PUBLIC DISCLOSURE AND ITS IMPACT ON COMPLIANCE

NIGEL BLACKBURN

Director of the International Chamber of Commerce, 38 Cours Albert 1er, 75008, Paris, France

As a representative of worldwide organization at an international Conference, I will first try to set the Question of public information on environment in a world-level perspective.

At Government level, worldwide action can be said to have begun with the 1972 Stockholm Conference. This gave rise to the creation of UNEP and numerous international programs on a plethora of subjects. The Stockholm declaration only contained some fairly general Phraseology on information, none of which was specifically addressed to the business community.

The next milestone is usually said to be the 1987 report of the World Commission on Environment and Development ("Brundtland Commission"). This led to a series of regional follow-up conferences. The one generally regarded as the most valuable took place in Bergen, Norway, in May 1990 - curiously enough, at exactly the same time as the first conference in this enforcement series. The Bergen Conference, which covered the UNECE area (Western and Eastern Europe, plus the USA and Canada) concluded with two notable elements of "soft law". One was the traditional ministerial declaration to which only 35 the governments involved were party. The other was the historically unique "Joint Agenda for Action" approved both by governments and the five non-governmental interests which had negotiating rights for the first part of the conference, i.e. business, environmental groups, labor, science and youth. Both documents contain extensive references to public disclosure of environmental information.

Shortly after Bergen, the European Community adopted a Directive on freedom of access to information on the environment, which will come into force in the 12 Member States at the end of 1992.

Bergen led directly to the United Nations Conference on Environment and Development (UNCED) in Rio in June 1992. For the purposes of this Conference, note simply that UNCED has produced much more soft law on disclosure of environmental information - and this soft law is subscribed to by virtually every country and at the level of the head of state or government. Principle 10 of the keynote Rio declaration for example reads as follows:

"Environmental issues are best handled with the participation of all concerned citizens, at the relevant level. At the national level, each individual shall have appropriate access to information concerning the environment that is held by public authorities, including information on hazardous materials and activities in their communities, and the opportunity to participate in decision-making processes. States shall facilitate and encourage public awareness and participation by making information widely available. Effective access to judicial and administrative proceedings, including redress and remedy, shall be provided."

Many references to information appear in the 500-page "Agenda 21". They cannot be detailed today but they all help to set the scene - for business and other non-governmental interests - in approaching the specifics of the Budapest Conference. The ICC has taken a positive view of the Brundtland Report, Bergen, and UNCED. Accordingly we aim to be circulating a positive view on provision of information around our network - 7,500 corporations and associations in over 100 countries - and to the business world at large. It has in fact been doing so since 1974, when it first issued its "Environmental Guidelines for World Industry". Three current initiatives should specifically be noted by this audience:

1. The Business Charter for Sustainable Development. Although launched only 18 months ago, the business charter has become the benchmark code for corporate environmental management. Over 1,000 corporations and business organizations in some 50 countries have already expressed their support for it in writing, including for example around 60 out of the top 100 in the fortune 500 list of leading industrial companies. The charter is endorsed by over 40 international organizations and numerous government leaders, including Prime Minister Lubbers of the Netherlands, William Reilly of the U.S. EPA, and Laurens-Jan Brinkhorst of the EC's DG XI. The Charter comprises 16 principles, of which the final one covering compliance and reporting reads as follows:

"Compliance and reporting

To measure environmental performance; to conduct regular environmental audits and assessments of compliance with company requirements, legal requirements and these principles; and periodically to provide appropriate information to the Board of Directors, shareholders, employees, the authorities and the public."

The Charter is incidentally published in 24 languages, including German, Hungarian, Polish and Russian;

2. Position Paper on Environmental Auditing. The expression "Environmental Auditing" has been widely but loosely used for a decade or more. In 1988 the ICC decided to define the term, and to encourage use of this definition and a concise supporting elaboration and model methodology. One firm principle is that audits are an internal management tool, and audit reports should be used accordingly and not regarded as a vehicle of public information. The position paper, which drew extensively on experience, has also become an international benchmark and was a key reference in the EC's recent eco-audit initiative.

3. Position Paper on Environmental Labeling Schemes/Code on Environmental Advertising The power of the consumer in leading or encouraging the business community to apply high environmental standards is very considerable, but is also dependent on satisfactory information. As guidance in this area, in 1990 we issued the first (and apparently the only) international position paper on how environmental labeling schemes could be organized and operated, assuming that the government and public opinion want such a scheme. We followed this up with a code on environmental advertising (i.e. advertising using environmental claims) at end 1991.

Our positive attitude on information is also seen, albeit less directly, in the series of nine position papers or "business briefs" prepared for UNCED, covering economics and the environment, toxic chemicals, hazardous wastes, energy and the atmosphere, biodiversity, forests, technology transfer, biotechnology, and education.

Right now we are assessing our priorities in the light of UNCED's outcome. One priority will however be preparation of a position paper on what we tentatively call "Environmental Performance Reports" which are precisely corporate information to be put in the public domain. The phraseology is still being worked out, and will benefit from input from this valuable conference. In will certainly encourage corporations to report regularly - for example in annual reports - and in an objective and quantified manner on exactly what they are doing to minimize the adverse environmental consequences on their activities processes and products. It will very likely take a view on the value of external consultants in this regard. Note that parties within the business community - for example banks, investment or holding companies, the insurance community, maybe a company's clients and sub-contractors - can have a keen interest in such information. Moreover, there is now much discussion, and some consensus, on placing more reliance on economic instruments for improved environmental management rather than undue reliance on traditional "command and control". Tradable pollution permits are one example that can presumably only work with sound disclosure procedures. A subject for your third conference.

Perhaps it is necessary to state that the Business Charter, the environmental auditing paper and our other existing and planned initiatives in this area all take compliance with regulations for granted. A key point is to engage the competitive forces within business, including "peer group pressure", to show by how much the company is managing to exceed the legal requirements.

Reasonable use of disclosure - drawing for example on the experience of the U.S. and Sweden - is clearly going to be a necessary aspect of compliance with environmental regulations throughout the world. This perhaps applies to:

* The mass of medium and smaller enterprises without extensive in-house expertise and usually without a prestigious external image to maintain;

* Countries in Eastern Europe and elsewhere with socialist planned economy systems, which meant of course that the government functioned as both regulator and operator/vested interest with results that are well known.

The ICC would incidentally stress that the same conditions of disclosure should apply to state-owned facilities as to private corporations. To conclude, we believe that the effective protection of the environment is best achieved by an appropriate combination of legislation/regulations and of policies established voluntarily by business. The self-regulatory instruments mentioned earlier are partly intended to help regulators prioritize their efforts. UNCED has spelt out the necessity of co-operation, dialogue, and trust on the basis of sound information disclosure. The business community represented by the ICC is willing to carry forward its responsibilities in this spirit.