Sustainable Development. The chemical industry

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INTERNATIONAL
COUNCIL OF
CHEMICAL
ASSOCIATIONS
SUSTAINABLE DEVELOPMENT
AND
THE CHEMICAL INDUSTRY
PURPOSE OF PAPER
The global chemical industry, as represented by the International Council of Chemical
Associations (ICCA), recognises that it should put forward an international position on
Sustainable Development - supported by local, national or regional activities. The
chemical industry wishes to take the opportunity to participate in the debate on the
actions and changes needed to achieve the goal of Sustainable Development. The
purposes of the paper are thus to:
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State the global chemical industry view on the goal of Sustainable Development
Outline the global chemical industry's share of responsibility towards this goal
Identify the contributions of the industry to fulfill this responsibility, such as,
amongst others, its Responsible Care initiative
Establish the global chemical industry as a player who can bring solutions to the
issue.
The primary audiences for this paper are the decision takers dealing with Sustainable
Development at all levels (local, national, international) and the secondary audiences
could include other industries, environmental groups and other NGO's engaged in
Sustainable Development.
OUTLINE OF PAPER
Introduction
Contribution of the Chemical Industry to Sustainable Development
The Chemical Industry's Leadership in Innovation
The Chemical Industry's Approach to:The Economic Goal of Sustainable Development
The Environmental Goal of Sustainable Development
The Society-related Goal of Sustainable Development
The Policy Challenges
Criteria for Appraising Goals and Instruments
-oOo-
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INTRODUCTION
The key finding of "Our Common Future", (the 1987 report of the United Nations' World
Commission on Environment and Development), is that environmental, economic and
social concerns must be integrated if the world's peoples are to advance and develop
without jeopardizing the natural environment on which all life depends. Although today
we cannot define the needs of future generations, the challenge for today's leaders is to
pursue policies that will leave available an array of choices for future generations to meet
their own needs.
Sustainable Development will only come about if three goals - economic, environmental
and society-related - can be reconciled. To determine the limits of acceptability and scope
for action requires a set of conventions which society at large accepts as valid.
Sustainability in economic terms means the efficient management of scarce resources as
well as a prospering industry and economy. Sustainability in the environmental sense
means not placing an intolerable load on the ecosphere and maintaining the natural basis
for life. Seen from society's viewpoint, sustainability means that human beings are the
centre of concern. In view, particularly, of the population increase worldwide, there needs
to be provided as large a measure of equal opportunities, freedom, social justice and
security as possible.
The chemical industry views Sustainable Development as a challenge put before all parts
of society. In the advances made in its own operations, its improved performance and in
the improvements to the human condition made through its products, the chemical
industry sees cause for optimism and believes that Sustainable Development can be the
intellectual framework around which the chemical industry, other industries and other
sectors of society can reach consensus on how to improve living standards and the
environment.
The main challenges facing the world include:
 Optimizing the benefits obtained from depleting resources
 Assuring against excessive strains placed on the eco-system
 The dynamic growth of the world population
 Remedying social and economic inequalities
These are challenges on a global scale. It follows, therefore, that the attainment of
Sustainable Development will call for action on the part of the people, governments,
businesses and organisations around the world. The global chemical industry has realized
this challenge.
CONTRIBUTION OF THE CHEMICAL INDUSTRY TO SUSTAINABLE
DEVELOPMENT
The chemical industry is a key industry. Its products and services are instrumental in
meeting the needs of mankind. It is present in all areas of life, from food and clothing,
housing, communications, transport - right through to leisure activities. In addition, it
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helps to solve the problems of other sectors of industry, such as the energy sector,
information technologies, environmental industries and the waste disposal sector, as
examples.
Due to its size, the chemical industry is an important supplier to a broad range of
downstream industries and is, as well, a customer of a broad range of products and
services from other industries. It follows, therefore, that the chemical industry plays a
major role in providing/ supporting performance improvements, research and
development progress and, last but not least, employment in other industries.
In itself, it is a large-scale provider of jobs and makes a significant contribution to wealth
creation and, hence, to the financing of both public works and the exercise of public
responsibilities. Since living standards are determined to a large degree by material
considerations, it is clear that the chemical industry with its unique capabilities is in a
position to make a decisive contribution to Sustainable Development.
