A new OECD trade policy paper graphically illustrates the importance of global value chains to the global economy, while recognizing that there is still much we do not know about the size and direction of the resulting effects. The paper defines a value chain as “the full range of activities that firms undertake to bring a product or a service from its conception to its end use by final consumers”. A GVC results when the activities undertaken span two or more countries.

The report reviews GVCs for agriculture and food products, chemical products, vehicles, electronics, business services, and financial services but the most illustrative part of the report is a case study on the well-known breakfast spread Nutella®. Note that the report’s analysis appears to be based on European-made Nutella®. Ferrero also manufactures Nutella® in Brantford, Ontario.

According to the report, Nutella® has a global value chain spanning at least six countries. Ferrero International SA, its manufacturer, is headquartered in Italy and has nine factories producing Nutella®: five are located in Europe, one in Russia, one in North America, two in South America and one in Australia. Some inputs are locally supplied, for example the packaging or some of the ingredients, like skimmed milk. There are however ingredients that are globally supplied: hazelnuts come from Turkey, palm oil from Malaysia, cocoa from Nigeria, sugar from Brazil (but also from Europe) and the vanilla flavour from France. Nutella® is then sold in 75 countries.

The OECD report is available at http://www.oecd-ilibrary.org/trade/mapping-global-value-chains_5k3v1trgnbr4-en by clicking on the Adobe Acrobat PDF symbol.

The business-oriented Vancouver-based environmental group Canopy has launched a campaign against what it describes as textiles from ‘ancient and endangered forests’ being used in clothing. Canopy defines ancient and endangered forests as the Canadian and Russian boreal forests; temperate rainforests of British Columbia, Alaska and Chile; and the tropical rainforests of Indonesia and the Amazon. According to Canopy, clothing made from, or containing, rayon, model or viscose fabric may be made from material from these forests.

The Canopy campaign is very eye-catching with one of the photos featuring an adult and young orangutan apparently preparing for a smooch while others feature a bear, a forest scene, and a woman dressed in a little bit of greenery. Gallondaily suspects that this campaign will attract significant media attention. So far, Canopy reports that EILEEN FISHER, Quiksilver, prAna, Patagonia, and lululemon athletica have signed on to its campaign to protect “endangered forests from being logged for clothing”.

Such consumer-oriented campaigns are laudable but, as the somewhat controversial multistakeholder Forest Stewardship Council has shown, they make progress towards eliminating unsustainable cutting of forest resources at a pathetically slow rate, if at all. A good summary of criticism of FSC is provided in Wikipedia at http://en.wikipedia.org/wiki/Forest_Stewardship_Council#Criticism.

The economic, social and trade issues associated with use of forest fibre for paper, furniture, construction, and clothing are complex. An treaty to ban cutting of trees in unsustainably managed forests has been attempted and has failed to achieve the kind of international agreement required. In the short term, linking certain clothing fabrics to destruction of ‘ancient and endangered forests’ is a useful educational tool for business and consumers but it is unlikely to stop the destruction of the forests. What is needed is for the economic value of standing forests to exceed the economic value of cut timber. International climate change discussions are moving in that direction but still have a very long way to go.

The Canopy campaign for textiles from sustainably managed forests can be found at http://canopystyle.org/ . More about the environmental group Canopy is at http://canopyplanet.org/

As concern increases about the ability of the earth to provide enough food for a growing human population it becomes increasingly important to better understand the feeding habits of humans. Recent research presents previously unknown information about our place in the global food chain.

Researchers in France have determined the Human Trophic Level and have found that, globally, humans are slowly moving to a diet which includes more meat, though this trend is not true in all countries. As the researchers explain, trophic levels describe the position of species in a food web, from primary producers to apex predators. They are regarded as critical for synthesizing species’ diets, depicting energy pathways, understanding food web dynamics and ecosystem functioning, and monitoring ecosystem health.

