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Published Date: May 15, 2000

Recommendations for Pakistan’s Position Regarding Future WTO Ministerials (p-28)

Faisal Haq Shaheen, SDPI


Dr. Shahrukh Rafi Khan opened the session with a background on trade and environment issues within the context of global trade.  While disagreement amongst the developed nations led to the stalemate in Seattle, an alliance in the North is bad for the South as social and labor issues will be pushed with unified force.  The unfortunate aspect for the NGOs in the South is that we were at odds with the environmental groups of the North, who were pushing for the inclusion of environmental and labor linkages in the agreements.  At the market end, the private sector pushes the linkages as a result of pressure from more environmentally aware shareholders and consumers.  While a more aware South is resisting the inclusion of labor and environmental clauses within the talks, the reality is that they are here to stay and Pakistan needs to be proactive about dealing with them.  Pressure to increase export earnings also confronts Pakistan as foreign exchange reserves are very low.  Meeting standards opens up the possibility of retaining existing markets and breaking into new ones, specifically niche markets.

Standards for management systems (ISO 14,000) need to be incorporated and made consistent with our own national environmental quality standards.  Apart from winning new markets and niche markets, there are several other advantages to adopting such a strategy.  First, environmental costs are disproportionately born by the poor and vulnerable.  Second, if would reduce production costs as firms engage in resource conservation and recycling.

Research in Pakistan shows that the costs of mitigation are not as high as commonly believed.  While certification is being subsidized by the government (900 in total are participating in this initiative), capable Government Organizations should certify to ISO 14000 and 9000.  Firms need to be made aware that certifying for ISO 14,000 is a natural progression from ISO 9,000.  Also, registrars in Pakistan need to be instituted to monitor and establish the credibility of the auditing process and ISO culture in Pakistan. Long-term subsidies need to be eliminated in the long run even though they may be useful in the short run.  Small and medium sized industries need to be included by the state in the efforts to establish standards.

Minister Omer Asgher Khan then made his introductory remarks.  He indicated that the Ministry of Environment has been working with other economic ministries in increasing awareness (including the Ministry of Commerce and the Ministry of Finance).  Private sector manufacturers are also being addressed.  The employers federation feels a need to improve labor standards, as bi lateral talks between unions and employers have begun.  While the Chambers of Commerce are trade dominated, not well represented by the manufacturers, the Ministry of Environment is trying to facilitate the process of sensitizing them to trade and environment issues and concerns.  Foreign investors are starting to show interest once again in Pakistan and resource intensive efforts need to be made towards orienting the trade regime towards environmental concerns and market demands (eco labeling, its transparency, what is the role of developing countries).  Some questions that the Ministry of Environment is asking in developing its strategy are ‘how do we raise consumer awareness?’ and ‘how do we include civil society and other stakeholders in this process of establishing standards?’.  Pakistan needs to move away from knee jerk reactions and be more proactive towards popular issues.  Most importantly, the poor are the victims of environmental degradation and we need to increase attention to the issues of land degradation and water pollution.  As residents and fishermen have lost livelihoods due to pollution, there is a national interest in improving the environment.

The problem partially lies with the state and its institutions.  Enforcing laws in terms of the NEQS is a difficult as the EPAs are undermanned and there are only two tribunals per year.  We need to bring aboard the private sector in a co-operative manner, as punitive measures are not enough.  The concept of self-reporting by the private sector may be feasible in some scenarios.  Lack of transparency, preparedness and capacities are also part of the problem.  While we have firms that are certified to ISO 14,000, we need to further this process.  We need to publicize what is being achieved and communicate to other industry players that the systems actually work and provide positive returns.  We need to find ways to target SME’s in particular, as they are not part of major forums.  Information dissemination is also critical, especially to the informal part of the economy.