Commitment by the world chemical industry to the concept of Sustainable Development
requires words to be transposed into company-specific action programmes in order to
provide a framework for all those working in the sector. Its "Responsible Care" initiative,
self-monitoring systems and other voluntary programmes such as Sustainable
Technology (SUSTECH), Education-Industry Partnerships, Energy Efficiency
Programmes are also part of this framework. Thereby, companies are also confronted
with new challenges and must act responsibly. They must take account of the
consequences of their actions upon society and future generations.
The global chemical industry believes that the key to improving the performance of the
industry is both its commitment to achieving environmentally sound Sustainable
Development and improved performance and transparency. Under the concept of
"Responsible Care", chemical companies are committed, in all aspects of safety, health
and protection of the environment, to seek continuous improvement in performance, to
educate all staff and work with customers and communities regarding product use and
overall operation. Through these efforts the industry is improving its efficiency, reducing
risks to health and the environment and making better products which, in turn, help
individual and industry customers.
THE CHEMICAL INDUSTRY's LEADERSHIP IN INNOVATION
The very notion of Sustainable Development will require new approaches in a number of
areas. Innovation at all levels and in all fields of activity is the most effective instrument
for ensuring that the economic, and environmental goals, as well as those of society, are
being advanced.
The chemical industry's contribution is to continue innovation of new products that meet
customer needs and manufacturing processes that reduce risks to health and the
environment. This contribution is based upon the knowledge and experience the industry
has acquired from applying innovation not only to making, handling and use of chemical
compounds, but also to reprocessing, recycling and solving environmental problems. The
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challenge facing the chemical industry is to maximize innovation, which can contribute
to society meeting its goals for Sustainable Development.
The chemical industry is firmly convinced that leadership in innovation represents the
best way of attaining Sustainable Development. For the individual company, this means:
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a consistent orientation towards products, technologies and solutions which offer
the greatest promise for the future
development of new integrated environmental technologies
a close cooperation with the customers of the chemical industry
adaptation to the conditions of global competition
bringing the most promising products quickly on the market
strengthening the R&D effort which requires resources which can only be
financed from profitable earnings
actively contributing ideas and suggestions to the policy debates taking place in
society
improving process yield (efficiency).
APPROACH TO THE ECONOMIC GOAL OF SUSTAINABLE DEVELOPMENT
The internationalization of the economy at large, in conjunction with a growing trend
towards global competition, is becoming more and more apparent. This is being
manifested by:
 an increase of imports and exports of goods as well as services
 growing outward and inward flows of direct investment
 an ever increasing exchange of technology transfers
 globalization of monetary and financial schemes.
The inter-relation of economic systems is complex, with a variety of relationships among
countries. Multi-national chemical companies apply common standards in spreading
investment capital and stimulating markets around the globe, thus setting the scene for
the world market. What they need, in order to play a constructive role in Sustainable
Development, is, first and foremost, freedom and fairness in international trade. Trade as
an engine of economic growth is essential for Sustainable Development. A climate needs
to be fostered within which such growth may take place on the basis of a clear set of rules
with predictable consequences, by which investors may be guided in their long-term
decision-making process. This includes bringing to a halt the growing intervention by
governments in industry and their ever increasing demands to raise income by taxation,
thus imposing a disproportionate load on the business community.
Wealth creation and profits are fundamental to Sustainable Development. They sustain
economies (not just the chemical industry), and contribute, via re-investment and R&D,
to new technologies and environmental improvements. Profits are needed to create
flexible company structures oriented towards economic, environmental and societyrelated requirements.
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The chemical industry is a major industrial sector and an essential contributor to welfare
and employment on a global scale. In order to maintain this position under the imperative
of Sustainable Development, the long-term future of the industry must be rooted in a
dynamic policy, whereby continual innovation and re-engineering of companies result in
an increase of productivity and, thus, keeping up international competitiveness as a prerequisite of sustainable job creation.
