WSSD - Australian National Assessment Report

Environment Australia
ISBN 0 642 54855 2

3. Institutions, Processes, Decision-Making, Accountability

Australia has recognised that the support of the community as a whole is needed to implement our solutions to sustainable development and therefore that it is necessary to involve all stakeholders in devising those solutions. Industry is increasingly recognising that maintaining ecological processes and considering human impacts are as much their concern as profitably utilising resources, and contributing to economic growth. Indeed, there is now widespread appreciation in the industry sector that ecologically sustainable business practice is ultimately necessary to the viability of their resource use and the communities upon which it depends. Government departments, regardless of their core concerns, are also learning to consider the environmental, economic, and social concerns, in all their internal processes. Australians, as a whole, are increasingly coming to appreciate that sustainable development cannot be achieved without some costs and considerable effort, and that the burden of these must be shared equitably across the entire community.

3.1 Institutions

3.1.1 Establishment of Cross-sectoral Agencies

The initiatives described in the first chapter of this Report established Australia's approach to sustainable development - involving all stakeholders in the consensual resolution of competing environmental, economic and social interests. Within Government itself, there has also been a systematic breaking down of the departmental territorial mentality, with the creation of organisations with a sustainability agenda 'built-in'. There has been a broadening of the plans and charters, visions, missions, goals, aims and objectives of existing Federal Government and some State Government agencies to include environmental, economic and social values, as well as the traditional core business of the Department, and to refer directly to sustainable development in organisational objectives.

More recently, organisations such as the Australian Greenhouse Office and the National Oceans Office have been set up with requirements to address multiple policy objectives.

The Australian Greenhouse Office reports to the Minister for the Environment and Heritage and receives strategic policy direction from the Sustainable Environment Committee which comprises the Prime Minister; Minister for Transport and Regional Services; Minister for the Environment and Heritage; Minister for Agriculture, Fisheries and Forestry; Minister for Education, Science and Training; Minister for Industry, Tourism and Resources; and Minister for Forestry and Conservation. Its Corporate Plan identifies ecologically sustainable development as one of its "outcomes sought". It recognises working with stakeholders as "fundamentally important" to achieving its mission of "leading Australia's greenhouse action to achieve effective and sustainable results" and identifies "the need to promote effective environmental responses that are economically viable" as essential to working with its stakeholders.

The National Oceans Office provides a secretariat to the National Oceans Ministerial Board, the National Oceans Advisory Group and Regional Marine Plan Steering Committees. One of its primary roles is to coordinate the development of Regional Marine Plans. Regional Marine Plans integrate across economic, environmental, social and cultural objectives. The National Oceans Ministerial Board consists of Federal Ministers responsible for Environment (Chair), Fisheries, Resources, Shipping, Tourism and Science, with other relevant Ministers co-opted for specific issues, such as defence and foreign affairs.

Box 2: Examples of broadening of Departmental Objectives

  • Environment Australia's "Vision Statement" describes a harmony of environmental protection and national social and economic goals. Its "Mission" includes promoting, supporting and implementing "conservation and sustainable development and use of Australia's land, water, coasts and oceans".
  • In it 1999-2000 Annual Report, the Department of Agriculture, Fisheries and Forestry Australia identified its Portfolio Outcome for the year as "more sustainable, competitive and profitable Australian agricultural, food, fisheries and forestry industries."
  • AusAID, which administers Australia's overseas aid program identifies the objective of the aid program as "to advance Australia's national interest in assisting developing countries to reduce poverty and achieve sustainable development".
  • The goal of the Great Barrier Reef Marine Park Authority is "to provide for the protection, wise use, understanding and enjoyment" of the Reef while the aims of the Authority include, among a range of other objectives, providing for "reasonable use" and "economic development consistent with meeting the goal and aims of the Authority".
  • The NSW Environment Protection Authority includes, as one of several environmental principles, that "ecologically sustainable development guides decision-making".

3.1.2 Cross-sectoral Programs - the Natural Heritage Trust

In a similar way, although not a separate organisation, the government's Natural Heritage Trust is administered by a Ministerial Board comprising the Minister for the Environment and Heritage and the Minister for Agriculture, Fisheries and Forestry. Collectively, the programs of the Natural Heritage Trust constitute the largest ever suite of biodiversity conservation, sustainable development and natural resource management initiatives in Australian history. The Natural Heritage Trust focuses on five key environmental themes - land, vegetation, rivers, coasts and marine, and biodiversity - funding environmental activities at a community level, a regional level, a State/Territory level and at a national level.

