire and waste
Ecosystem attributes
Recreational opportunities
Because of these linkages, one regional impact can not be examined in isolation.
Policy based on such an isolated relation and designed to achieve a narrow goal
may have significant and probably undesirable consequences in other regions.
11
Environmental efficiency requires economic efficiency
The basic economic linkages suggest that constraints to efficient production will
result in substitution by inefficient producers, which generally causes an increase in
environmental damage through the reduced efficiency.
Open markets allow the lowest-cost production to reach consumers. These cost
savings are real and produce an increased standard of living measured by values in
our market system. But efficient production will generally mean efficient use of
resources, which in turn means less environmental damage. Even when the
resources are free, such as water, constraining the use of a resource shifts the
production to a more marginal producing region. This will most likely shift the
environmental consequences to the region of less efficient use of the resource.
BASIC ECONOMICS
Free Trade
Lowest Cost Production
Policy
Increased
Enviro-Impacts
Constraints
Standard
from Efficient
of Living
Production
Marginal Producers
Economic Losses
Larger Enviro-Impacts
from Less Efficient
Production
As the diagram above suggests, any policy that constrains the flow of the lowest cost
production to consumers necessarily shifts production to marginal and less efficient
producers. That definitely causes economic losses on a global scale, with the losses
in the constrained region greater than the gains by the alternative suppliers.
Similarly, the increase in production by marginal producers will increase the
environmental impacts due to their greater inefficiency. While there may be counter-
examples where the inefficient producer is inefficient because of less access to
environmental resources, this is certainly not the likely case in forest products.
Environmental protection generally requires the use of the most efficient producers.
Environmental regulations that succeed by constraining efficient producers in one
12
region can result in substitution by suppliers in some other region with more negative
environmental consequences.
It should be obvious from these examples and flow diagrams of impacts that
determining the right goal is important. Too narrow a prescription, like saving one
species in one region, is likely to be counterproductive to other environmental
measures and the global environment unless the value of that species is considered
much higher than that of other species and other environmental measures, thereby
more than offsetting their losses. It will also be costly.
Target goals for landscape management
A more robust goal that brings these factors together would include:
1. Increased biodiversity and forest health over landscapes (not just one species
saved)
2. Contribution to more regional and rural employment (economic efficiency, not
just a high cost solution)
3. Global environmental gains greater than losses (not improvement of our own
back yard at the expense of global deterioration).
We have shown that, even if regulation produces biodiversity on a limited acreage, it
will be at the expense of both regional and global wealth and the global environment.
A framework is needed that can support all three goals. If regulations are not
effective, the question then becomes: can incentives support all three goals?
What are efficient solutions?
To reduce CO₂ emissions with the least negative economic consequences, users of
carbon would be uniformly taxed for carbon taken from the ground (fossil fuels), not
carbon that was taken from the CO₂ in the air (plants and trees). Policy makers
describe this as internalizing the cost of the environmental damage, so that the
market system will efficiently find the next best alternative. Regulating the carbon
content of certain products would cause an inefficient allocation of resources since it
does not allow the market to find the lowest-cost solution. Note that regional cost
internalization of a carbon tax will not suffice, as it will merely allow the region with
the cost increase to import the carbon in product form from other regions where the
carbon emissions will be increased as much if not more. Much of Japan's energy
efficiency gains derive from increased imports of energy-intensive materials.
13
In order to increase or better balance wildlife habitat, the values for wildlife should be
internalized, or alternatively, the costs that are harmful to wildlife should be
internalized. But burdening producers with a regulatory tax or cost will reduce forest
management and shift the burden to other suppliers, which is generally
counterproductive. If incentives are provided, management can be increased while
also providing improved environmental outputs. If the incentives are provided by
local beneficiaries, the beneficiaries would be paying for their local benefits, an
efficient market system. The value--rather than the cost-of the benefits would then
be internalized into the market system for efficiency. If local or broader groups of
beneficiaries pay for their benefits, there would not be a shift to competitive
suppliers, distorting efficient production, as would be the result of internalizing costs
in the local supply region.
Who are the beneficiaries of landscape management?
If their are no beneficiaries, clearly no one should be charged the value of incentives.
In the case of landscape management, many beneficiaries will gain from increased
forest management, even when there would be zero or negative returns to land
managers.
Increased and better-balanced habitat benefits those publics interested in
wildlife.
Better aesthetics from increased diversity would benefit those publics so
inclined.
Reduced CO₂ emissions may become a critical global need.
Reduced rural unemployment would benefit rural communities and the state
and local governments.
Secondary manufacturing production and employment would benefit
processing companies and their workers.
Higher-quality wood should restore the image of quality wood producers
benefiting the processing sector and the region's economy.
An increased supply of chips from thinning would reduce the shortages
caused by conservation.
Hardly any of these benefits will flow to the land manager, certainly none in the near
term. Further, the chance of colonization by protected species of improved habitat
derived from investment in management may constrain the ability to harvest
constitutes a substantial risk to that investment.
14
Incentive structures most effective in key investment components
First, the rate of return to the land managers should be increased if they manage to
increase non-timber outputs as well as timber outputs (which have market values).
Second, and especially for small owners, it must be recognized that the availability of
cash flow is every bit as important as rate of return. Small owners generally do not
have available cash for the necessary forest investments, as they have no steady
stream of operations producing cash on an annual basis.
Third, the regulatory risk of confiscation has risen dramatically in recent years in the
Pacific Northwest. It will be necessary to reduce this risk if long term investment in
the region is to be expected.
Useful incentive structures
The traditional motivation provided to increase investment has been the tax credit.
Compensation for public non-market outputs in the form of a tax incentive would
increase the rate of return and motivation for intensified management. A cash
management bond could be drawn upon when the necessary management to
increase biodiversity is accomplished. A joint venture or contract with public
regulators would reduce risk of a taking of assets which may result from successful
implementation of a biodiversity management strategy. Basically, success in
producing non-market values requires reward in terms of a benefit to landowners,
either in increased returns or a protection against risk of confiscation of assets.
These concepts can usefully be integrated by using tax credits as a source for cash
management bonds, which would function as biodiversity performance contracts. A
portion of the state yield tax or federal capital gains tax could be placed in
management bonds. The bonds would be redeemable only to reimburse cash for
management steps necessary to reach target stand structures in a watershed.
These bonds would therefore be established for management options such as
thinning, pruning, buffers, delayed harvesting, etc. The bond would provide the
incentive and much of the cash to manage for non-market non-timber outputs as
supplementary to timber outputs.
While the example below suggests that such an incentive structure could be
established by dedication of only a portion of the state yield tax, it would require a 25
year startup, a classic problem of sustained management concepts. To produce
incentives to manage more acres now, rather than 25 years down the road, including
management on the backlog of acres already in need of thinning, additional sources
15
Example application over a rotation
Public funding of tax credit
in forest management bonds year 1
(current yield tax about $500 per acre)
$250/acre
Bond grows at government secure rate
4%/yr
Bond worth by year 25
$670
Use $300 for thinning & pruning
+2% ROI
ROI from 5.5% to 7.5%
Bond worth by year 50
$990
Use $990 to defer harvest as needed
(can defer 10% for 50 yrs,
more for shorter periods)
defer 10% harvest
of funds would be required. The next example represents one possible scenario:
How to source funds today-rather than in 25 years
Apply 60% of current yield tax in bonds
to thin 25 year old stands
$300/acre credit to thin & prune
+2%ROI
Use federal tax credit of 10% of income, resource
capital gain, or allow inflation adjusted
depreciation of all costs
$990/acre to defer harvesting or to catch up
10+%
on backlog of thinning & pruning
deferral
A portion of the current yield tax should be made available today for managing
overly-dense stands that are now 25 years old. However, the yield tax can not
simultaneously fund incentives to delay harvests where needed. In recognition of
the importance of resource management for public benefits,a resource management
capital gain could be established in order to generate additional funds.
There is no overwhelming reason to consider the yield tax or capital gains tax
exclusively as the source of the funds; they are merely public sources of funds. A
public bond paid off by any other source would be as good.
While these incentives may seem costly given the problem of current budget deficits,
in reality they are less so when the regulatory alternatives are considered. The cost
of recent changes in forest practice requirements in Washington state has been
shown to be in the 5-10% range (Pierson, 1992). This is a negative impact to the
region that could be offset by using the incentives approach and produce the new
goals far more efficiently. If it is worth doing, it certainly should be worth doing
efficiently. If it is not worth the cost, it is counterproductive to mandate the results.