Because it operates on a global scale, the chemical industry makes an important
contribution to the attainment of economic goals. The advancement of the world
economy along Sustainable Development lines will be influenced positively by:
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the transfer to other countries or parties (particularly in the developing world) of
efficient technologies, together with high environmental, health and safety
standards
comparable standards worldwide, applying to the industry's operations in other
countries
monitoring to ensure that equivalent and acceptable standards are being achieved
worldwide
improving education and training and furthering the knowledge of staff and
customers by means of training courses, again organised at the industry's plants
and offices in other countries.
Whilst the chemical industry thus feels it has an important role to play in contributing to
the establishment of an appropriate economic framework, the power to decide this lies
with the regulators.
APPROACH TO
DEVELOPMENT
THE
ENVIRONMENTAL
GOAL
OF
SUSTAINABLE
In order to take environmental protection further, environmental standards need to be set
to serve as parameters - established within the framework of a market economy. It is then
up to each industry to determine how these standards are to be attained within its sector.
For the chemical industry, the following parameters are relevant:
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Scientific-environmental monitoring systems are of particular importance. Such
scientific- environmental monitoring systems must be systematically and
scientifically backed up.
The chosen integrated approach to environmental protection and waste
minimisation must be developed in a consistent manner. The aim must be to
integrate environmental protection considerations into products and processes as
early as possible in the development phase. Integrated environmental protection
also enhances plant and product safety and allows waste disposal to be improved
and made more efficient. This parameter clearly meets the Product Stewardship
Code of the chemical industry's "Responsible Care" initiative.
Energy costs are crucial to the chemical industry. Since a policy of economically
and environmentally optimised materials and energy use is in the best interest of
the individual company, the company itself should assume the responsibility for
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implementation. As well as ensuring an environmentally and economically sound
attitude towards scarce resources - and helping to husband those resources - the
policy also makes provision, as said, for the re-use of recycling of used substances
and products. The chemical industry is already working on these aspects in close
cooperation with its customers and consumer organisations.
Competitive access to energy is necessary to the chemical industry. Since the
reservoir of natural resources is finite, their proper management is a crucial pillar
of Sustainable Development. The chemical industry is contributing to this goal by
continuously reducing the environmental impact of its activities. Perhaps, more
importantly, the products of the chemical industry's innovation enable other
industries to use resources more efficiently with less environmental impact.
In order to achieve these aims, industry requires a worldwide politico-economic
framework applied by Governments, which facilitates decision-taking within companies
and not a dirigiste approach. Any attempt to impose centralised control over entire
substance chains from cradle to grave would simply not work.
APPROACH TO THE SOCIETY-RELATED GOAL OF SUSTAINABLE
DEVELOPMENT
The chemical industry considers a functioning, pragmatic social partnership to be a key
factor in Sustainable Development. This form of cooperation is the best way of allowing
a company to compete effectively in the global market place and prosper, thus making it
possible to ensure the future, safeguard jobs in the long term, give proper recognition to
performance, be consistent in labour protection and show concern for the problems of
developing countries.
Current needs of society must be defined by society itself acting through the various
audiences involved, who will be affected by the definition, in a genuine process of
consensus-building. Public discussion can frequently tend to lack focus. What is needed
is a constructive form of debate within society. The chemical industry has to demonstrate
its willingness to be publicly responsible for its contribution to Sustainable Development.
The results of efforts to achieve consensus will be influenced to a significant extent by
the differences in the way the partners involved in the debate perceive the risks. Whether
these perceptions are "rational" or not, they need to be addressed. For this reason, the
chemical industry attaches considerable importance to environmental reporting and risk
communication and recognises that there is an urgent need to debate these issues openly
within society.
Efforts to move towards Sustainable Development will be to no avail unless consensus
can be reached within society. The task of politicians and the political parties must
therefore be to encourage cohesion within society and to marshal the forces of society
behind this goal.
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THE POLICY CHALLENGES
The chemical industry is convinced that advances along the path of Sustainable
Development are possible only in the context of a market economy and by way of a
collective learning process involving all members of society. The chemical industry
therefore calls for policies which guarantee the maintenance of the market economy
framework. Within this framework, the best means of attaining our goals is via a
combination of legislation, voluntary measures and market forces. Those who will be
directly affected must participate in the process, thereby guaranteeing that realistic targets
are set and that sufficient time is provided for their implementation.
