Virtual Working Group Issues Proposals for Financing Chemicals Management

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By IISD’s SDG Knowledge Hub , April 21, 2021

A working group on financial considerations for chemicals management beyond 2020 has completed its work, and the co-facilitators have issued a final report. The discussions held over four months addressed private sector involvement in the sound management of chemicals and waste, a clearinghouse mechanism to track aid, and a strategy for resource mobilization, among other topics

The Strategic Approach to International Chemicals Management (SAICM) convened four virtual working groups amid pandemic-related restrictions on in-person meetings, to advance intersessional work on the beyond 2020 chemicals framework ahead of the fourth meeting of the Intersessional Process for Considering SAICM and the Sound Management of Chemicals and Waste Beyond 2020 (IP4) and the fifth session of the International Conference on Chemicals Management (ICCM5). 

The co-facilitators for the Virtual Working Group on Financial Considerations, Jonah Davis Ormond (Antigua and Barbuda) and Reggie Hernaus (Netherlands), issued the report on 19 February 2021, based on the group's four meetings and members' written submissions. The group used a compilation of recommendations prepared previously as a basis for discussion.

Regarding an integrated approach to financing, some stakeholders supported a new chapeau paragraph to indicate that adequate, predictable and sustainable financing is essential to achieve the 2030 Agenda for Sustainable Development and the objectives and targets of the new beyond 2020 instrument for chemicals and waste management. The African Group, the EU and others supported reference to the 2030 Agenda and the SDGs, while the US opposed. 

Several stakeholders supported a paragraph on establishing a clearinghouse mechanism to track development assistance, while others noted it might be resource intensive and would duplicate other work. Some proposed the clearinghouse mechanism could instead map funding sources and provide information.

The co-facilitators’ report includes a proposed paragraph on mainstreaming the sound management of chemicals and waste at the national level, including in national development plans, domestic budgets, and relevant sector policies. It also mentions funding as part of ODA for such mainstreaming in developing countries and countries with economies in transition.

On private sector involvement, many stakeholders said governments should encourage the private sector to assume greater responsibility and increase their contributions through developing cost-recovery legislation, and incentives and appropriate economic instruments for industry to internalize external costs. In addition, many expressed the need to define responsibilities for chemical safety at production sites and in the supply chain, as well as to implement the principles of extended producer responsibility and polluter pays, the Globally Harmonized System of Classification and Labelling of Chemicals (GHS), and the payment of fees and taxes for industry. However, some warned that standardizing policies would restrict flexibility in implementing them, suggesting instead to place such detail in a resource mobilization strategy. The EU supported text on ensuring industry is responsible for GHS implementation.

The International Pollutants Elimination Network (IPEN) proposed a globally coordinated tax or fee on the production of basic chemicals to finance chemical safety actions, which could flow into an existing or new international fund. The African Group proposed that the chemical industry contribute 0.5% of its annual revenue to fund SAICM implementation. One stakeholder suggested using private sector contributions for community-based disaster risk management.

On the financial sector developing investment guidance, some participants said targeting multilateral development banks (MDBs) would ensure financing goes beyond chemicals and waste and links to the biodiversity, climate change, and sustainability agendas. 

The African Group called for basic minimum standards to guide companies in different countries in ensuring their operations protect the environment and human health regardless of national legislations.
The ICCA proposed a capacity-building clearinghouse mechanism to bring together initiatives, map existing capacity-building efforts, help track progress, and generate additional funding. Detailed discussions on this proposal took place on 17 December 2020.
On strengthening dedicated external financing, stakeholders said ICCM5 should provide clear guidance to the GEF and the Special Programme on what SAICM or the new chemicals framework is expecting from them and priority actions for funding. IPEN supported increasing the amount of GEF funding available for SAICM implementation. On extending the Special Programme, many expressed interest in exploring resource mobilization strategies to raise different types of external financing and ways to increase the multi-stakeholder and multi-sectoral access to funding.

The co-facilitators proposed keeping a paragraph on establishing an international fund in brackets for further consideration by IP4, given the divergent views of the issue. Although a number of participants supported creating a new fund, some preferred prioritizing effective operation of the Special Programme before creating a new financial mechanism.

IPEN, with support from Canada and the WHO, suggested all SAICM stakeholders should have access to Special Programme funding to address civil society financing, and broadening the scope of activities eligible for Special Programme funding. Brazil, Japan, UNEP, and the US opposed such a paragraph, while the EU, Iran and Switzerland said further discussion was needed.

Regarding establishment of and engagement in multi-sectoral partnerships, the EU, IPEN, and Japan supported language stating that such partnerships should be transparent and accountable and linked to the 2030 Agenda. Brazil, Canada, and the US suggested deleting reference to the 2030 Agenda.

On financing the Secretariat, Brazil, Canada, the EU, Japan, US, Peru and Switzerland supported language encouraging contributions from all stakeholders and sectors. IPEN requested a reference to its proposed international fund, which could also help finance the Secretariat.

The African Group proposed assessing the necessary contributions and communicating expectations from governments and industry in terms of financial contributions. The EU supported applying the UN scale of assessment to estimate voluntary contributions of governments, and for developing a comparable reference to determine indicative contributions of non-governmental stakeholders. Japan and the US opposed using this indicative reference.

IPEN said contributions should not be earmarked, to ensure the Secretariat can use funds based on priorities and needs. The Global Alliance on Health and Pollution (GAHP) and the US recommended including a reference to transparency in the text. Norway and others called for distinguishing between contributions for implementation of the Beyond 2020 instrument, and in-kind support for the Secretariat’s operating costs. 

The working group also discussed concrete mechanisms and actions regarding capacity building across sectors to support the Beyond 2020 programme of work. Participants proposed various capacity-building actions and mechanisms, with one suggesting establishing internationally recognized tiers of achievement to incentivize more robust implementation of chemicals management by countries. Another proposal envisions broadening the existing national units under the Montreal Protocol, so they could include chemicals and waste issues and coordinate national implementation of SAICM and the Basel, Rotterdam, Stockholm, and Minamata Conventions.

On next steps, the co-facilitators proposed establishing a new virtual process to continue discussions on financial considerations and the specific proposals that have been raised. [Webpage for virtual working groups]