16
There is a risk of introducing inefficiency by placing too high a value on social
benefits and incentives. The marginal benefits could be smaller than the marginal
costs. But if the costs are low there should be little likelihood of assuming too much
value for the benefits being received.
Alternatives for fund raising that lower the cost
of purchasing biodiversity
There are other schemes to raise the funds to promote increased forest
management. Since some watersheds will produce benefits more efficiently than
others, the market mechanism could also be used to allow bidding by land managers
to allocate the bonds. If there is a limited pool of funds for the incentives, more
biodiversity improvement would be obtained with less timber output loss per dollar of
incentive by placing the bonds out for bid. A forest management bond issue could
be offered at the state level through the bond market with the payback to be derived
over time from the yield tax and other taxes on wildlife and other non-timber forest
outputs 1 The uses of funds from the bond would be provided in the form of the
cash management bonds shown above except that they would be made available in
sealed subscription bids so that their full value to the timber owners is determined by
competitive bidding, hence there would be no more cost to the public than necessary
to obtain the increased forest management practices.
Other alternatives to the offering of a state forest management bond might include
the re-licensing of dams that cause wildlife damage by requiring electric power
utilities to put up bonds for buying wildlife offsets through increased biodiversity
management of the forests. While internalizing this cost to hydro power could
decrease competitiveness with many of the consequences described earlier, hydro
power in this region is so much below the cost of other power sources there is little
risk of making them less competitive by internalizing their cost of wildlife damage. It
is true that even a small increase in electric rates makes those producers most
sensitive to electric costs--such as aluminum producers-somewhat more marginal.
In that sense it would be nice if an estimate for the true cost of CO₂ emissions could
be internalized at the same time to avoid the substitution of fossil fuel power
sources.
The larger problem might be to determine how much net damage to wildlife the
dams have created in order to determine how much they should contribute to a bond
for forest management. At least it would seem to be more efficient for the dam to
1 At the conference on Managing Landscapes for Biodiversity, Forest Health and Sustained Timber
Production, a coffee break discussion group extended several of these ideas considerably, with noted
contributions by Jim Kraft, Plum Creek Timber Company.
17
offset its wildlife damage by putting up a bond for forest management, useing market
efficiency to produce biodiversity, than for the dam to be forced to curtail its supply.
Reducing the risk of success in achieving biodiversity
from causing a taking of assets
Since the management bond is similar to a public agency contract with a private
provider, it would not be difficult to build in protection from a public taking. The
contract would simply include a guarantee allowing the harvest under the
management objectives or a requirement that the government purchase the asset at
market value if it desires to maintain the forest for non-market public purposes. If the
timber that is produced under biodiversity management will not be allowed for
harvest, compensation should be provided in the same way as for other deferrals, by
paying the market rate necessary to defer harvest.
This should not be regarded as an inconsequential issue. Small tree farmers appear
to be liquidating at an alarming rate compared to their earlier harvest levels. When
they are asked what is motivating their actions, the general response is that the risk
of never being able to harvest is increasing, hence their best strategy is to harvest
before it is too late. Whatever motivation they had in the past to hold their inventory
to more mature ages appears to have been more than offset by the risk that they
may not be allowed to harvest when they want to.
Just as this risk of confiscation by government override of contract terms could be
reduced by the management bond as a contract, the risk to the public of loss of
habitat and other environmental degradation through land conversion could similarly
be averted by contract.
If the value increase in land conversion to non-forest uses such as residential
construction is less than the losses in wildlife and other values to society, the joint
benefit should be to avoid the conversion. In this case, the landowner who wants to
convert should pay a value for conversion that could be used to buy up offsets to the
wildlife lost, much like the dam example. The land converter would pay a price for
conversion which would allow the public to buy an equal amount of wildlife in other
management bonded areas.
Again, the practical problem is in establishing the values. If the costs are low, there
is not a great difficulty in creating incentives. If, however, values of non-timber
benefits are badly estimated on the high side, market inefficiencies could be
generated.
18
Other factors important to allocation of incentives
for delaying harvest across multiple owners
over a landscape
If the management bonds are not allocated on a bidding system but are instead
allocated on a watershed basis, the problem of determining who gets to harvest and
who must defer harvest arises. For efficiency, management bonds at a landscape
level would need to be tradeable within a watershed, so that the owner in the poorest
position to defer harvest would be able to harvest and the owner in the best position
would gain the benefits of deferring.
For example, in a watershed short on old-growth stand structures, the management
bonds offered would include an increased share of harvest deferral bonds VS harvest
bonds. The bonds would be made available on a fair share of mature inventory
basis and could then be resold within the watershed to other owners, so that owners
could more efficiently pursue their best strategy.
Other fine-tuning alternatives
The magnitude of tax credits offered in a watershed could be made proportional to
the degree to which the watershed is out of balance in stand structures. In a
watershed far short of a particular stand structure, the size of the management bond
could be increased to attract the desired investments. This might work well in the
situation where a limited number of management bonds are auctioned off to the
highest bidder, since there would be larger benefits available for the larger problem
areas thus making it more attractive to purchase those bonds in a limited offering.
With increased incentives for severe stand structure imbalances, there would be less
chance that the sale of management bonds would be under-subscribed for the more
difficult situations.
Other benefits of management bonds
Management bonds for forest management would also serve other purposes, such
as improving timber market efficiency and the social acceptance of forest
management.
The bonds would provide a guaranteed track of management performance over the
rotation. That is, the public would be protected by knowing that the manager were
performing. It could not be said that owners were irresponsible, since they would be
managing to the best public goals that scientists could set. It should expand the
public's limited knowledge and perception of forest management as the terms would
be defined and no longer in dispute. In effect, the management would be bonded
through the accountability for actions taken to use the management bonds.
19
With a bonded track record of performance on the acre, the market for immature
stands could be more liquid. Timber values may not be discounted as much due to
uncertainty about what has happened to the stand. Increased liquidity of less-than-
mature stands with better values would go a long way toward making available the
cash needed for increased investments in forest management.
Forest management bonds would be largely goal-oriented rather than prescription-
oriented. Every approach suffers some risk of over-management. Targeting goals is
better than forcing prescriptions.
Why not make the tree farmer pay for the bonds?
The logical temptation with such a bonding scheme is to make the tree farmer pay
for the bonds. While that may be more direct than other regulatory approaches, the
objections should still be obvious.
The tree farmer forced to absorb costs which are benefits to others is less able to
compete with even less efficient alternative timber supply sources. There is no free
lunch: public beneficiaries must pay for their benefits. If costs could be equitably
internalized on a global basis, competitiveness shifts could be avoided. However,
that would require an effective world government, which does not yet exist. Shifting
the burden to other regions or resources does not constitute environmental
protection. The best that can be done on a regional basis is for public beneficiaries
to pay for their benefits through incentives to forest managers.
If the costs of other people's benefits continue to be internalized into the tree
farmer's costs, the shift to non-renewable resources and their pollutants will be
accelerated. If the beneficiaries pay for producing their environment and other
values, the forest sector can be made more environmentally sound and sustainable
without having to solve the problems of the steel, coal and gas industries at the
same time.
Relationship between private and public managers
While the focus of this evaluation has been on private forest managers, the question
of how it relates to federal public lands should be considered. For example, is there
a benefit to trade federal public acres for private acres to increase publicly-preserved
old-growth in a watershed?
It costs the consumer as much (and more) for state or federal managers instead of
private owners to forego timber values for wildlife or biodiversity values. It is just as
20
important that public owners contribute efficiently to goals as for the private owner.
Inefficiency is not discriminatory.
While it may be easier for public managers to support non-market outputs, it does
not reduce the cost burden on the consumer. It may redistribute who pays for the
wildlife and other values by requiring a general tax rather than a local tax. The best
policy is generally for the beneficiary to pay. Public decisions are probably more
wasteful of resources and less efficient, being less guided by market forces.
The opportunity exists but our
Institutional structures are not empowered
In conclusion, we have shown that if biodiversity is a useful goal the problems with
regulatory approaches are large and generally counterproductive to other
environmental goals. Global trade linkages will transfer demands from efficient
producers to less efficient producers, causing both economic and environmental
losses at the global level even if local environmental benefits are achieved. Broader
goals must be considered, such as to balance achievement on biodiversity with
economic impacts while making sure that local environmental gains are greater than
any global losses. For biodiversity management to succeed in increasing non-timber
outputs with relatively low cost to timber outputs, an incentive system must be
developed that avoids the negative impacts of mandated goals. A skeleton of such a
system was developed. Unfortunately, the regulatory agencies involved in forest
management do not necessarily have the authority to devise incentive systems.