Among some of the interesting findings of the research:

• humans currently appropriate 25% of the net primary production of the planet through food production and land use and this human appropriation is approaching the planetary boundary.
• for a fixed quantity of food consumed, it is more efficient for human populations to eat from lower trophic levels (biomass rather than meat) to reduce the extraction of resources.
• the global median human trophic level has increased by 3% since 1961. This trend is mainly driven by China and India and the human trophic level of the rest of the world is relatively stable.
• there are large variations in diet between countries and over time.
• in the global food web humans are similar to anchovy and pigs and cannot be considered apex (top of the food chain) predators.

There is considerable diversity in diet between the 176 countries of this study, but only five different groups of HTLs. The majority of sub-Saharan countries and most of Southeast Asia have a pattern of low and stable HTL, reflecting diets that are primarily plant based. Low and increasing HTLs are found for several countries throughout Asia, Africa, and South America, including China and India. Central America, Brazil, Chile, Southern Europe, several African countries, and Japan, have higher HTLs and also show an increasing trend. North America, Northern and Eastern Europe, Australia, and New Zealand, had high and stable HTLs until 1990, when they begin to decrease. Iceland, Scandinavia, Mongolia, and Mauritania, with traditional diets of meat, fish, or dairy products and low vegetable consumption, have the highest overall HTLs but these too are decreasing.

The research finds complex associations between HTL and the socioeconomic, environmental, and cultural characteristics of countries. Large-scale patterns show that HTL is positively related to, for example, gross domestic product, life expectancy, CO2 emissions, and urbanization rate, until a point after which the relationships plateau and then turn negative (declining consumption of meat).

The research paper is available, free abstract and small fee required for the full paper, in Proceedings of the National Academy of Sciences of the United States of America
at http://www.pnas.org/gca?allch=&submit=Go&gca=pnas%3B1305827110v1

A study by the U.S. Public Interest Research Group Education Fund and Frontier Group, a think tank claiming to produce ideas and research to promote a cleaner environment and a fairer and more democratic society, claims that from 2006 to 2011, the average number of miles driven per resident fell in almost three-quarters of America’s largest urbanized areas for which up-to-date and accurate data are available.

The numbers are small and the data, drawn from a range of public sources, are somewhat shaky but the overall and highly detailed analysis does suggest that a trend away from cars and towards public transportation and bicycles is underway. The report indicates that from 2004 to 2012, the average number of vehicle-miles driven per capita decreased by 7.6 percent and from 2007 – when Americans’ total vehicle travel peaked – to 2012, the total number of miles driven in America fell by 3.1 percent.

US PIRG reports that this trend has arisen because:

• Americans are saturated with driving.
• vehicle ownership per licensed driver has declined by 4 percent since 2006.
• the percent of driving-age Americans holding licenses has declined. In 2011, 86 percent of driving age Americans held licenses, the lowest percentage in 30 years
• Americans may be hitting the limit on the amount of time they are willing to spend in their cars each day.
• workers tend to drive more miles than non-workers and the share of Americans in the labor force has dropped from its 2000 peak of 67.3 percent to 63.2 percent – the lowest level since 1978.
• with baby boomers retiring, a greater share of Americans are entering age groups that have historically driven fewer miles.
• from 2002 to 2012, the average inflation-adjusted price of a gallon of gasoline doubled and put car ownership out of reach for many families.
• Americans are increasingly choosing other modes of transportation – light rail, buses, trains, bicycles or walking – for trips they might once have taken by car,

If similar trends are applicable to Canada, medium to long-term consequences could include such trends as:

• a natural end to urban sprawl.
• preference for local shopping rather than big box stores located in suburban areas.
• a greater need for delivery services.
• a need to rethink parking requirements to reduce the number of vacant spaces.
• increased government emphasis on public transportation rather than building of more roads.
• employees moving closer to places of employment requiring a transition to greater integration of residential, commercial, industrial and institutional land uses rather than their segregation as so often occurs at present.
• reduced requirement for petroleum fuels and fuel distribution locations.