Establishing an environmental policy compatible with a market economy is not a matter
of drafting detailed regulations but of setting transparent, attainable environmental policy
goals. In practice, the fixing of environmental standards must be the outcome of a process
of opinion-forming and consensus-seeking within society. The long-term interests of
society, however, depend upon this process being as well informed as possible about
current science. This gives them the status of environmental conventions which, as a set
of strategies, cannot be static but must respond to changes and trends within both science
and society.
Economic policies must create an environment conducive to structural change. There can
be no artificial propping up of economically outdated structures. The effects on the
distribution of incomes and on employment, however, must be given proper
consideration at the national level. Society must be given time to adjust to structural
change.
Given the nature and importance of the problems, a "go-it-alone" national approach is not
enough. There should be no unilateral measures applied to achieve an environmental
objective outside one country's borders. We would therefore wish to see national policies
to foster Sustainable Development implemented in most countries worldwide. Countries
must strive for harmonization or, at least, convergence of environmental goals. This can
only be achieved through international cooperation.
The most important tasks of economic and social policies include the need to:
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secure the framework for the market economy by discouraging state interventions
promote freedom and fairness in international trade
improve international competitiveness by
o facilitating restructuring of industries
o reducing burdens causing uncompetitive costs (labour, energy)
o fostering the scientific and technological base
promote rational regulatory and environmental policies based on sound science
whilst allowing voluntary approaches
develop a clear set of rules with predictable consequences in the long run.
Moreover, the structural change involved in the move towards Sustainable Development
calls for close cooperation within and between all major policy areas - i.e. measures must
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be co-ordinated, non-contradictory and in line with the overall goals. Those responsible
for individual policy areas will need to set their own priorities accordingly.
The task of research and development policy should be to co-ordinate aims and focal
points for research. In future, the success of research and technology policies will to a
large degree depend on the extent to which a consensus can be arrived at between
innovative potential - whether it be that of companies, research institutes or universities and the concerns of the other groups and forces within society, and hence give impetus to
creative competition. In order to be successful, activities in these areas must be integrated
into a worldwide network of scientific and information exchange.
Sustainable Development presupposes the existence of an efficient education and training
system. Education and training policy must help to pass on the relevant knowledge and
an awareness of the problems on the basis of proven scientific knowledge, fostering an
ability and willingness to make the necessary changes in economy and society. The
concept of Sustainable Development has a strong appeal for young people and is well
suited also to the international context.
CRITERIA FOR APPRAISING GOALS AND INSTRUMENTS
Because the three stated aspects of Sustainable Development (economic, environmental,
society-related) are inseparable, attainment of the goals will generally call for a package
of instruments. Since action limited to one country cannot do justice to the global goals of
Sustainable Development, international harmonisation of the political and policy
framework will be decisive for success.
A fundamental prerequisite is agreement not only on the specific goals and the manner in
which they are to be attained through national policies, but also - and above all - on
international programmes and decision-making processes. However, it serves no purpose
to determine the means unless the end is also made clear - i.e. there is no point in
encouraging or supporting the use of specific instruments without defining beforehand
the goal one is seeking to reach.
Moreover, conflicts between different goals must be resolved before individual measures
can be put into effect. Given the complexity of the issues, it will be necessary to
undertake case-by-case studies of appropriate combinations of goals and measures.
The goals, methods and instruments must satisfy the following criteria:
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The goals must be set realistically and should neither overestimate nor overstrain
the capabilities or absorption capacity of the system (practicability).
In an overall appraisal on the basis of economic, technical, environmental criteria
and social acceptability, the effort involved must be in proportion to the desired
result (proportionality).
The goals and measures must be designed in such a way that they can be tailored
to meet changes in requirements (flexibility).
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There must be some provision for retracting certain goals or reversing individual
instruments, if new facts come to light or if they produce unintended adverse
effects (reversibility).
The goals and instruments must not run counter to the principle of equal treatment
nor, even more importantly, jeopardise equal opportunities in international
competition (competitive neutrality) and should be taken at the most appropriate
level.
The means and methods selected must comply with the laws of the market and not
interfere with fundamental rights. Therefore, there can be no alternative to responsible
action not only on the part of companies but also by the individual citizen within the
framework of the goals set by Governments.
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