The ethical questions are:
If all you have power to do is to regulate (and increase costs), rather than to
develop incentives, can you improve the environment?
Even if you can improve the environment in one area, if it is more than offset by
declines in other areas, should you?
World leadership in environmental improvement must come from developed
economies such as our own. We must learn how to organize our institutional
processes to support incentive approaches to non-market environmental values.
Managing forests for biodiversity provides a good opportunity to learn how to use
incentive approaches.
21
References
Cardellichio, P., Y. Youn, C. Binkley, J. Vincent, and D Adams. 1988. An economic analysis of
short-run timber supply around the globe. CINTRAFOR Working Paper 18, College of Forest
Resources, University of Washington, Seattle.
Koch, P. 1991. Wood vs non-wood materials in US residential construction: Some energy
related international implications. CINTRAFOR Working Paper 36, College of Forest
Resources, University of Washington, Seattle.
Hamilton, T., and J. Zimmer. 1990. Economic impact of implementing the recommendations of
the Inter-agency Scientific Committee. USFS/BLM Interagency Working Group, May 1990.
Lippke, B. 1992. Meeting the need for environmental protection while satisfying the global
demand for wood and other raw materials: A North American and global trade perspective.
In Proceedings of FPRS Conference: Wood Product Demand and the Environment,
Vancouver BC.
Lippke, B., K. Gilless, P. Sommers, R. Lee. 1990. Three-state impact of spotted owl
conservation and other timber harvest reductions: A cooperative evaluation of the economic
and social impacts.
Oliver, C. 1992. A landscape approach: Achieving and maintaining biodiversity and economic
productivity. Journal of Forestry 90(9):20-25.
Oliver, C. 1991. Thinning and pruning 10 to 30 year old plantations in Western Washington:
Investment, social, wood supply, and environmental consequences. Prepared for
presentation to Governor's' Timber Team, State of Washington, 9 January 1991.
Perez-Garcia, J. 1991. An assessment of the impacts of recent environmental and trade
restrictions on timber harvest and exports. CINTRAFOR Working Paper 33, College of
Forest Resources, University of Washington, Seattle.
Pierson, R. N. 1992. Cost of managing Pacific Northwest forest landscapes for biodiversity.
Presented at University of Washington Symposium on Managing Landscapes for Biodiversity,
Forest Health and Sustained Timber Production. Included references to 5 studies on costs of
management.
Lippke, B. 1981. Discussion response. In Sedjo, R. A., (Ed.), Proceedings on workshop on
issues in US international forest products trade. Resources for the Future, Research Paper
R-23, p. 23 ff.
Teensma, P. D. A., J. T. Rienstra, and M. A. Yelter. 1991. Preliminary reconstruction and
analysis of change in forest stand age classes of the Oregon Coast Range from 1850 to
1940. BLM Technical Note T/N OR-9.
CONVENTION ON BIOLOGICAL DIVERSITY : UK AND US CONCERNS
1. The Convention on Biological Diversity was adopted in Nairobi
on 22 May 1992 following negotiations conducted under the
auspices of UNEP. The Convention was opened for signature at the
Earth Summit in Rio on 5 June. To date around 160 countries have
signed the Convention and eight have ratified. The UK has signed
but not ratified the Convention. We are committed to
establishing the basis on which we can ratify the Convention by
the end of 1992. The US has not yet signed the Convention. This
note looks at the primary concerns which the UK and the US have,
explores the UK approach to the financial concerns, notes the
concerns which have been expressed about Article 3 of the
Convention and looks at the UK interpretation of the provisions
dealing with intellectual property rights.
Background
2. The seventh and final plenary meeting of the
Intergovernmental Negotiating Committee in Nairobi was difficult
and the financial Articles in particular presented some
considerable problems for the UK, the US and a number of other
countries. In addition, the US took the view that the provisions
in the Convention dealing with intellectual property rights (IPR)
were unsatisfactory. Both the UK and US made statements at this
/final
final meeting. The UK indicated that it had serious reservations
about Articles 20 and 21, particularly in regard to decisions to
be taken by the Parties. We reiterated our call for deletion of
those parts of Article 21.1 which suggested that the Conference
of the Parties would have authority over the financial mechanism
and would make decisions on the levels of contributions by
Parties. We also stated our understanding that Article 3 sets
out a guiding principle for Parties to take into account in
actions under the Convention. The US statement referred to
existing conservation measures in the US, its commitment to
biosafety, expressed concerns about IPR, and, like the UK, stated
its understanding that Article 3 sets out a guiding principle for
Parties. During negotiations the UK and US were unsuccessful in
their call for a chapeau to Article 3 to emphasise that it was no
more than a guiding principle to be taken into account.
3. At the time of the adoption of the text of the Convention, the
UK, the US and 17 other countries signed a Declaration indicating
their understanding of Article 21.1 The US also tabled a
unilateral Declaration stating their concerns about the parts of
the text relating to intellectual property rights, finance,
technology transfer and biotechnology.
4. At the time of signing the Convention in Rio, the UK deposited
a Declaration stating our understanding that the decisions to be
/taken
taken by the Conference of the Parties under paragraph 1 of
Article 21 concern "the amount of resources needed" by the
financial mechanism; and that nothing in Article 20 or 21
authorises the Conference of the Parties to take decisions
concerning the amount, nature, frequency or size of the
contributions of the Parties under the Convention, and that
Article 3 "sets out a guiding principle to be taken into account
in the implementation of the Convention." The texts of these
Declarations and Statements are at Annex I.
Financial Concerns
5. Specific reference to the Global Environmental Facility
(GEF), as the body entrusted, albeit in the first instance
temporarily, with operating the financial mechanism of the
Convention was achieved during the negotiations but at the price
of unwelcome language in paragraph 1 of Article 21. In
particular we are concerned that while the Convention requires
the Conference of the Parties to decide on the amount of
resources needed, the Article can also be interpreted to mean
that there is a requirement that such funds will be provided and
that in addition the Conference of the Parties will determine the
amount, nature, frequency and size of the contributions required
from individual Parties to achieve the total sum needed.
/6. The
Possible Approach to Meeting Financial Concerns
6. The major concerns of the UK on finance focus on the fifth
sentence of Article 21.1. For us, it is important to know, or at
least to be confident before the first Conference of the Parties
that we will have the means of controlling the level of the
financial obligation we have to meet and to be certain that
donors are not going to be faced with having to write blank
cheques for completion by the Conference of the Parties, only a
minority of which are likely to be developed countries. We see
no prospect, in the next few years at least, of amending the text
of the Convention either directly under Article 29 or by means of
a protocol of amendment and it has already become clear that the
expert panels established by UNEP (and on which UK and US are
your over
represented) are unlikely to address these issues. As the UK
sees it, that leaves just one possibility, the Rules of Procedure
for the Conference of the Parties, as a lever for enabling
effective control over decisions under Article 21.1 to be
exerted. For related reasons the donors probably also need to
ensure control over decisions made under Article 21.2 since it
provides that "the Conference of the Parties shall decide on the
arrangements and give effect to para 1 above."
7. Under Article 23 of the Convention the Rules of Procedure of
the Conference of the Parties are to be agreed by consensus.
/Provided
Provided a state was already a Party, it could prevent the Rules
of Procedure from being adopted unless they contained
satisfactory provision regarding decision making under Article
21.1 and 2. The Rules of Procedure are likely to be negotiated
by the Intergovernmental Negotiating Committee (INC) and adopted
at the first meeting of the Conference of the Parties. There can
be no guarantee that the Rules will be adopted in the form
negotiated in the INC, so only Parties will be in a position to
block their adoption if, during the first meeting of the
Conference of the Parties, they turn out to be unsatisfactory.
The first meeting of the INC will not take place until September
1993, though it is not clear that the areas on which we have
concerns will be discussed at that first meeting. The first
meeting of the Conference of the Parties will take place within a
year from when the Convention comes into force, ie ninety days
after the thirtieth instrument of ratification has been
deposited; so far eight countries have ratified and many others
have plans to do so in the course of this year. The first
meeting of the Conference of the Parties could be as early as the
first quarter of 1994, in which case decisions on Ratification
would need to be taken later this year in order to be sure of
being able to influence the adoption of the Rules of Procedure
from within the Conference of the Parties.