The 36 page US PIRG report Transportation in Transition: A Look at Changing Travel Patterns in America’s Biggest Cities is available at http://uspirg.org/reports/usp/transportation-transition

A related 53 page report, commenting more on the implications of reduced automobile use, is entitled A New Direction: Our Changing Relationship with Driving and the Implications for America’s Future is available at http://www.uspirg.org/reports/usp/new-direction

The Premier of Ontario recently announced that Ontario plans to create green bonds to finance “environmentally friendly infrastructure projects” across Ontario. GallonDaily suggests that these bonds could be a gamechanger in the financial services sector but only if the Province designs the program properly.

Why a gamechanger?

Ontario residents, like those of most other Canadian provinces and US states, have shown that they are eager to participate in environmental initiatives where they can provide helpful input with little or no disruption to their lives which they often already perceive as hectic. The high participation rate in Ontario Blue Box recycling is just one of many examples. Moving some of one’s savings to green bonds is even easier than recycling through the Blue Box. If the program is designed correctly, then it is likely that millions of Ontario residents, and potentially some from other provinces as well, will move some of their savings and investments to the new green bonds, potentially causing the size of the green bond fund to greatly exceed government projections, whatever they are. If this happens, movement of investment from conventional savings and investments to green bonds is likely to cause banks and other financial service companies to introduce green investment vehicles of their own. This could be a real boost to the greening of all kinds of capital projects, not just those that fall under provincial government jurisdiction.

What are the risks?

Unfortunately, government does not always get new initiatives designed and implemented properly. We have no way of knowing at this stage whether the government will design the green bond program in a way that makes it attractive to individual investors. The initial announcement of the project is already confused. In the first paragraph, and in quotes in the press release from the Premier and the Minister of Finance, the green bonds are announced as being for transit, something that is not likely to attract a ton of public interest outside of Toronto. Even in Toronto transit is a highly controversial topic with proponents of the different modes (subway, light rail bus, etc.) battling it out at every opportunity.

The premier says that the province plans to issue green bonds next year, subject to the passage of legislation and the receipt of certification. That is a pretty fast, though not impossible, timetable for designing the program. It reminds us of the Ontario government’s Green Energy Act, introduced too fast and with far too little consultation, it remains a highly controversial program to this day. The government, in a minority position in the Legislature, may face an election following a possible defeat of the budget in the Spring. this would presumably delay or kill the green bond program. Environment Minister Jim Bradley, currently the longest serving member of the legislature and a pretty astute politician, told GallonDaily recently that he is sure that the Ontario election will not come until 2015, but even Jim Bradley could be wrong.

How should the program be designed?

GallonDaily sees the following as being among the elements that are essential for a successful Ontario green bond program:

• a competitive rate of return. If the bonds provide a lower rate of return than other government investments, people will decide to keep their savings in higher rate instruments.
• a government guarantee at least as good as provided to other government savings bonds. Maybe even slightly better than, given that green bonds are an investment vehicle new to Canada.
• a clear plan showing how the promised rate of return will be achieved throughout the life of the bonds.
• clearly green. There are ways in which even public transit projects can be designed so as not to be green. Low potential ridership is one of these. The funds from the green bonds must be used only for projects which the vast majority of the population sees as being green.
• absence of controversy regarding the green status of the bonds. Using green bond capital for such projects as nuclear power plants or energy from waste plants would introduce a level of controversy that would scare away many investors. There is no evidence that this will happen, but, where politicians are involved, one never knows. Even if just one of the opposition parties were to say that if it came to power it would use green bond funds for a controversial project such as one of these, that alone may be enough to scare off lots of individual investors.
• the right balance between management expenses and investment in projects. In recent years there has been much controversy in Ontario about the salaries paid to executives in publicly funded organizations. Couple that with public outrage regarding salaries paid to bank executives and the potential for big disaster looms.
• absolute transparency. Everything the green bond board does, from salaries to expenses to assessment of investment opportunities and investments, must be included in information made available to the public. In GallonDaily’s 25 years of experience, green consumers are much more critical observers of the organizations that they deal with than mainstream members of the public. These people will put Ontario green bonds under a very high power magnifying glass.
• good marketing. Most people do not know much about green bonds. A program of education will be essential. Governments used to excel at leading the public but today excellence in leadership seems too often to be lacking. If the bond funds are to be used for such essential projects as renewal of crumbling underground infrastructure (water and sewer mains, for example) then good public education and marketing will be essential because many residents know very little, if anything, about these serious environmental problems and may not see them as environmental priorities.
• independence from political interference. In GallonDaily’s opinion, the green bond program and decisions about fund investments should be made by an arm’s length board of qualified experts, not by the provincial Cabinet. In today’s society it is difficult to know who is most trusted but politicians do not often come close to the top of the list. A board of experts from various sectors, environment, economic development, and finance, among others, will likely have greater credibility than a board made up of politicians from the governing party.