In terms of its structure and operation, the Natural Heritage Trust Ministerial Board administers the programs covered by the Trust at the Federal level. Advice is provided to the Board by a range of experts such as the Australian Landcare Council, the Biological Diversity Advisory Council, the Endangered Species Advisory Committee, and the Council for Sustainable Vegetation Management.

Box 3: Principles of the Natural Heritage Trust

The Natural Heritage Trust is managed in accordance with the following principles:

  • Trust investment is used to stimulate significant improvement and greater integration of biodiversity, land, water and vegetation management on public and private land;
  • Trust funds are used to address the causes of problems rather than their symptoms;
  • interaction between local communities and government agencies is transparent, integrated and readily understood;
  • the Trust encourages management systems that bring long-term environmental, economic and social benefits;
  • because they have prime responsibility for managing their land, individual landholders are encouraged to make the necessary investments to achieve high standards of performance in natural resource and environmental management; and
  • the States and Territories have primary constitutional responsibility for natural resource and environmental management, in keeping with the goals of the National Strategy for Ecologically Sustainable Development.

The Natural Heritage Trust draws together a number of complementary programs such as Landcare, Bushcare, Rivercare and Coastcare, as well as programs for the protection of our national reserves, World Heritage properties and endangered species. The Federal Government and each State and Territory enter into formal agreements on managing the Trust. The State/Territory Component identifies the agreed natural resource and environmental investment priorities in each State and Territory, and State and Territory governments complement Federal Government funding for Trust programs.

The Natural Heritage Trust represents a partnership between the Federal and State Governments, which in turn funds partnerships between government and the community, and is overseen by a partnership of Commonwealth Ministers representing interested portfolios. As such, it is a very deliberate attempt to deliver tangibly improved environmental outcomes by engaging all stakeholders in projects while allowing them to represent their own social and economic interests.

The Trust has facilitated a comprehensive and holistic approach to natural resource management in Australia, which has raised awareness of need to achieve integrated economic, social and environmental sustainability benefits.

3.2 Processes and Decision-making

3.2.1 Whole of Government Policy Processes

Because sustainable development involves economic and social issues as well as environmental and natural resource management issues, it relates directly or indirectly to the policies of most if not all Ministries at both the Federal and State/Territory levels of government. Emphasis on whole of government processes involving the agreement of Cabinet is therefore often essential to decision-making on sustainable development issues. At the Federal level in recent years, it has been the Environment Minister who has tended to take the lead in obtaining the agreement of his/her Cabinet colleagues in relation to sustainable development, with the notable exceptions of the Council of Australian Governments' water reforms and National Action Plan on Salinity and Water Quality, where the Prime Minister took the lead. In some States (such as NSW), it is usually the Premier (and his Department) who takes the lead.

3.2.2 National Policy Processes

The Australian Constitution does not give the Federal Government direct legislative power over the environment. The Federal Government's environmental powers arise from its capacity to legislate on trade, external affairs, corporations and taxation. During the late 1990s Australia's federal and state governments finalised a negotiated resolution of their respective environmental roles and responsibilities, contained in the 1997 Council of Australian Government - Heads of Agreement on Commonwealth/State Roles and Responsibilities for the Environment. The Federal Government, all State and Territory Governments and the Australian Local Government Association were signatories to the Agreement. This Agreement also made it possible for the first time to establish a clear legislative basis for the federal government to deliver on its responsibilities in respect of environmental issues of national significance (as set out in the Agreement, they are World Heritage Properties, Ramsar wetlands of international importance, listed threatened species and communities, migratory species protected under international agreements, nuclear actions and the Commonwealth marine environment). Much of the Federal Government's power under this new legislation - the Environment Protection and Biodiversity Protection Act 1999 - derives from the Federal Government's constitutional responsibility for implementing international treaties and agreements.