/8. In
8. In practice, it would be politically very difficult for just
one state to stand out alone against adoption of the Rules of
Procedure at the first meeting of the Conference of the Parties.
To ensure an acceptable way forward on Article 21.1 and 21.2, it
would be important to develop as wide a range of support as
possible for a firm position on the key voting provision in the
Rules of Procedure; and even if the Rules of Procedure were
agreed satisfactorily we recognise it would not preclude attempts
to amend them at other meetings. In negotiating the Rules we
would want to insist that they contain a concluding provision to
the effect that "These Rules of Procedure may be amended by
consensus by a meeting of the Conference of the Parties". Such
language is well precedented in the Rules of Procedure to
international environmental agreements.
9. The UK considers that ideally there should be language in the
Rules of Procedure on voting that makes it clear beyond doubt
that decisions under Article 21.1 and 21.2 require unanimity of
the Parties. However, we recognise that, in the context of a
global convention, this is unlikely to prove achievable and in
reality we would have to settle for consensus of the Parties.
10. The typical Rules of Procedure for UNEP conventions make the
following provision:
/"The
"The Parties shall make every effort to reach
agreement on all matters of substance by
consensus. If all efforts to reach consensus
have been exhausted and no agreement reached,
the decision shall, as a last resort be taken
by a two-thirds majority vote of the Parties
present and voting, unless otherwise provided
by the Convention and the present Rules of
Procedure".
The position of countries concerned about the ambiguities of
Article 21.1 could, in our view, be protected if the basic UNEP
convention voting formula were to be augmented, thus:
"The Parties shall make every effort to reach
agreement on all matters of substance by
consensus. If all efforts to reach consensus
have been exhausted and no agreement reached,
the decision, except a decision under paragraphs
1 or 2 of Article 21 of the Convention, shall, as
a last resort, be taken by a two-thirds majority vote
of the Parties present and voting, unless otherwise
provided by the Convention, and the present Rules of
Procedure. Decisions of the Parties under paragraphs
1 and 2 of Article 21 shall be taken by consensus."
/11. This
11. This form of words would, we consider, meet concerns about
others taking decisions on the amount of resources donor
countries are to provide, the "blank cheque" problem. In order
to be sellable, any text we propose will have to be simple and
brief. Wording comparable to that suggested above is to be found
in the Rules of Procedure for the Basel Convention on the Trans-
boundary Movement of Hazardous Waste adopted in Uruguay last
December, though the parallel is not exact and reference to it as
a precedent will have to be carefully presented.
12. The above approach is not without its problems. The wording
suggested would mean that all decisions under Article 21.1 and
21.2 would be taken by consensus, with the consequence that one
developing country could block a decision which the donors wanted
adopted, for instance concerning the relationship between the
Convention and the GEF. It would be possible, as a matter of
drafting, to provide for different voting arrangements for
decisions under different elements of Article 21.1 and 2.
But the more complicated the text of the voting rule becomes the
more complex its negotiation will be.
13. Insistence on an unambiguous consensus requirement for
Article 21.1 and 2 decisions, seems to us to be the only sure way
forward on our concerns on the financial provisions. We would be
interested to hear if the US agrees and if it considers there are
/other
other effective approaches under the Convention for protecting
the financial concerns of donor countries. We would also be
interested to know if the major financial concerns of the US are
contained in Article 21.1 and 21.2 or whether concerns range more
widely perhaps to include Article 21.3 and Article 20.3
14. As mentioned above, on signature the UK deposited a
Declaration stating our understanding that the decisions to be
taken by the Conference of the Parties under paragraph 1 of
Article 21 concern "the amount of resources needed" by the
financial mechanism; and that nothing in Article 20 or 21
authorises the Conference of the Parties to take decisions
concerning the amount, nature, frequency or size of the
contributions of the Parties under the Convention, and that
Article 3 "sets out a guiding principle to be taken into account
in the implementation of the Convention." This enabled the UK to
sign the convention but at the same time expressed our concerns
and set out the points of interpretation on which we would need
to secure a wide measure of agreement before moving to
ratification. In the event of US signature the UK suggests that
they might want to deposit a similar Declaration, so adding
weight to our common concerns.
/15. As
Concerns on Article 3
15. As already stated, both the UK and the US included in their
statements at the final negotiating session their understanding
of Article 3. The Declaration which the UK deposited on
signature of the Convention stated our understanding that Article
3 "sets out a guiding principle to be taken into account in the
implementation of the Convention." The principle was first
agreed in 1972 at the Stockholm Conference and since then has
been reiterated in many non-binding environmental texts and even
in the preambles to Conventions.
16. It can be argued that the title to Article 3 demonstrates
that the Article constitutes a single principle and it is not
therefore possible to read its second limb without accepting that
its impact is qualified by the first limb. Moreover, Article 3
is called a Principle and hence it must provide overall guidance
in the implementation of the Convention and not as an operative
provision. There remains some sensitivity in the UK, however,
about the possible effects of the inclusion of this principle as
a binding provision in Article 3, without any qualification or
chapeau, because the words might be read as creating a new head
of liability between states. The UK's interpretative statement
on Article 3 was tabled to reduce the risk of excessively broad
interpretations; clearly such risks would be further reduced were
/a similar
a similar statement to be made by the US. We would be interested
to hear the US views on this issue.
Concerns on Intellectual Property Rights
17. We are aware that the US has concerns about the possible
effect of other provisions in the Convention, in particular that
the provisions giving access to biotechnology may be read as
having the effect of undermining the value of US intellectual
property, particularly patents. Whilst we would agree that the
language used in the Convention on this subject is not
particularly clear, we consider that it does firmly support the
concept of IPR. We do not therefore share these concerns about
the implications of this part of the Convention.
18. They key article on patents is Article 16. We are aware that
some voices in industry have suggested that this Article requires
there to be no patents, or at least only very weak patents, for
biotechnology. There are a number of reasons however why the UK
does not share these concerns. First, in Article 16.2, it is
clear that access to technology under the article "shall be
provided on terms which recognise and are consistent with the
adequate and effective protection of intellectual property
rights". Second, Article 16.3, states that access to
technologies by developing countries which provide genetic
/resources
resources (including property protected by patents) are to be on
"mutually agreed terms" and in accordance with Article 16.4,
which states that the obligations in Article 16.2 have to be
observed. Third, Article 16.3 states that access to technology
also has to be "in accordance with international law", thereby
indicating that states party to the Paris Convention for the
Protection of Industrial Property (of which there are 108) must,
in granting compulsory licenses, observe their obligations under
that Convention.
19. We understand that the US also have concern about access to
genetic resources. Whilst there is an obligation of sorts on
Governments to encourage sharing in a "fair and equitable way",
it is made clear in Article 15.7 that this shall be on "mutually
agreed terms". Provision of IPR-protected technology on
"concessional and preferential terms" is clearly qualified in
Article 16.2 by the words "where mutually agreed". Taken
together, we are satisfied this provides sufficient safeguards.
20. We could always have wished for better language in many parts
of the Convention but equally it could have been much worse. The
penultimate sentence in Article 16.2 in our view firmly supports
IPR and, given the extreme difficulty of the negotiations on this
issue, is perhaps as strong as we could have hoped for. It
should also be kept in mind the fact that much of the technology
/which
which would be of most use to developing countries is not in any
case protected by IPR.
21. We understand that the Executive Director of UNEP is aware
of the problems about IPR and has proposed a process by which
these concerns could be addressed. This will begin after the
round of expert panels is complete and before the first INC in
September 1993. This process is, however, not likely to produce
a solution which involves amendment of the text. As stated
above, either amendment under Article 29 of the Convention or a
Protocol of Amendment would be likely to require a number of
years. Amendments can only be proposed by a Contracting Party
and must be proposed at least six months in advance of a meeting
of the Conference of the Parties where any adoption of amendments
would occur. If an amendment were adopted it would come into
force three months after two thirds of Contracting Parties had
ratified it. Such a procedure could therefore take up to five or
six years to go through and would certainly entail the US
becoming a Party to the Convention. Similarly, it would be
premature to think in terms of a Protocol of Amendment. The
Convention would have to have been languishing in the doldrums
for some time before such an approach became feasible.