GallonDaily invites your comments on this article, possibly including your thoughts on what it would take to encourage you to invest in Ontario green bonds. Please send them by responding through the leave a comment button below or by email to editor@gallonletter.ca . We will publish a selection of those received in Gallon Environment Letter.

The Ontario Premier’s brief announcement about the forthcoming green bond program is available at http://news.ontario.ca/opo/en/2013/10/province-proposes-new-way-to-fund-infrastructure.html

The extent to which newspaper editorials reflect community opinion is debatable, as is the extent to which Canada’s current federal government is a reflection of Alberta public opinion, but both of these factors help to attract GallonDaily’s attention to an editorial in a small town Alberta newspaper.

Bonnyville is a town of about 6,500 roughly 250km northeast of Edmonton, not quite in the heart of oil country but on the way to the oil sands if one is driving from the west. The local area includes several large petroleum processing plants. In the 2011 federal election the Conservative party candidate, Brian Storseth, received 77.8% of the vote, up from 72.7% in 2008.

The Bonnyville Nouvelle is a community newspaper serving communities throughout this region with a combined population of about 30,000. In its latest edition the Nouvelle contains, under the headline The right to a healthy environment, an editorial which can only be described as hostile to the federal government’s attitude towards environmentalists. In the article the newspaper makes the following comments, among others:

• We are seeing environmental movements painted as radical and a threat to national security
• Politicians have demonized environmental groups and those affiliated with them, using name-calling and intimidation in order to discredit groups and discourage others from further activism.
• Could it be argued that industry and government are hijacking our regulatory and democratic systems?’
• Shouldn’t the passion for the environment Canadians are showing be applauded?
• The government and industry appear antagonistic towards finding better and more sustainable solutions to our energy needs.
• How is it our government and its security services have managed to make it wrong to stand up for the environment and bully and intimidate those that do, yet regulations, enforcement and even an understanding of the ongoing destruction of the environment goes un-punished, or worse yet, unnoticed?

It is possible that the newspaper was simply trying to be provocative but GallonDaily’s reading of the entire piece suggest that is not the case. It reads as a heartfelt piece.

If this editorial is indicative of at least some part of majority public opinion in Alberta it is quite likely that the Federal Government will scramble over the next two years, before the next election, to shore up its environmental reputation. Policy scrambles are rarely good for business: they lead to ill-conceived and economically inefficient policies and most likely include unnecessary spending (politicians still think that problems are most quickly solved by throwing money at them) and poor quality environmental results.

The complete editorial can be found at http://www.bonnyvillenouvelle.ca/article/20131203/BNV0902/312039983/-1/bnv/the-right-to-a-healthy-environment

GallonDaily will be watching for the response.