Shared State and Federal environmental priorities have traditionally been progressed through Councils of Federal and State/Territory Ministers responsible for similar portfolios: for example the Australian and New Zealand Environmental and Conservation Council on environmental and conservation policy issues, the National Environmental Protection Council on environment protection regulation issues and the Agriculture and Resource Ministers' Council of Australia and New Zealand on natural resource management issues.

Australia has increasingly found it more effective to shift away from portfolio-based policies and programs to purpose-based policies and programs, which aim to advance sustainable development. This is reflected in the recent amalgamation of the conservation concerns of the Australian and New Zealand Environment and Conservation Council and the resource management concerns of the Agriculture and Resource Management Council of Australia and New Zealand and the Ministerial Council on Fisheries, Forestry and Aquaculture into a Natural Resource Management Ministerial Council. The new Environment Protection and Heritage Council subsumes environmental protection issues covered by the environment Ministers and heritage policy issues covered by other Heritage Councils, and joins with the National Environment Protection Council which has responsibility for environmental protection legislation. A separate Council again deals with agricultural production and trade issues.

3.2.3 Economic Instruments

The Federal Government's constitutional responsibility for certain taxation powers allows it to influence some pricing regimes in ways designed to protect ecological systems and prevent the unsustainable use of resources. However, there are practical and political limitations on the Federal Government's capacity to apply these powers. The preferred application in Australia has been in the context of cooperative approaches with other jurisdictions, engaging economic instruments in nationally agreed strategies to which all governments are signatory. There has, to date, been considerable difficulty gaining national agreement on the use of economic instruments and pricing regimes to better manage resources.

One case where all jurisdictions, through the Council of Australian Governments, have agreed to the use of pricing regimes for sustainably managing a natural resource is the National Agenda for Water Reform. In this case the reform involved the removal of an implicit subsidy with the re-pricing of water to reflect the full economic cost of the resource, taking into account the necessity of maintaining environmental flows. The Council of Australian Governments water reforms are an example of the way in which, with whole of government agreement, economic instruments can be used to achieve economic and environmental objectives while taking account of social objectives. This case is dealt with in greater detail below under Chapter 5.

Another use of economic instruments was the Lead Abatement Strategy which introduced a small but significant and consistent price differential between leaded and unleaded petrol. The Strategy was very successful in reducing the quantity of leaded petrol being used but was not a complete example of sustainable development in that it did not set out to address the social equity impacts of the price differential. Low income earners, who were the main users of cars which are unable to use unleaded petrol, were not in a position to upgrade their cars to newer models that used unleaded petrol and they were also those who could least afford the higher price of leaded petrol. However, the price differential was not excessive and allowed for the gradual phase-out and replacement of leaded petrol with lead replacement petrol. Additionally, considerable guidance was provided to drivers of older cars to allow them to make use of the cheaper unleaded petrol to the extent possible.

There is potential for more application of economic instruments to deliver sustainable development outcomes. In Australia one area of considerable potential is in establishing market incentives or disincentives for encouraging sustainable agricultural practices. In this regard, the Federal Government has recently announced plans to reduce capital gains tax liability so as not to disadvantage landholders who place a perpetual conservation covenant on their land for its protection.

Local government is another area of significant potential. For example, councils may be financially driven, sometimes by State Government rate capping policies, to develop remnant bushland because they need the land to be owned so that its owners can pay rates. Alternative economic measures could be developed to encourage local government to restrict urban development in parkland and remnant bushland. This is one of many examples which are receiving increased attention as the attractions of economic instruments in addressing sustainability issues becomes more widely appreciated.

The Australian Greenhouse Office has, in close consultation with industry and other stakeholders, conducted a thorough investigation of the options for designing and operating a domestic greenhouse emissions trading program. The Federal Government considers that emissions trading has the potential to enhance Australia's capacity to reduce greenhouse gas emissions. Despite uncertainties over the implementation of emissions trading internationally, there is growing interest by Australian industry in building capacity to take advantage of emissions trading and other market mechanisms.

3.2.4 Legislation

Since Rio, federal legislation is increasingly written with a much greater appreciation of sustainable development imperatives. The Environment Protection and Biodiversity Conservation Act 1999, the Natural Heritage Trust of Australia Act 1997, the Gene Technology Act 2000 and the National Environment Protection Council Act 1994 are written with explicit reference to the objectives or principles of sustainable development.