A
22. A more likely way forward would be by an interpretative
statement. This could be anything from a unilateral Declaration
/to
to some kind of multilateral arrangement. A multilateral
arrangement, if promoted by, for instance, the Executive Director
of UNEP and agreed by a number of prospective parties to the
Convention would clearly provide greater comfort than a
unilateral statement.
Department of the Environment
March 1993
UNITED KINGDOM
(ORIGINAL: ENGLISH)
1.
The United Kingdom congratulates the Chairman, the
Executive Director and the hardworking Bureau on their successful
efforts in bringing this important Convention to a conclusion.
It will be a significant contribution to next month's Earth
Summit. Unfortunately, like Japan, the United Kingdom has
serious reservations about the financial Articles, 20 and 21,
particularly in regard to decisions to be taken by the Conference
of the Parties. We have not however sought to block consensus,
even though our difficulties may prevent the United Kingdom
becoming a Party to the Convention.
2.
The United Kingdom understands that the basic principle
of the financial mechanism under this Convention is that the
Conference of the Parties determine policy, strategy, programme
priorities and eligibility criteria, the institutional structure
has responsibilities of administration and operation. Thus the
available amount of resources, modalities of contributions should
be agreed between the Conference of the Parties and the
institutional structure entrusted with the operation by the
Conference of the Parties. Thus we insisted on the deletion of
"authority and" in Article 21, paragraph 1, line 4, and the
deletion of the fifth sentence in paragraph 1 and at least the
replacement of "decided" by "reviewed".
3.
The United Kingdom understands Article 3 to set out a
guiding principle for the Contracting Parties to take into
account in their action under the Convention.
UNITED STATES OF AMERICA
(ORIGINAL: ENGLISH)
1.
In regard to Article 3, the United States understands
that that Article references a guiding principle that the
Conference of the Parties will bear in mind in their actions
under this Convention.
2.
In regard to Articles 7-13, the United States has a
tightly woven system of state and federal programmes in fish and
wildlife management. Our system is undergirded by hundreds of
state and federal laws and programmes and an extensive system of
federal and state wildlife refuges, wildlife management areas,
recreation areas, parks and forests. The United States does not
intend to disrupt its existing federal and state authorities.
Indeed, our Government is committed to expanding and
strengthening these relationships. Should the United States
become a Party to this Convention, its intent would be to meet
its conservation obligations through existing federal laws and
would look forward to continued cooperation with the various
states in this regard.
3.
In regard to Article 15, the United States would like to
reaffirm its belief that the impressive gains in world food
production have been a consequential result of the free flow of
genetic resources among all countries. We intend to retain our
policy of open access to genetic resources and related
technologies.
4.
The United States cautions that, if the application of
this Convention restricts access to these resources, the world
will not benefit from this instrument. We urge other nations to
join in assuring the availability of genetic resources for the
purposes of food and agriculture.
5.
In regard to Article 16, this delegation finds it
potentially deficient in the protection of intellectual property
rights. The United States strongly supports the promotion of the
transfer of technology and scientific cooperation provided that
intellectual property rights in technology are recognized and
protected. Article 16 fails to to recognize the positive role of
intellectual property systems in facilitating technology transfer
and cooperative research and development by private entities.
The United States encourages the establishment of strong
intellectual property rights systems in all nations and stands
ready, if so requested, to offer technical assistance to any
nation wishing to do so.
6.
With respect to the biosafety provisions of Article 8,
paragraph (g), and Article 19, paragraphs 3 and 4, the United
/States
States is strongly committed to ensuring safety for all
biotechnology products, including those intended for planned
introduction into the environment. We believe the record is
clear, based on experiences in many countries around the world,
that the most effective and efficient approaches build on
existing frameworks and authority, and guided by scientific
principles bought to bear in considerations of the qualities of
the products or organisms involved. New regulatory mechanisms
that take inappropriate account of processes of production
create unnecessary bureaucratic problems with no commensurate
increase in environmental or human health and safety, and should
be avoided. We are eager to cooperate with other nations in
sharing insights and experiences in this area with a view to
building all nations' capacities to take advantage of these new
technologies.
7.
In regard to Article 22, paragraph 1, in the context of
this paragraph we interpret "threat" to mean a threat of serious
damage to biological diversity.
DECLARATION OF AUSTRALIA, AUSTRIA, BELGIUM, CANADA, DENMARK,
FINLAND, GERMANY, GREECE, ITALY, JAPAN, MALTA, NETHERLANDS,
NEW ZEALAND, PORTUGAL, SPAIN, SWITZERLAND, UNITED KINGDOM,
AND UNITED STATES
Australia, Austria, Belgium, Canada, Denmark, Final,
France, Germany, Greece, Italy, Japan, Malta, Netherlands, New
Zealand, Portugal, Spain, Switzerland, the United Kingdom and the
United States of America state their understanding that the
decision to be taken by the Conference of the Parties under
Article 21, paragraph 1, of the Convention refers to the "amount
of resources needed" by the financial mechanism, not to the
extent or nature and form of the contributions of the Contracting
Parties.
DECLARATION OF THE UNITED STATES OF AMERICA
1.
In signing the Final Act, the United States recognizes
that this negotiation has drawn to a close.
2.
The United States strongly supports the conservation of
biodiversity and, as is known, was an original proponent of a
convention on this important subject. We continue to view
international cooperation in this area as extremely desirable.
3.
It is deeply regretable to us that - whether because of
the haste with which we have completed our work or the result of
substantive disagreement - a number of issues of serious concern
in the United States have not been adequately addressed in the
course of this negotiation. As a result, in our view, the text
is seriously flawed in a number of important respects.
4.
As a matter of substance, we find particularly
unsatisfactory the text's treatment of intellectual property
rights; finance, including, importantly, the role of the Global
Environmental Facility (GEF) ; technology transfer and
biotechnology.
5.
In addition, we are disappointed with the development of
issues related to environmental impact assessments, the legal
relationship between this Convention and other international
agreements, and the scope of obligations with respect to the
marine environment.
6.
Procedurally, we believe that the hasty and disjointed
approach to the preparation of this Convention has deprived
delegations of the ability to consider the text as a whole before
adoption. Further, it has not resulted in a text that reflects
well on the international treaty-making process in the
environmental field.
DECLARATION OF THE UNITED KINGDOM OF GREAT BRITAIN
AND NORTHERN IRELAND
1.
The Government of the United Kingdom of Great Britain
and Northern Ireland declare their understanding that Article 3
of the Convention sets out a guiding principle to be taken into
account in the implementation of the Convention.
2.
The Government of the United Kingdom of Great Britain
and Northern Ireland also declare their understanding that the
decisions to be taken by the Conference of the Parties under
paragraph 1 of Article 21 concern "the amount of resources
needed" by the financial mechanism, and that nothing in Article
20 or Article 21 authorizes the Conference of the Parties to take
decisions concerning the amount, nature, frequency or size of the
contributions of the Parties under the Convention.
ROUGH DRAFT
OPEN FOR COMMENT AND SUBSTANTIAL REVISION
TO:
Whom It May Concern
SUBJECT: Convention on Biological Diversity
As the Clinton/Gore Administration reconsiders the United
States position on the Convention on Biological Diversity
("Biodiversity Treaty"), it is appropriate to examine the
potential for harmonizing the interests of environmental
preservation and conservation with intellectual property rights.
Vice President Gore has stated that:
The Clinton-Gore Administration will
present a
coherent plan for protecting biodiversity and
intellectual property rights in a way that enhances
conservation and facilitates global research efforts by
U.S. businesses and universities
[thereby] linking
economic progress to the protection of biodiversity.
1
As the Working Group continues its work, it is appropriate
to review three documents. First, a draft letter from members of
the Working Group to the Clinton/Gore Administration urging that
certain steps be taken to implement this harmonization.
ATTACHMENT 1.
Second, a draft document to be issued by President Clinton
that outlines the Administration policy with respect to the
domestic issues that arise with respect to intellectual property
generally, and with respect to the Biodiversity Treaty,
specifically. ATTACHMENT 2.
Finally, assuming that it is possible to reach the desired
harmonization, a draft statement to be submitted with the
signature of the United States to the Biodiversity Treaty. 2
ATTACHMENT 3. This statement indicates that in the event of a
substantially different interpretation being given to the
provisions of the Convention, the United States reserves its
rights under Article 38 to withdraw as members of the Convention.
1 Gore, "Essentials for Economic Progress: Protect
Biodiversity and Intellectual Property Rights, 4 Journal of NIH
Research 18,19 (1992).