Last month the UK Deputy Prime Minister Nick Clegg spoke at length to a green-themed conference regarding both the government’s and his party’s approach to the environment. Nick Clegg is leader of the Liberal Democrats, since 2010 in coalition with the Conservatives to form the UK government. Among the many points made by Clegg:

• Over the years, I’ve heard the green agenda described in a number of ways: vote winner, vote loser; niche interest; minority sport; middle class luxury; Lib Dem obsession, even.
• And yet these days, across much of the Westminster village at least, the environment is being written off by campaign chiefs on both left and right: too expensive in hard times; a distraction from more pressing debates.
• Conventional wisdom tells us that the environment must now go on the backburner while we prioritise our economic recovery – but I believe the opposite is true. If there was ever a time to sharpen our focus on our green commitments, it’s now. There is a perfect symmetry between the nature of our economic recovery and our environmental responsibilities.
• This idea that the British people have suddenly stopped caring about green issues simply isn’t true.
• A few weeks ago, I announced a 5p charge on throw-away plastic bags. I cannot tell you how many people advised me against it. I was warned that this was the wrong time. It would be presented in the media as a tax on hardworking people. I would look out of touch. Yet every single person I have spoken to about it since has told me they support the move. Even the few who have grumbled to me that they would have preferred government to foot the cost have still agreed: if it reduces the carrier bags blighting our countryside and harming our wildlife – which it will – it’s a small price to pay.
• My commitment to the green agenda is as strong as it ever was, and it will stay that way – whether fashionable or not.
• [Energy and Climate Change Minister] Ed Davey’s Energy Bill is going to create the world’s first low carbon electricity market. Over the last year alone, the amount of renewable electricity generated in the UK has grown dramatically. On our watch, the UK has increased its lead as the world’s number one generator of offshore wind. Britain is on track to meet our target of getting 15% of our energy from renewables by 2020.
• [Business, Innovation and Skills Secretary] Vince Cable’s Green Investment Bank – another world first – is up and running. Its first few projects alone will support a reduction in greenhouse gas emissions equivalent to taking over 1 million cars off our roads.
• 80% of the 85,000 homes which have had a Green Deal [energy efficiency] assessment have told us that they have or intend to install an energy saving measure as a result.
• We’ve introduced the Local Sustainable Transport Fund – a pot of money for councils to invest specifically in low carbon transport schemes.
• Over £1 billion is now being invested to make it easier for people to get about on foot and by bike, buses, trains and trams.
• As we head to the annual UN climate change negotiations in Warsaw, we do so as a leading voice within the EU, where we are pushing, crucially, for agreement to cut the EU’s greenhouse gases by 50% by 2030. This is the most ambitious target proposed by any member state.
• In our natural environment, we’ve introduced a presumption in favour of sustainable development, and maintained strong protections for the Green Belt and Areas of Outstanding Natural Beauty.
• We’re on track to plant a million more trees by the end of the parliament – the majority in the most deprived and least green areas.
• After a comprehensive review, we plan to launch a new National Pollinator strategy next spring to protect the country’s bees and many other pollinating insects.
• We’re reducing the amount of waste we send to landfill and we’re investing in cleaning up England’s rivers, lakes and waterways.
• We’ve promoted animal welfare, including ending the practice of keeping laying hens in tiny battery cages and, for the first time, implementing welfare standards for game-birds.
• We’re seeing encouraging progress on biodiversity – this year’s biodiversity assessment report shows, for example, more land and sea protected and fish stocks better managed.
• We have also now implemented the Marine and Coastal Access Act, which seeks to improve the management and protection of our marine environment and increase public access to our coastal paths: so more people can access the beauty of Britain’s landscape, and we’re going to be saying more about marine conservation shortly.
• Protecting the green agenda will, in my view, require leadership on 3 specific fronts:
  • First, we need to aggressively counter the myth that if you are for the environment you must be against the consumer. we need to be much more robust – all of us – in rejecting utterly the idea that being pro-green is somehow anti-consumer. That is a false choice and it warps the public discussion around these issues.
  • Second, we must ensure that, as we continue with our recovery, we make low carbon industry a cornerstone of the new economy.
  • Third, we need a renewed focus on our natural environment. Our efforts to drive UK prosperity will be meaningless if we don’t protect our natural wealth.
• And we are all better off when British green businesses flourish. We must never, ever talk about consumers as if they are somehow divorced from the wider economy. The UK’s green industry is worth around £128 billion and employs almost a million people. We’re relieved when we hear that the economy is expected to grow this year by 1.4%. Well between 2011 and 2012, the low carbon and renewable sector grew by around 3% and it’s expected to keep on growing. China, India, America, Germany, Brazil – the race is on with our competitors for green global investment. China has committed to invest $286bn in renewables – that’s bigger than the Finnish economy. On energy efficiency, they’re investing $376bn in energy efficiency – that’s bigger than the economy of the United Arab Emirates.
• If Britain wants to keep up, our green industries need maximum political support.