The Environment Protection and Biodiversity Conservation Act explicitly includes as one of its objectives "to promote ecologically sustainable development through the conservation and ecologically sustainable use of natural resources". It goes on to define the principles of ESD as follows:

  • decision-making processes should effectively integrate both long-term and short-term economic, environmental, social and equitable considerations;
  • if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation;
  • the principle of inter-generational equity-that the present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;
  • the conservation of biological diversity and ecological integrity should be a fundamental consideration in decision-making;
  • improved valuation, pricing and incentive mechanisms should be promoted.

The Natural Heritage Trust Act includes complementary environment protection, natural resource management and sustainable agriculture outcomes among its key objectives. Sustainable agriculture is defined as: 'the use of agricultural practices and systems that maintain or improve:

  • the economic viability of agricultural production;
  • the social viability and well-being of rural communities;
  • the ecologically sustainable use of Australia's biodiversity;
  • the natural resource base;
  • ecosystems that are influenced by agricultural activities.

The precautionary principle is clearly enshrined in the newly established Gene Technology Act. The object of the Act (Section 4) ('to protect the health and safety of people, and to protect the environment, by identifying risks posed by or as a result of gene technology, and by managing those risks through regulating certain dealings with GMOs') is to be achieved through a regulatory framework which, "provides that where there are threats of serious or irreversible environmental damage, a lack of full scientific certainty should not be used as a reason for postponing cost-effective measures to prevent environmental degradation".

The National Environment Protection Council Act is another example of integration of sustainable development objectives. The National Environment Protection Council was established in the mid 1990s in order to develop measures which extended nationally consistent levels of environmental protection across Australia. The National Environment Protection Council Act requires that in making any new Measure, the Council considers environmental, social and economic impacts.

At the State level, NSW, Queensland and South Australia have incorporated ESD principles in their environmental protection legislation.

Box 4: Sustainable Development in State Legislation

The NSW Protection of the Environment Administration Act 1991 gives one of the two objectives of the Environment Protection Authority as "to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development", defining ESD in this context in considerable detail. The NSW definition includes the fundamental importance of biodiversity and ecological systems, the Precautionary Principle, inter-generational equity and the effective integration of economic and environmental considerations in decision-making processes.

Queensland's Environmental Protection Act 1994 gives as its object: "to protect Queensland's environment while allowing for development that improves the total quality of life, both now and in the future, in a way that maintains the ecological processes on which life depends ("ecologically sustainable development" )."

Similarly, the object of South Australia's Environment Protection Act 1993 is to promote the principles of ecologically sustainable development: "that the use, development and protection of the environment should be managed in a way, and at a rate, that will enable people and communities to provide for their economic, social and physical well-being and for their health and safety while sustaining the potential of natural and physical resources to meet the reasonably foreseeable needs of future."

In addition to specific pieces of legislation which refer to ESD principles, since 1997 any new federal regulation or proposed change to an existing regulation which has a direct effect on business, restricts competition or substantially alters existing arrangements, requires a regulation impact statement. "Regulation" in this case includes legislation, international treaties, industry codes of practice, guidance notes and industry-government agreements. A Regulation Impact Statement must provide an analysis of the problem the regulation is designed to address, the objectives of the regulation, options for meeting the objectives, and the impact of the costs and benefits of each option on consumers, business, government and the community. The analysis of the costs and benefits includes an assessment of the economic, environmental, financial, health and safety, and other non-monetary impacts of the proposed regulation.

Thus the Regulation Impact Statement process provides a good basis for the assessment of sustainable development implications. The role of the Regulation Impact Statement in addressing sustainability is likely to become more formal following a recent Productivity Commission Report to the Federal Government. It included a recommendation that there be a specific reference in Regulation Impact Statements to assess the short and long term social, economic and environmental costs and benefits of regulation. The Government has agreed to this recommendation.

In sum, there has been a concerted movement in Australia for legislative processes to take greater account of sustainable development objectives. This process of integrating economic, social and environmental objectives is not complete, but substantial advances have been made since 1992.

3.2.5 The Community Partnerships Approach to Program Management

Involving everyone who has a stake in the environmental, economic or social implications of an issue in solving the problem of how to sustain the environment, the economy and social well-being is a first principle of sustainable development in both Agenda 21 and the Australian National Strategy for Ecologically Sustainable Development. It is now firmly established in Australian processes.