2 This latter statement would also be submitted to the
Senate in connection with the submission of the treaty to the
United States Senate. As appropriate, these understandings
should be incorporated into the ratification process by the
Senate.
2
ATTACHMENT 1
Dear Mr. President:
We, the undersigned, on behalf of our organizations and
corporations, urge that you initiate a process that will lead to
the United States becoming a signatory to the Convention on
Biological Diversity as chief executive officers of a small
working group of corporations and environmental organizations
that have interests in biodiversity and biotechnology, urge you
to sign the Convention on Biological Diversity and to do so in a
way that clearly indicates our country's strong commitment to
protecting intellectual property rights and other national
interests. We firmly believe that in the event that these steps
are taken, our Nation can demonstrate to the world community that
it is possible to harmonize the goals of protecting biological
diversity and encouraging development of new technologies based
on genetic resources.
We agree that the protection of biodiversity serves the
interests of our Nation and the world community. For this
reason, we support the global efforts to preserve biological
diversity. In particular, we believe that creation of economic
incentives for countries to preserve their biological diversity
can be an extremely effective means to accomplish the goal of
conservation of biodiversity and the sustainable use of genetic
resources.
Now, after further analysis in view of the safeguards that
the Convention provides and the U.S. ability to address IPR and
other concerns during implementation of the treaty, we are
prepared to recommend that provided specific safeguards are
set in place the United States could agree to sign and ratify
the Convention. First As one early step, we believe that it is
essential that your Administration promulgate a statement on
intellectual property protection that spells out the underlying
rationale of why strong private property rights facilitates
biodiversity and mutually agreed technology transfer. A draft
statement that outlines these points is attached.
As in any international agreement, a number of articles of
the convention are subject to different interpretations, and some
of these interpretations would be detrimental to U.S. commercial
or global environmental interests. We feel that this is not
grounds for refusal to sign the convention. Rather, we feel the
U.S. should sign the convention and state its interpretation of
the more ambiguous articles. The United States, as a member of
the Conference of Parties, would then be in a position to
influence negotiation of subsequent amendments or protocols.
Moreover, if the Conference of Parties takes actions contrary to
3
the U.S. interpretations, the U.S. could exercise its option
under Article 38 to withdraw from the Convention.
For these reasons, we believe that it essential that, upon
there are two documents that the U.S. should prepare and issue at
the time of signing the Convention. the United States make a
strong pronouncement on the importance of providing effective
protection of intellectual property rights. [A draft statement
is enclosed.] Further, we believe it vitally important that
with our instrument of ratification, a statement be deposited
that reinforces this belief through interpretations of selected
provisions of the Convention. Such a statement would reinforce
the view of the United States that member countries cannot rely
on the Convention to diminish their protection of inventions made
with genetic resources. One of these is an interpretative
statement that presents the U.S. view of key provisions of the
Convention, which should be deposited with the United Nations at
the time of depositing our signature or accession to the
Convention. The other is a U.S. policy statement that explains
further our country's interpretation of the Convention's
provisions in key areas of concern, including especially the
protection of intellectual property rights and technology
transfer. We are enclosing initial drafts of both the
interpretative and policy statements as an indication of the
positions that our organizations believe would resolve our
substantive concerns sufficiently to warrant signing the
Convention. This interpretative statement would also emphasize
that if these key points were adversely interpreted by other
member countries, the United States would exercise its option
under Article 38 to withdraw from the Convention. This document
should be incorporated in the Senate ratification process.
We look forward to working with you and members of your
Administration to find a satisfactory solution to the issues
raised by the Biodiversity Convention. If appropriate, we would
propose a working group comprised of representatives from the
Departments of State, Commerce, Agriculture and Interior, as well
as representatives from the Environmental Protection Agency and
the United States Trade Representative, to develop the necessary
interpretative statements. We are happy to offer our services
and our support to your Administration in fashioning a way for
our country to join the community of nations that have signed the
Convention and at the same time to reassure our business and NGO
leaders that we can resolve their substantive concerns about the
agreement. We are certainly willing and available to discuss our
proposed drafts and the thinking behind them with Tim Wirth, his
staff at the State Department, and other members of the
interagency working group that will be developing the formal
materials to support a U.S. signature. We have addressed
primarily intellectual property issues and urge such a working
group to review these issues in detail. In addition, we expect
that you will review concerns about the legal and policy impact
4
of Article 22 on existing United States obligations under
international agreements.
We would be pleased to meet with you, or Vice President
Gore, to discuss these presentations in greater detail.
Sincerely,
5
ATTACHMENT 2
STATEMENT OF ADMINISTRATION POSITION ON
THE INTELLECTUAL PROPERTY RELATED PROVISIONS OF
THE CONVENTION ON BIOLOGICAL DIVERSITY¹
The United States believes that the conservation of
biological diversity and the sustainable use of its components
serve important environmental and economic goals. Conservation
of biological diversity will provide numerous benefits, including
new food sources, improved agricultural products and procedures,
new tools for combating disease, and will help maintain the
health of our ecological systems.
The United States agrees with the proposition that one way
to support the conservation of biological diversity and
sustainable use of its components is to create an economic
incentive for countries to preserve the biological diversity
within their borders. For this reason, the United States accepts
the principle that benefits stemming from productive use of
genetic resources should flow back to those nations that act to
preserve biological diversity and provide access to their genetic
resources. These benefits should arise from mutually agreed
transfers between contracting parties or private entities.
The United States also recognizes that the participation of
the private sector greatly enhances the attainment of economic
value from genetic resources. Providing effective incentives for
the development of new technologies that make use of genetic
resources is as critical as assuring the equitable sharing of the
economic benefits that may arise from the use of genetic
resources. However, absent an effective means to protect the
significant investments necessary to develop new technology, the
potential contribution of the private sector to the development
of economically valuable products will not be met.
For this reason, the United States believes that the
extension of adequate and effective intellectual property
protection for the technology derived from the use of genetic
resources is an essential prerequisite to the success of the
Convention. The United States has also determined that its
current system of laws that provide an effective level of
protection for intellectual property is entirely consistent with
the goals of the technology transfer provisions of the
Convention.
1
We anticipate that other statements will be made with
respect to the financial mechanism, biosafety, and other parts of
the Convention.
6
Furthermore, the United States firmly believes that the
provisions of the convention dealing with technology transfer
require that all parties to the convention must provide adequate
and effective protection of intellectual property rights in any
measures aimed at transfer of or access to technology. The
United States would resist strongly any effort by parties to the
convention to argue to the contrary, and believes that this
position will be upheld in any international forum in which the
issue might be raised. The United States will continue to insist
on adequate and effective protection of intellectual property
rights in negotiations on bilateral and multilateral trade
agreements and will not accept agreements that fail to provide
such protection.
Furthermore, the United States is convinced that the best
means to foster the technology transfer envisioned by the
Convention is for other member countries to provide an effective
level of intellectual property protection. Such protection will
provide the incentives necessary for the private sector to
generate the technology using genetic resources in the first
place. It will also provide the suitable climate necessary for
cooperation between U.S. firms and those in countries harboring
genetic resources. This cooperation can yield tremendous
benefits by fostering not only the voluntary and cooperative
transfer of new technology to developing countries, but by
encouraging the application of this technology to solve
indigenous problems facing those countries.
These private sector mechanisms can be complemented by
public sector initiatives to support technology transfer in order
to meet specific needs or objectives unmet by the private sector.
Among the actions that could be considered would be: the
establishment of a public-funded "intermediary" to either
purchase technologies or to facilitate private sector
transactions; strengthening the role of international
institutions like the International Agricultural Research Centers
(IARCs) which are already involved in technology transfer;
provision of development assistance funding to developing
countries enabling them to purchase technologies; and training
and assistance to developing countries to strengthen their
ability to develop technologies based on genetic resources.
There is an issue regarding seed banks and other
depositories of genetic material samples that have been collected
prior to the entry into force of this Convention. Since the text
of Article 15 (3) does not apply retroactively to samples
previously collected, the Convention imposes no legal obligation
for parties to share the benefits of the use of those materials
with the countries of origin. Nevertheless, the United States
and all countries should urge their research and commercial
organizations to enter into mutually agreed arrangements by which
such sharing would occur in these cases.