The entire speech can be found at https://www.gov.uk/government/speeches/staying-the-course-on-the-environment-nick-clegg-speech

A new report from the United Nations Development Programme highlights opportunities for managing scarcity and securing the future for water resources in the Middle East and North Africa. The report identifies generic opportunities for improved management of water resources and governance, public-private partnerships, and institutional reform.

The report provides a more in-depth diagnosis and more considered recommendations than many previous commentators. The former includes:

• Twelve Arab countries have average per capita water availability rates below the World Health Organization threshold for severe scarcity.
• Threats include natural variability, pollution, overexploitation and climate change.
• Most shared resources also lack comprehensive international agreements, threatening both water supply and political stability.
• The water crisis is a crisis of governance.
• Water security is inseparable from social, economic, environmental and health considerations.
• Many factors impede progress in water governance, including unclear and overlapping responsibilities, inefficient institutions, insufficient funding, centralized decision-making, limited public awareness and ineffective regulations and enforcement.
• With more than 5 per cent of the global population and about 10 per cent of the world’s area, the region receives only 2.1 per cent of the world’s average annual precipitation and contains 1.2 per cent of annual renewable water resources. Renewable groundwater quantities are limited, and non-renewable groundwater supplies are threatened by unsustainable use patterns.
• Balancing multiple water uses amid water scarcity and competing interests can generate social and economic strains. Although agriculture contributes only 7 per cent of GDP, it consumes more water than industrial and municipal users. But reallocating water to more productive sectors such as heavy industry and tourism would make Arab countries even more dependent on food imports and leave millions of unskilled labourers jobless.
• Competition over transboundary waters such as the Jordan River, shared by Israel, Jordan, Lebanon, the State of Palestine and Syria and the Jubba and Shabele rivers, shared by Ethiopia and Somalia, are at the heart of regional political conflicts. Inadequate governance of shared water resources continues to threaten the region’s stability and impose uncertainty on water resource planning in the downstream countries. Deprivation of water resources in occupied territories is another major issue requiring political movement.
• The water sector, predominantly publicly owned, has a large funding gap. While most Gulf oil-producing countries can afford the needed investments in water-source solutions such as desalination, many other Arab countries cannot. The Islamic Development Bank estimates that Arab countries may need to invest up to $200 billion in water-related infrastructure over the next 10 years to satisfy growing demand.
• Some Arab countries have taken steps to reform water governance, but impediments remain, including unclear responsibilities, lack of coordination, inefficient institutions, limited public awareness, highly centralized decision making and ineffective regulations and enforcement.
• The supply-driven approach to water management in the water-stressed Arab countries has failed to deliver water security. Acquiring water supplies while neglecting use and allocation efficiency has led to unsustainable water practices.

The very extensive recommendations include such proposals as:

