This conference on the Precautionary Principle is about how we deal, in a practical way, with uncertainty regarding the long term impacts of our activities upon the environment. It is also about accommodating, in government policies, programs and legislation, the vaguely-worded international principles and codes of practice arising from the globalisation of environment issues, most evident in the Rio UNCED outcomes. I would like to touch on both aspects in reverse order.

The Australian Government strongly supported and, in some respects, was a prominent player in the international negotiations which culminated in the 1992 Rio UNCED outcomes, namely: the Rio Declaration, Agenda 21 and the Climate Change and Biodiversity Conventions. Industry also participated in the Rio process as NGO members of the Australian delegations involved in the lengthy and complex negotiations that resulted in the final texts of the Rio outcomes.

Industry strongly supported the sustainable development theme of UNCED but at all times urged the Australian Government, in its participation in country negotiations, to have regard to Australia's domestic economic situation and, in particular, the dependence for our economic well being on our resource-based industries remaining internationally competitive as major exporters of commodities such as minerals and energy. Indeed, the mining sector makes a major contribution to national income and living standards, accounting for more than 50% of our merchandise exports and exceeding 9 % of GDP.

It was therefore pleasing to see that the Environment Minister, Ros Kelly, in her speech to UNCED, recognised Australia's dependence on resources, noting that:

"We are rich in fossil fuels. We are a resource based economy, and though we have a strong comparative advantage in the production and export of natural resources, we are subject to fluctuations in commodity prices and international market distortions."

The outcomes from Rio reflect the many differences of view between nations and inevitably the texts were compromises. Significantly, agreement was reached on the Rio Declaration which comprises 27 Principles, or general codes of conduct, for achieving sustainable development and which underpins the Conventions and Agenda 21. As general indicators of behaviour, I believe that they are meant to be acted upon together and individual Principles should not be given special treatment to suit one or other interest group. For example, the Precautionary Principle is included amongst those 27 Principles as Principle 15:

"In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation."

Other principles in the Rio Declaration carry equal weight and relate, amongst others, to: equitably meeting developmental and environmental needs of present and future generations (Principle 3), integrating environmental and development decision-making (Principle 4), a supportive and open international economic system leading to economic growth and sustainable development in all countries (Principle 12), liability and compensation for the victims of pollution (Principle 13), internalisation of environmental costs (Principle 16); and peace, development and environmental protection are interdependent and indivisible (Principle 25).

The Rio conventions are soon to become international law and governments, including those in Australia, are moving to implement their Rio commitments through policies, strategies, programs and legislation. In doing so. Industry continues to press for governments to have a strong weather eve on their economic implications. such as international competitiveness. while meeting environmental objectives. This applies especially where governments attempt to put general principles, such as the Precautionary Principle, directly and separately into environmental statutes without indicating how they are to be implemented.

Besides Rio, other major developments shaping Australia's environmental policy and regulatory frameworks have been the completion of a two-year program of community consultation to develop a National Strategy for Ecologically Sustainable Development (1992) and the Inter Governmental Agreement on the Environment (1992). Both refer to the Precautionary Principle, amongst others.

The National ESD Strategy includes as a Guiding Principle:

"where 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."

Reference to "cost-effectiveness" is absent but other ESD Guiding Principles include: developing a strong, growing and diversified economy, enhancing the capacity for environmental protection; maintaining and enhancing international competitiveness in an environmentally sound manner. The Strategy also cautions that these Guiding Principles, along with the Core ESD Objectives, need to be considered as a package and none should predominate over the others (Pages 8/9).

The IGAE lists four Principles of Environmental Policy to guide governments in the development and implementation of environmental policy and programs, one of which is the Precautionary Principle:

"Where 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.

In the application of the precautionary principle, public and private decisions should be guided by:

1. careful evaluation to avoid, wherever practicable. serious or irreversible damage to the environment; and
2. an assessment of the risk-weighted consequences of various opinions."

In this definition "cost-effectiveness" has been replaced by "wherever practicable" and "risk weighted consequences". The quoted, examples highlight the variation in definitions of the Precautionary Principle and, no doubt, at this conference we will hear of its evolution beginning in Germany in the 1970's. What is clear, however, is the underlying theme of dealing cautiously with uncertainty as it applies to long-term, and possibly irreversible, environmental impacts of decisions. Other interpretations include giving the benefit of the doubt to the environment and reversing the onus of proof for proponents to demonstrate "no harm to the environment" (an impossible proof given that there are no absolutes in science).

My interpretation of the Precautionary Principle is one of assessing environmental risk and making informed decisions taking into account the practicalities involved and the economic implications.

What the principle cannot mean is that we should not accept any form of risk when planning or undertaking any activities, for if such a meaning was applied generally to past activities, it would have prevented much scientific, technical and engineering progress. In contrast the Australian Mining Industry Council (AMIC) believes that risks should be evaluated and managed, but not necessarily eliminated. Risk taking and risk management, AMIC argues, is an essential element in human progress. AMIC goes further to state that any interpretation of the Precautionary Principle as a zero risk principle in the setting of objectives and standards is strongly rejected.