7
ATTACHMENT 3
INTERPRETATIVE STATEMENT OF THE UNITED STATES
General Interpretative Statement
The United States hereby declares its understanding of
Articles 1, 3, 15, 16, 19, 20, 21, and 22 [etc] of the Convention
on Biological Diversity. In the event that the Conference of
Parties adopts an interpretation contrary to these
understandings, the United States reserves its right to take
appropriate steps to respond, including withdrawal from this
Convention and all its protocols, as provided in Article 38.
Article 1
The United States declares its understanding that fair and
equitable sharing of the benefits arising out of utilization of
genetic resources requires members of this Convention to respect
the rights of other member countries and of private parties to
the technology that arises out of such utilization of genetic
resources. The United States further declares its understanding
that the phrase "appropriate transfer of relevant technologies"
under this agreement means that transfers of proprietary
technology may only proceed with the voluntary participation of
the owner of the technology.
Article 15
The United States declares its understanding of the meaning
of Article 15 (3) that resources obtained by public or private
entities before or outside of the Convention are not governed by
the Convention.
The United States declares its understanding that the
obligation imposed by paragraph 6 of Article 15 to carry out
research activities on genetic resources with the full
participation of Contracting Parties that provide such resources
in research activities is an obligation that applies only to
Contracting Parties, and not to the private sector within each
Contracting Party.
The United States declares its understanding with respect to
paragraph 7 of Article 15 that any sharing in a fair and
equitable way of the results and benefits arising out of use of a
genetic resource must take fully into account: exclusive rights
to technology that a party obtains through its efforts; and that
transfers of proprietary technology may only proceed with the
voluntary participation of the owner of the technology.
8
Article 16
The United States declares its understanding that access to
and transfer of technology under this agreement subject to
intellectual property rights under the Convention requires the
recognition of, and consistency with, the adequate and effective
protection of intellectual property rights, and thus guarantees
against the use of compulsory licensing laws to compel private
companies to transfer technology.
The United States declares its understanding of paragraph 2
of Article 16 that the phrase "fair and most favorable terms"
means terms that are determined by free market negotiations.
The United States further declares its understanding of
paragraphs 2 and 3 of Article 16 to be that in the case of
proprietary technology, transfers may only take place on terms
that recognize and are consistent with the adequate and effective
protection of intellectual property rights. Failure of a member
country involved in a genetic resources transfer to extend
protection, or action by a member country to limit the exercise
of an entity's intellectual property rights, is considered by the
United States as being inconsistent with this provision of
Article 16.
The United States declares its understanding that the
measures encouraged under paragraph 4 of Article 16 does not
permit the violation of "adequate and effective protection of
intellectual property rights" in any transfer of, or access to,
technology under this agreement.
The United States further declares its understanding that it
is the Contracting Parties -- not the private sector -- that are
to abide by the obligations in paragraphs 1, 2 and 3 referred to
in paragraph 4 of Article 16.
The United States declares its understanding that the
influence of the patents and other intellectual property rights
referred to in Article 16, paragraph 5 is fully consistent with
the objectives of the Convention.
Article 19
The United States declares its understanding that paragraphs
1 and 2 of Article 19 impose no obligation on Contracting Parties
to coerce private companies to share biotechnological research
with foreign governments or private companies.
The United States declares its understanding that paragraph
3 of Article 19 does not presume the necessity of a protocol on
the procedures for the safe transfer, handling and use of living
modified organisms resulting from biotechnology.
9
Article 21
The United States declares its understanding that the
periodic decisions of the Conference of the Parties to be taken
under paragraph 1 of Article 21 concerns "the amount of resources
needed" by the financial mechanism, not the extent or nature and
form of the contributions of the Contracting Parties.
Article 23
The United States declares its understanding that the
requirement for consensus on rules of procedure binds the parties
to consensus agreement upon procedures and mechanisms for
implementation of the Convention, including guidance on funding
for the financial mechanism and guidance relating to technology
transfer.
WWF
MEMORANDUM
TO:
Tim Wirth, Under-Secretary Designate for Global Affairs,
State Department, through David Harwood
CC:
Peter Seligman, Conservation International
FROM:
T.J. Glauthier
DATE:
February 12, 1993
RE:
Strategy to Garner Business Support for Biodiversity Protection
This is a first installment in response to the charge that you gave me at the NGO
meeting on January 28th. That charge was to suggest an approach for involving the
business community, in particular, in the Department's activities related to the Biodiversity
Convention in a way that will garner their support for signing and implementing the treaty.
In developing these ideas, I have had discussions with Conservation International,
World Resources Institute, and the Environmental Defense Fund. Schedules have
prevented us from collaborating as much as I would like, but I am getting good initial
support for the ideas below. In the interests of time, I wanted to share these with you as
quickly as possible, so you would know our thinking and can give us some of your thoughts
and reactions.
Some of the groups represented at the NGO meeting, notably WRI with support from
CI, are planning to send you more detailed recommendations for the longer-term
development of a national biodiversity protection strategy. The shorter term
recommendations in this memo should be entirely consistent with such a longer term
program, and could be a way to get the process started quickly.
Of course, you've seen the "town meeting" format recommended here used during
and since the campaign. I've used it quite successfully myself with EPA, and, of course,
WWF's RESOLVE group dedicates itself to variations of this approach in its dispute
resolution work. I know you are anxious to make some decisions quickly in this area, so I
would like to follow up with you as soon as possible. I'm sure we could convene a small
working group of people like Peter Seligman, John Sawhill, and others from the business
and NGO communities to develop specific ideas regarding how to carry this out.
World Wildlife Fund
1250 Twenty-Fourth St., NW Washington, DC 20037-1175 USA
Tel: (202) 293-4800 Telex: 64505 PANDA FAX: (202) 293-9211
Incorporating The Conservation Foundation. Affiliated with World Wide Fund for Nature.
2
Signing the Treaty
In the meeting on the 28th, I described the process which WWF has underway that
we believe will significantly aid you in being able to sign the Convention on Biological
Diversity, which the U.S. did not sign last June at the Earth Summit. We have assembled a
small working group of five corporate and NGO organizations to work on this, with support
at the CEO level. The five are WWF, Merck & Co., Genentech, World Resources Institute,
and the Environmental and Energy Study Institute.
Our goal is to reach consensus on the way that we believe the U.S. should sign the
treaty in order to resolve the major substantive concerns that industry, in particular, had with
it. Our goal is for our CEOs to send a joint recommendation to the President that he sign
the treaty, and to provide the President with our detailed recommendation on how that
should be done. We then expect to work with our colleagues in industry and the NGO
community to seek broad support for this position.
We have been meeting for several weeks, and are very close to completing our
work. In our judgement, the best course of action for the U.S. is to sign the treaty and file a
strong interpretative statement with our signature. We are working on a draft of such an
interpretative statement, which our CEOs will provide to the President for use in developing
the government's official version. We are also drafting a summary policy statement that
would accompany the interpretative statement, in a form that could be used in announcing
his signature and in transmitting the convention to the Senate for ratification. Our hope is to
complete our work so the letter from our CEOs to the President could come at the
beginning of March.
During the course of our work, we have informed others in the business and NGO
communities about this in a general way, but have not yet been at the point where we were
ready to circulate draft documents. We certainly expect to share this more generally, and
hope to receive a degree of broad-based support. Undoubtedly, there will be differences on
specific technical points in our recommendations which will be points for you in the State
Department and in the broader interagency working group to consider.
We hope this product will be useful to the President, both in recommending a
specific course of action that will result in our joining with all of the other nations that have
signed the convention, and in indicating a base of support among major corporations and
NGOs that have considered the issue in detail.
Town Meetings on Biodiversity
In order to bring the broader business and NGO community into discussions at the
State Department on biodiversity protection, we recommend that you hold two or three
"town meetings" over the next several weeks. These would be convened by the State
Department and would probably include 30 to 40 people at each session. By holding two to
three such meetings, with different attendees at each one, you would be able to draw in
approximately 60 to 100 representatives of business, NGOs, and other government
agencies.
3
The agenda for the meetings is critical. While the overall objective is to involve the
business community and garner support from them, there must be a substantive, legitimate
agenda for the meetings in order to actually attract the individuals and organizations that
you want. In our view, the meetings should not be used to answer the question of whether
to sign the convention. That is a question that may just elicit a lot of rhetoric-perhaps more
heat than light. We think our small NGO-corporate workgroup process described below will
help you a lot there.