• Mechanisms should be established to allow effective and meaningful participation of all relevant stakeholders (such as water user associations) in formulating, implementing and monitoring water governance policies and strategies.
• Several approaches can be introduced, such as decentralization and the transfer of responsibility and authority to local user groups, and legal frameworks can be formulated to expand public-private partnership capacity. Egypt, Jordan, Morocco and Tunisia offer successful examples of public-private partnerships.
• A major shift in water policies is required, emphasizing conservation and demand management to secure long-term water supplies while meeting strict criteria for socio-economic, financial and environmental sustainability and public health requirements.
• Linking water economy and policies with other economic sectors.
• Arranging for cooperative management and governance of shared and transboundary water resources between all riparian countries.
• Establishing monitoring, feedback and assessment mechanisms for water policies and decision-making at all levels (forming and implementing). These mechanisms should involve the various stakeholders, researchers and media. This includes making water related data and updated statistics available, developing performance indicators and monitoring them, and integrating incentives in performance and efficiency indicators.
• Each country should adapt indicators and data to its own priorities, but a regional monitoring system could contribute to better understanding common problems and promoting cooperative solutions.
• Legislative enforcement in the water sector should be conducted through the judicial system and, more important, through building public support and stakeholder involvement; publicizing success stories and developing better economic incentives such as fees and subsidies; and education, information dissemination and technical assistance. This also includes developing competent inspection capacities, credible monitoring, accredited and standardized measuring systems and certified reporting systems.
• Raising public awareness through education, training programmes, interactive initiatives and media, among other means. Major themes can include sustainability, use efficiency and participation and common responsibility. Long-term awareness programmes should be tailored to specific local contexts. • Building partnerships with beneficiaries and the private sector, thus encouraging participation in modern, timely and well-monitored and metered water delivery services.
• Expanding water services to vulnerable communities and encouraging local initiatives in building and managing such services.
• Increasing irrigation efficiency from its current average levels of about 50 per cent to 70–80 per cent to increase irrigated areas by about 50 per cent and significantly reduce the Arab region’s water deficit and food imports.
• Increasing Arab cooperation in areas of water, food and energy trade. Establishing a common Arab market could be one step in this direction.
• Reforming the energy sector, raising awareness of water’s importance in energy-related decisions and establishing coordination and cooperation schemes between the energy and water sectors.
• Establishing energy-water balance in desalination. • Researching and developing efficient, reliable and scalable renewable energies, desalination and water treatment technologies that better meet the region’s demands.
• Studying climate change and investigating possible measures to limit its effects or adapt to them.
• Setting legal instruments to identify and regulate water rights, regulate water allocation among and within sectors and regulate permit systems for drilling wells.
• Investing in transfer and localization of water-related technologies and knowledge. This includes researching and testing nonconventional water resources (desalination, treated wastewater, rainwater harvesting, cloud seeding and irrigation drainage water), especially at low scales and for domestic uses.

There is a lot in this report for Canadian companies that have technologies, services, and experience relevant to the water needs of Arab countries. The full 168 page report is available at http://www.undp.org/content/dam/rbas/doc/Energy%20and%20Environment/Arab_Water_Gov_Report/Arab_Water_Gov_Report_Full_Final_Nov_27.pdf

J.M. Madeleine Donahue, a senior partner with the law firm Norton Rose Fulbright, has published a useful paper updating the liability situation for corporate directors in Ontario. The news, at least for directors, is not good. Her paper is titled Environmental liability of directors — lingering uncertainty.

A recent case involving Northstar Aerospace has complicated the advice on directors’ liability that came out of the Bata Industries case in 1992. The Bata case established a “minimum due diligence profile” under which, to avoid personal liability, directors were expected to take steps to ensure that their company was following a reasonable level of environmental performance. Now the Northstar case has thrown that situation into some doubt.

The Northstar situation relates to a contaminated industrial site in Cambridge, Ontario. Ms. Donahue states that what differentiates Northstar is most of the directors had not been directors when events leading to the Cambridge site contamination took place or at the time Northstar began to actively monitor the site’s contamination. Many directors had resigned before the MOE issued orders requiring them to carry out the remedial work at an estimated annual cost of $1.4 million ($15 million overall). Some were not even on the Northstar Canada board. For example, one was an innocent independent director of a publicly traded parent company. According to the MOE the “fault” of the Northstar directors was failing to anticipate the insolvency or allowing the filing under the Company’s Creditors Arrangement Act without the remediation being dealt with, and neglecting to set aside any funds for a 10-year remediation program.