In interpreting the Precautionary Principle, the Chapter on "Dealing Cautiously with Risk" in the ESD Intersectoral Issues Report (1992) provides an excellent introduction to concepts of intergenerational equity, uncertainty and irreversibility In reconciling the need to enable economic development to proceed efficiently and at the same time minimise or prevent ecological damage, the Report notes that two general objectives seem relevant:

"The first is an acceptance of the need for dealing cautiously with risk. This implies that where considerable uncertainty surrounds a proposed action, the decision should lean on the side of caution. This does not mean that development should not proceed whenever we cannot be certain of its ecological im pact. lt does mean that the need for particular caution needs to influence the balance between a need to preserve natural capital and a need to proceed." (page 40)

The question for this conference to address is how to deal with environmental risk while allowing economic development to proceed.

Companies deal with notions of risk every day. Commercial discount rates are employed to plan future cash streams and investments. Engineers compute dynamic stress failures in constructions. Both are based on probabilities. Similarly, environmental protection agencies employ risk-based assessments in the setting of standards and other environmental conditions by building in adequate safety buffers. Industry must also stand by its assessment of environmental risk in the decisions it takes and must be judged by its successes and its failures. The recently released Business Council of Australia's Principles of Environmental Management deals with the assessment and management of environmental risk as follows:

"a. Assess, to the extent approachable using available methods and technology, the potential environmental impacts of business operations, products and services so that avoidable environmental problems can be prevented.

b. Take business decisions related to operations, products and services bearing in mind the balanced environmental and economic and social development needs of the community.

c. Establish a policy and strategy to reduce, and, where practicable, eliminate the discharge of environmentally harmful substances." (page 14)

However, biological systems are inherently variable and our knowledge of long-term environmental impacts is less precise. Under these circumstances, environmental public policy processes must integrate assessments of risk from scientists, engineers and the community. Community perceptions of those risks are often critical determinants about development proceeding but we in Industry must recognise that notions of risk differ markedly between the experts and the public.

Community perceptions of environmental risk associated with project approvals depend upon the extent to which we in Industry adequately consult with the community. Increasingly, the principle of "community right to know" is being linked to community acceptance of development approvals. By way of example, the Victorian EPA has recognised the emergence of community right to know with its recent environmental licensee accreditation proposal.

The Precautionary Principle has now emerged in Australian environmental legislation. The NSW Protection of the Environment Administration Act l992 has the Precautionary Principle effectively included into the objectives of the NSW EPA. The SA EPA Bill also refers to this Principle.

While Industry recognises the need to deal cautiously with risk in the context of the Precautionary Principle, it is, nevertheless, concerned that vaguely worded or incomplete definitions of this Principle appearing in legislation will lead to uncertainty associated with its intent and differences in its interpretation by the decision-makers and, perhaps of greatest concern, by the courts. It is after all, uncertainty associated with approvals processes for economically and environmentally sound mining projects that will tend to stop all progress, economic and environmental, as investors go elsewhere.

The Australian Manufacturing Council (AMC) recently released its paper: "The Environmental Challenge: Best Practice Environmental Regulation" (1993) in which it argues for an environmental regulatory regime which facilitates the achievement of international competitiveness and sustainable development. The Report advocates the application of the principles of international best practice and benchmarking to environmental regulation to enhance environmental performance and to improve competitiveness. Of relevance to any discussions at this conference about the need to incorporate the Precautionary Principle into environmental legislation are some of AMC's ten principles of Best Practice Environmental Regulation:

Certainty: Industry must be able to operate confident that its investments will not be threatened by significant unexpected changes to environmental standards and where there are nationally consistent approaches to a development.

Consultation: There must be timely consultation with key stakeholders and a collaborative approach to the setting of objectives, targets and performance indicators;

Efficiency: No undue delays, no duplication and moves towards national consistency;

Flexibility: Shifts away from end of pipe solutions to an integrated pollution control approach and recognition of changing technologies allowing for alternative approaches;

Practicality: Objectives set to be reasonable and sufficient to achieve environmental aims of regulators, allowing industry to innovate;

CONCLUSION

Much of the current debate about environmentally damaging practices is based upon past industry practices without the realisation that there has been great change on the part of Industry in putting in place environmental policies and environmental management systems. Risk assessment is already a significant part of the environmental approvals process and one must question why the emphasis on the term the Precautionary Principle. Is it necessary? Does it add value to the environmental assessment process?

The Precautionary Principle is about dealing cautiously with environmental risk; it is not a new phenomenon. In achieving sustainable development, the Precautionary Principle should not be dealt with in isolation, but considered along with other imperatives such as economic development. Greatest benefit will accrue from this conference if practical methods are developed for decision-making which improve the way we deal with environmental uncertainty and risk.

Creation of wealth through responsible and environmentally sound development will increase the capacity of the community to enhance and sustain environmental outcomes and allow Australia to afford the best environmental standards. The risk of no development leads to a "social uncertainty" of similar potential impacts, as severe as environmental damage, for current and future generations.

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