Working Group Generates Ideas for Financing Chemicals Work Beyond 2020
By IISD’s SDG Knowledge Hub , March 3, 2021
A virtual working group advanced work on financing for the Beyond 2020 chemicals framework, focusing on an integrated approach to financing the sound management of chemicals and waste, financing the Secretariat, and strategic partnerships. The group is part of a set of virtual workstreams leading to the fourth meeting of the intersessional process considering the Considering the Strategic Approach to International Chemicals Management (SAICM) and the Sound Management of Chemicals and Waste Beyond 2020 and the fifth session of the International Conference on Chemicals Management (ICCM5).
The VWG met four times in late 2020 and early 2021: on 18 November, 16 December, 20 January and 10 February. Discussions incorporated previously compiled recommendations and proposals and stakeholder input. This summary provides an overview of discussions of the first three meetings.
GEF-8 should build on established areas of international concern, such as lead in paint, highly hazardous pesticides, and single-use plastic.
Regarding an integrated approach to financing, working group participants underscored the need for adequate, predictable, and sustainable financing to achieve both the SDGs and the objectives and targets of the Beyond 2020 agreement. To this end, they discussed mainstreaming, private sector involvement, and dedicated external financing.
Participants generally supported a proposal to establish a clearinghouse mechanism to track development aid, potential funding sources, and information sharing. Some said the mechanism should be independently reviewed and verified through good accounting practices. Some expressed concerns regarding the feasibility of such a mechanism, noting it would be resource intensive. One participant suggested the Secretariat could act as a broker to match initiatives that require funding with potential donors.
The group highlighted the critical importance of mainstreaming the sound management of chemicals and waste into national development plans, domestic budgets, and relevant sector policies. Participants highlighted the role of the private sector and finance sector to support such mainstreaming and ensure sound management throughout the lifecycle of chemicals and waste. An industry representative called for establishing fee-based chemical management systems in each country to achieve mainstreaming. One developing country said that creating an obligation to mainstream sound management of chemicals and waste through national laws and regulations may not be feasible without adequate financial resources, technical assistance and capacity.
Participants agreed that private sector involvement is critical, and highlighted the need for governments to encourage the private sector to assume greater responsibility and increase their contributions, such as by developing cost recovery legislation. Participants also supported:
- Defining responsibilities for chemical safety at production sites and in the supply chain;
- Implementing the principles of extended producer responsibility (EPR) and polluter pays, and the Globally Harmonized System of Classification and Labelling of Chemicals (GHS);
- Fees and taxes for the private sector; and
- Quantifying both voluntary and mandatory actions, and mapping them to identify existing contributions and related actions.
The African group proposed a 0.5% financial contribution from the annual turnover of the chemical industry to a multilateral fund to support the Secretariat and work plans.
On capacity building, stakeholders suggested establishing internationally recognized tiers of achievement to incentivize more robust implementation of chemicals management. The International Council of Chemical Associations (ICCA) proposed a capacity-building clearinghouse mechanism for capacity-building efforts, tracking progress, and generating additional funding. A small group further discussed the proposal and private sector involvement.
Participants generally agreed on establishing strategic partnerships to support implementation of the Beyond 2020 framework. They called for transparency, guiding principles and criteria as key elements to conduct and assess partnerships.
On dedicated external financing, participants agreed that ICCM5 could convey its needs to the Global Environment Facility (GEF) and the UNEP Special Programme regarding support for implementation of the Beyond 2020 process. They said the eighth GEF replenishment should prioritize building on established areas of international concern, such as lead in paint, highly hazardous pesticides, single-use plastic, hazardous waste imports, and the export of banned substances. Participants supported extending the duration of the Special Programme.
Many also expressed interest in exploring resource mobilization strategies to raise different types of external financing and ways to increase multi-stakeholder and multi-sectoral access to funding. Some supported creating a new international fund. Others said the Special Programme is operating effectively, and creating a new financial mechanism would require additional management costs. Participants emphasized that while the GEF and the Special Programme provide direct support to SAICM, the overall chemicals agenda is also supported by other MEA financial mechanisms.
On financing the Secretariat, stakeholders agreed with the voluntary approach for contributions. Some emphasized the need to provide an indicative reference for government contributions, such as the proposed UN scale of assessment. Participants supported broadening the proposed resource mobilization strategy beyond only funding the Secretariat to cover implementation of the future framework, and emphasized domestic resource mobilization to implement future work.
On cost-recovery mechanisms and other economic instruments, participants stressed the need for national-level solutions through the establishment of cost-recovery mechanisms, rules on “polluter pays” responsibility, or a fee-based chemical management system. Participants highlighted the need to utilize existing tools developed by stakeholders to help guide countries in transition and developing countries in setting up such mechanisms.
The recommendations of the working group are expected to be discussed during IP4 and ICCM5, which were scheduled to convene in person in the first half of 2021 but were recently postponed.