The town meetings could provide quite useful information if they are focused on a
set of questions regarding what the government should do to ensure the best possible
implementation of the convention. In my experience, it is very important to frame three or
four direct, relevant questions in order to focus the discussion and ensure that the group
has a positive experience. If you decide to proceed with this concept, it will be important to
spend some time developing a final set of questions. We offer some preliminary
suggestions for questions that could provide such focus:
Here in the U.S., where we would have to develop our own biodiversity
protection plan, what government policies would provide the best incentives
for the private sector to preserve biodiversity here, on public and private
lands?
Internationally, what should the U.S. government do to facilitate and support
the beneficial transfers of, in the words of the Convention, "technologies that
are relevant to the conservation and sustainable use of biological diversity or
make use of genetic resources and do not cause significant damage to the
environment?"
Regarding the overseas operations of U.S. corporations, what are the
obstacles to responsible practices regarding biodiversity protection and
sustainable development, and what should the U.S. do, alone or in
cooperation with other countries, to create a setting in which the international
business community could more readily incorporate environmental concerns
into business practices?
Holding multiple meetings, with different participants, has a couple of advantages.
Obviously, as pointed out above, it increases the number of people you can involve, while
still keeping each group to a small enough size to facilitate active discussion. It will also
increase the likelihood of getting key individuals and organizations to participate, if you have
a couple of alternate dates. In addition, the dynamic of each discussion will differ, so you
will tend to get greater variety of views, and can feel more confident in those areas where
different groups all converged on similar recommendations. Finally, using multiple groups
puts final control firmly in your hands, as the convenors. No single group can try to force a
consensus on you in this design.
This approach should also be able to accomodate your desire to begin working with
the business community right away. It should be possible to convene these meetings within
just a few weeks, where the timetable is set primarily by the time to make arrangements
and to contact the participants with a little advance notice.
4
The town meeting approach is clearly a way to "jump start" the cooperation with the
private sector in a very short, focused manner. For the longer term, it will still be
appropriate to involve businesses and NGOs in more formal, product-oriented processes,
such as the development of a long-term biodiversity protection strategy: I know that both
World Resources Institute and Conservation International have recommendations for what
should be done over a longer, nine- to twelve-month timeframe. The town meeting
approach complements that, and can help develop a very cooperative spirit, but does not
replace such long-term efforts.
Copy
2/12/93
UNCLASSIFIED
TO:
The White House - Ms. McGinty
C - Mr. Wirth, Designate
FROM:
OES - Curtis Bohlen
SUBJECT:
Biodiversity Convention
SUMMARY
The second meeting of the UNEP experts panels on the
Biodiversity Convention convened last week in Nairobi. No
meaningful progress was made on interpretive issues relating to
finance and technology transfer. Ambassador Vicente Sanchez
(Chile) proposes to recommend to the new Executive Director of
UNEP that a new panel be convened to address technology
transfer issues, including intellectual property rights (IPR).
He has asked informally for our views. Separate discussions on
the need for a biosafety protocol continued to be problematic.
BACKGROUND
UNEP has convened a series of experts panels to advise the
Executive Director on the implementation of the Biodiversity
Convention prior to its entry into force. The first meeting
was held in December of last year; the second meeting was held
the week of February 1 in Nairobi; a third and final meeting is
scheduled for the week of March 15 in Montreal.
Panel 3 is devoted to finance and technology transfer
issues. Participants at the December meeting agreed that the
panel should consider interpretive issues related to both
finance and technology transfer and agreed further that the
Swiss could prepare a paper and bring to the February meeting
an expert on IPR to educate the panel on the Swiss concerns.
The Swiss did prepare a general paper outlining their concerns,
but could not bring their IPR expert due to illness.
- 2 -
Finance. The panel did not discuss interpretive issues at
this session, and it is not clear whether they will do so
at the next session. Instead, discussions centered around
establishment of policies, strategy, programe priorities,
and eligibility criteria for GEF funding. Discussion was
positive and productive, although no consensus was reached.
Technology Transfer. The panel engaged in a brief
discussion of the interpretive issues associated with
technology transfer, and it was essentially
non-substantive. France supported convening of a
sub-working group on IPR. The German co-chair agreed that
these issues were of serious concern to the German
government and should be addressed, but was of the view
that this panel did not have the necessary mandate.
Developing countries did not support convening a new group
and stressed that the panel did not have the mandate to
discuss the issues further.
Panel four continued its discussion of the need for and
modalities of a biosafety protocol. There is increasing
pressure -- in particular from the chair -- for rapid movement
towards a protocol based on the EC approach to biosafety. The
EC approach is diametrically opposed to long-standing U.S. law
and policy on biosafety. An attempt by the chair to call for a
vote on on the need for a protocol was successfully resisted by
the United States. It is becoming increasingly clear that the
United States needs to carefully reassess its position on
biosafety to determine whether to withdraw from the process
entirely or to soften its position in order to meaningfully
participate in the development of a protocol.
PROPOSAL FOR NEW PANEL ON IPR
Ambassador Sanchez (former chairman of the INC and
organizer of the panel discussions) proposes to recommend to
the new Executive Director of UNEP that a new panel be convened
to address IPR issues. He originally envisaged a
jointly-sponsored UNEP/WIPO (World Intellectual Property
Organization) meeting with a broad mandate to address IPR
issues. It appears, however, that he now intends to revise his
proposal to a UNEP-only sponsored experts panel, parallel in
format to current experts panels, with a mandate to advise the
Executive Director as to the scope of the interpretive issues
relating to IPR. He invited the USG to contact him this week
with any additional suggestions on his proposal.
In our view, convening of this experts panel would be a
positive development. It would provide a meaningful forum to
- 3 -
air IPR concerns prior to the first meeting of the
Intergovernmental Committee next fall. Existing panels have
been a forum for highly informed, rational debate. There is a
chance that convening of such a panel could further divide
developed and developing countries on technology transfer
issues, but on balance we believe that identification of key
technology transfer issues is the necessary first step towards
resolution of the issues. We believe that the proposed panel
is the best forum in the short-term.
There are advantages and disadvantages to having WIPO
co-sponsor the meeting. On the one hand, co-sponsorship with
WIPO might inject additional support for full and fair
treatment of IPR. On the other hand, co-sponsorship with WIPO
(and/or GATT) could have the unintended effect of broadening
the debate beyond the text of the Convention. (WIPO and GATT
could be invited to participate, however.) In our view, the
USG would be willing to participate under either scenario.
Moreover, we agree that the panel should have a relatively
limited mandate, i.e., to frame the issues for the Executive
Director but not to attempt to resolve the issues or even
decide upon a specific process to do SO. Developing countries
-- particularly those that have already ratified the Convention
or are close to doing so -- are skittish about re-opening
technology transfer issues and are not likely to support
convening of a panel with a mandate beyond the scope of
existing panels.
We believe it is important, however, that the subject of
the new panel be expanded to technology transfer issues
generally, and not limited to the narrower but important
sub-set of intellectual property rights.
The Swiss are considering whether they would be able to
host the meeting in Geneva. The Swiss participant informally
asked whether the USG would be able to contribute funds to the
meeting.
We have informed Commerce/PTO, USTR, and EB of these
developments. Working level personnel are generally supportive
of our approach, but have not sought clearance within their
respective agencies or bureau.
CONCLUSION
On the technology transfer issues, I propose to call
Ambassador Sanchez this week with the following points:
- 4 -
0
The USG supports establishment of a new experts panel
on the same basis as existing panels to advise the
Executive Director on the interpretive issues relating
to technology transfer.
The subject of the panel should be all interpretive
issues relating to technology transfer, and not
confined to the narrower but important sub-set of
intellectual property rights.
We would be amenable to a UNEP-only sponsored meeting
or a meeting co-sponsored with WIPO. In any event,
WIPO should be invited to participate.
The panel should have a limited mandate of airing and
framing the interpretive issues for the Executive
Director, but should not as a first step have a
mandate to resolve the issues (e.g., negotiation of a
protocol).
The panel should be convened at the earliest
opportunity (i.e., well before June 1993).
Although there should be only one speaker at a time
per country, the panel should not be limited to one
expert per country.
In our view the following countries should be
considered as participants:
Developing
Developed
India
USG
Argentina
Switzerland
Korea
France
Mexico
Germany
Kenya
Japan
EC
O
If asked: We would be willing to contribute funds to
convene the meeting.
On the biosafety issues, I propose to hold consultations
with interested industry members concerning the development of
a protocol. I will also convene an interagency working group
to reassess the U.S. position on biosafety issues.