There are a number of reasons why sustainable development requires us to involve both specific stakeholders and the entire community. Community ownership and commitment to a solution is essential if the solution is to be implemented and enforceable on the ground. Furthermore, involving all stakeholders is one way of ensuring that the environmental, social and economic considerations are represented in the debate, and that the different interests listen to each other and see the issues through other's eyes. Thirdly, because this partnership approach can generate additional contributions from non-government parties, the process is likely to stretch government dollars much further than government programs imposed "from above".

The Federal Government works in partnership with Australian companies to improve their environmental performance by promoting eco-efficiency and its benefits for business and the environment. Eco-efficiency involves improving the resource and energy efficiency of industrial operations so as to simultaneously reduce adverse environmental impacts and business costs. Eco-efficiency tools are being developed and promoted by government and industry to help companies assess, improve and report on their environmental performance.

Through a range of programs under the Natural Heritage Trust, the Federal Government funds landholders, land managers and community groups to undertake projects to protect and conserve local environments, especially rural environments. The Natural Heritage Trust has created constructive and cooperative partnerships on environment and resource management between all levels of government, the community, private sector individuals and organisations, and research and scientific practitioners and institutions.

Box 5: Examples of Government-Industry Partnerships

The WasteWise program is designed to reduce the amount of construction waste going to landfill and to thereby save money for the construction industry. Under the WasteWise program, businesses sign a voluntary agreement with the Federal Government to:

  • conduct waste reduction trials in their operations;
  • develop and adopt best practice waste reduction techniques;
  • share techniques with other operators in the industry;
  • identify the legal barriers to carrying out best practice waste reduction; and
  • become involved in the development of industry and nation wide waste reduction arrangements.

Eco-Efficiency Agreements between Australian industry associations and the Federal Government: Eco-Efficiency Agreements are voluntary, three year agreements. Their content is flexible and tailored to the needs and requirements of different industries and sectors. To date, the Federal Government has signed 21 Eco-efficiency Agreements with, among others, the Housing Industry Association, the Australian Food and Grocery Council and the Australian Chamber of Commerce and Industry.

Greenhouse Challenge: The Greenhouse Challenge, launched in 1995, is a joint voluntary initiative between the national Government and industry to abate greenhouse gas emissions. Participating organisations sign agreements with the Government that provide a framework for undertaking and reporting on actions to abate emissions.

The National Action Plan for Salinity and Water Quality also facilitates partnerships between all levels of government, community groups, individual land managers and local businesses, for regional solutions to salinity and water quality problems. The centrepiece of the Action Plan is community-based regional bodies that will develop and implement integrated catchment or regional natural resource management plans, relevant to their regions.

Box 6: Examples of Government-Community Partnerships

The Coastcare program assists local communities to form partnerships with local land managers to undertake projects that aim to improve and protect coastal and marine habitats. The Federal and State and Territory Governments provide matching funding for Coastcare community grants while Local Government provides financial and in kind support for Coastcare projects. The focus of Coastcare is to assist on-ground work such as protecting, rehabilitating and monitoring dunes, estuaries, wetlands and other coastal and marine habitats, developing management plans and community education and training activities.

Waterwatch Australia is a national community water monitoring program that encourages all Australians to become involved and active in the protection and management of their waterways and catchments. It involves nearly 3000 groups in 200 Catchments with regular monitoring occurring at approximately 5,000 sites nationally. The Waterwatch network is made up of individuals, community groups and school groups who undertake a variety of biological and habitat assessments and physical and chemical tests to build up a picture of the health of local waterways and catchments. It is a reflection of the grassroots community enthusiasm which government programs can tap into and in doing so magnify the environmental benefit.

The Federal Government is also working in partnership with local government through its Environmental Resource Officer and Local Agenda 21 programs to promote sustainable development at the local government level.

Box 7: Federal-Local Government Partnerships

With funding provided by the federal government, the Environmental Resource Officer Scheme places dedicated officers in the peak local government associations in each State and the Australian Local Government Association, to assist councils to better manage their local environments, especially through improved take-up of Federal programs.

The Local Agenda 21 program assists local governments to apply the framework from Agenda 21 for local government in order to integrate environmental, economic and social objectives. Elements of the Local Agenda 21 Program include: a National Local Leaders in Sustainability Forum, corresponding State and Territory fora, pilot projects to test regional approaches to sustainable development and to develop appropriate models for the implementation of Local Agenda 21 on a regional basis, a Local Agenda 21 Award, and a national Local Agenda 21 Conference. The Federal Government is also developing a national framework of milestones for adoption and use of Local Agenda 21 by local government.

The Environment Protection and Biodiversity Conservation Act specifies opportunities for public involvement throughout the body of the Act (rather than including community and stakeholder consultation as one of its principles of ecologically sustainable development). In fact it allows for an unusually high level of public involvement in its administration. Opportunities exist for the public to contribute to: environmental impact assessments and their enforcement; the making and enforcing of bilateral agreements; the making of conservation agreements; the declaration and management of protected areas; and the enforcement of the biodiversity protection and protected areas provisions of the Act.

For example, it provides for interested persons to apply to the Federal Court for an injunction to halt an activity which may constitute an offence under the Act. In a recent landmark decision, the Federal Court granted an injunction to prevent a Queensland farmer from electrocuting thousands of flying foxes (bats) on his farm on the grounds that the electrocution of the spectacled flying foxes was having a significant impact on the World Heritage values of the adjacent Wet Tropics World Heritage Area.

The Act also includes requirements to make information public.

3.3 Accountability

Internalising the principles of sustainable development in government decision-making processes is of little consequence unless it can be demonstrated that such reform is actually making a difference. Recognising this, Australia has put in place several mechanisms for measuring our national progress towards sustainability.

3.3.1 Government Reporting

There is a requirement under the Environment Protection and Biodiversity Conservation Act for the Federal Government to produce a National State of the Environment (SoE) Report every five years. The SoE Report does not measure sustainability, in that it does not measure whether the social and economic values that we want to sustain (along with a healthy environment) are being sustained. However, it does provide a comprehensive account of whether or not we are sustaining the environment on which all our social and economic values ultimately depend. The first SoE Report was published in 1996 and a second Report, providing data for about 370 indicators, has now been published in 2002.

The SoE Report draws, for some of its indicators, on a comprehensive National Land and Water Resources Audit commenced in 1997. The National Land and Water Resources Audit is discussed in greater detail later in this Report.

Measuring whether Australia and the way Australians live is sustainable requires that we find out whether we are sustaining social and economic capital as well as environmental capital. If our way of life were becoming sustainable, then we would be successfully sustaining the environment without trading off our economic development or the well-being of our people, either now or in the future. Nor would we be allowing any particular group within our population to bear an inequitable portion of the cost of keeping everything we value.

Besides the 370 indicators we have developed to tell us whether we are sustaining our environment, there are as many if not more social and economic indicators that might provide information on whether we are sustaining our social and economic well-being. From this range of environmental, social and economic indicators, the Federal Government has selected just 24 headline sustainability indicators to report on our national sustainability. These indicators relate to some 21 values which are considered to reflect the core objectives of the National Strategy for Ecologically Sustainable Development (see above). The indicators have been selected as being sufficiently representative of these values to give, over time, a manageable and comprehensible picture of whether Australia is sustaining its way of life. A first Report against these indicators has been completed.

Neither the SoE Report not the Headline Sustainability Indicators provide any specific reflection on the ESD performance of any sphere of government. However, under the Environment Protection and Biodiversity Conservation Act, all Federal Government agencies must report annually on: how all their activities have had an effect on the environment (activities includes development and implementation of policies, plans and programs); how their activities have accorded with the principles of sustainable development; how their administration of legislation accords with these principles; and how the outcomes of their appropriations contribute to sustainable development. They must also report on measures for minimising environmental impact and mechanisms for increasing the effectiveness of these measures. The Federal Government is encouraging its agencies to implement accredited Environmental Management Systems to assist with the reporting requirements under the Environment Protection and Biodiversity Conservation Act.

Some other jurisdictions are developing similar measures for making their sustainability progress more accountable. The NSW Protection of the Environment Administration Act 1991 requires the Environment Protection Authority to make a report on the state of the environment every 3 years.

At the international level, Australia contributes to a number of international fora pursuing sustainability by means of periodic and regular reporting. In addition to reports submitted as required by various conventions, reports are submitted to international organisations. These reports are an assessment of how Australia meets its own environmental objectives and fulfils international commitments. They also provide an insight into Australia's political and administrative arrangements, through which environmental issues are addressed. In particular, Australia is an active contributor to the Commission for Sustainable Development, preparing a national report each year, and to the Organisation for Economic Cooperation and Development (OECD), participating in its environment performance review cycle, its economic reviews, and contributing to its sustainable development project.

3.3.2 Private Sector Reporting

The private sector has also begun to accept the need to be accountable for their environmental performance. In the world of business, superior environmental performance is increasingly being considered as a potential source of competitive advantage.

The Government took an important step in 1998 to help in building the capacity of industry to seize this competitive advantage by implementing the National Pollutant Inventory. This measure requires industry to annually report on their emissions of a list of substances to air and water. Overseas experience, and early indications here, suggest that the National Pollutant Inventory will improve the industry's capacity to measure and manage environmental performance, and should contribute to both the economic and environmental performance of companies. In addition to advancing dual economic and environmental objectives, the National Pollutant Inventory also satisfies the important social objective of making information about industrial emissions accessible to local communities.

Voluntary Public Environmental Reporting by businesses and private corporations is another area in which Australian industry has shown a steadily increasing interest. In a Public Environmental Report, an organisation looks at current operating practices and reports on issues such as energy and material use and any waste generated during operations. The Public Environmental Report can also identify areas where resource savings and waste reduction could be made and sets targets for making these improvements. An important aspect of a commitment to produce a Public Environmental Report is that systems are often set up to meet targets, monitor progress and identify ongoing opportunities for improvements. Some organisations have expanded the concept of a Public Environmental Report by bringing the environmental and social aspects of operations into their traditional economic reporting requirements in the form of triple bottom line, or sustainability, reports. Increasingly such an approach is being seen favourably, even essential, by shareholders, fund managers, and stakeholders more broadly.

Most recently, public environmental and sustainability reporting by the private sector has expanded to include the financial sector with the Financial Services Reform Act 2001. This requires fund managers and superannuation trustees to disclose in their Product Disclosure Statements "the extent, if any, to which labour standards, environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment". The disclosure requirements affect the majority of retail investment products available in Australia, including international funds.

3.4 Potential Application of these Approaches in the International Context

Many international organisations are yet to accept sustainable development as fundamental to their purposes. Some organisations such as the UN Informal Consultative Process on Oceans and Law of the Sea, the United Nations Forum on Forests and the APEC Marine Resources Conservation Working Group have developed approaches similar to those explored in Australia to integrating ESD principles into their missions and objectives. Other organisations such as the United Nations Industrial Development Organisation, the United Nations Centre for Human Settlements (Habitat), the United Nations Environment Program and the Intergovernmental Forum on Chemical Safety, have partially recognised sustainable development principles in their objectives. Most of those that have done so have some responsibility for protecting the environment as part of their core business.

Including sustainable development in organisational objectives is one thing. Establishing mechanisms to assist delivery of sustainable development objectives at the operational level is another. In Australia this has been tackled primarily by including a wide range of community and industry stakeholders in both decision making and on the ground management processes. In particular, our bilateral eco-efficiency agreements with industry associations (see above) might be applicable at the international level.

A third step in establishing institutional arrangements for achieving sustainability, after setting organisational objectives and developing mechanisms for implementation, is ensuring corporate accountability for the sustainable development performance of organisations. Although Australia's mandatory sustainable development reporting requirements for Federal Government agencies is a relatively new reform, it should help to ensure transparency in and accountability for the sustainable development performance of government organisations. It is an approach which may be usefully adapted in other countries and international organisations.

Australia's experience suggests that incorporating sustainable development principles in the objectives of all relevant organisations, processes and strategies is an important step towards achieving sustainability. Where appropriate, consideration might be given to establishing cross-sectoral, purpose-built international organisations or task forces (along the lines of the Australian National Oceans Office and the Australian Greenhouse Office), which are set up to solve particular problems within set time frames, and which have explicit sustainable development objectives, operational processes and reporting requirements.