Norton Rose Fulbright suggests the following conclusions from the Northstar case:

• The Ontario Ministry of the Environment is willing to look to current and former directors of Canadian companies and their corporate parents to fund remediation of seriously contaminated sites, particularly in insolvency and bankruptcy situations where the public interest warrants.
• The MOE has argued in more than one case that director and officer liability does not require any proof of fault. It flows from the mere fact that they are, or were, directors and officers. They have the onerous burden of proving they lacked personal management or control over the assets of a corporation and if they cannot do so, they may be held liable.
• Corporations need to evaluate and estimate future costs of remediation of their sites and of off-site impacted properties and arrange some form of financial assurance to ensure funds will be available to address the contamination before issues about the financial viability of the corporation arise.
• According to the Environmental Review Tribunal and the Ontario Ministry of the Environment, the issue is not so much whether directors and officers maintained “management and control” to the present time, but whether the environmental risk present when they did have management and control persisted to the present time.
• “Fairness factors” may take a back seat to having innocent parties remedy environmental contamination when the responsible polluters are deceased, bankrupt or wound up.
• The applicability of the Northstar precedent in jurisdictions other than Ontario is difficult to assess at this stage.

It is suggested that companies requiring advice on these issues consult with their legal team. The Norton Rose Fulbright discussion paper is more comprehensive than the summary presented here and may be found at http://www.nortonrosefulbright.com/ca/en/knowledge/publications/109233/environmental-liability-of-directorslingering-uncertainty

For the last 20 years the California-based National Water Research Institute has awarded the Clarke Prize, a medallion and $50,000, to an individual in the U.S. who has implemented better water science research and/or policy development to solve real-world water challenges. This year’s winner is Rhodes Trussell, Chairman and CEO of Trussell Technologies, Inc., an environmental engineering consulting firm based in Pasadena, California.

NWRI considers Dr. Trussell to be an authority on a vast number of treatment technologies, ranging from conventional treatments such as filtration, disinfection, and biological processes, to advanced treatment such as membranes and advanced oxidation. He is the author of peer-reviewed articles and technical reports on all of these topics, including the textbooks MWH’s Water Treatment: Principles and Design and Principles of Water Treatment. He has also worked on hundreds of water and wastewater engineering projects across the globe, and has developed the process design for treatment plants ranging in size from 1 to 900 million gallons per day in capacity. Because his focus is on implementing practical solutions to improve water quality and meet regulatory and public health needs, his efforts have resulted in better water policy and the widespread adoption and acceptance of many new treatment technologies.

Recipients give a lecture on a topic of their choice to the award ceremony. Dr. Trussell chose the topic How Safe Is Safe in the Treatment of Drinking Water for the Public? He provided an overview of the topic relative to both the growth of human commerce and the development of our scientific understanding. He said that the new era calls for a hybrid of the precautionary approach because, if implemented in a simple way, the Precautionary Principle could quickly deplete resources to solve problems that may not ultimately prove important. He suggested that there are four principles that environmental engineers might adopt as guidelines:

1. We should generally agree that we prefer not to have these man made chemicals in our environment or drinking water.
2. We should recognize that this first principle is not universally achievable; therefore, we need a screen to help make intelligent investments and decisions before settled science is available.
3. In the treatment of both drinking water and wastewater, we should seek continuous improvement, implementing affordable broad spectrum treatment technologies as they become available.
4. We should find substitutes for man made compounds that persist through our treatment processes and in the water environment, giving priority to those with adverse effects.

He went on to say that of the four guidelines, the second – developing a screening process for toxics – is arguably the most important and most difficult to achieve. The need for a screen that can be used before settled science is available, however, leads to an essential question: Does the dialogue in the drinking water community need a new, more robust discussion on the questions of risk and when water is safe? As a society, when we gather scientific data about what our collective risks are, we reach agreement easily.

For example, data from the Centers for Disease Control and Prevention (CDC) (CDC, 2012) show a U.S. citizen’s risk of dying from heart disease is about 24 percent, and the risk of dying from cancer is about the same (23 percent). But when we have a community or national discussion about the appropriate level of risk to which each citizen should be exposed as a result of a public service, such as the provision of drinking water, consensus is much harder to find. So far, where both environmental risk and risks associated with drinking water are concerned, our industry generally tries to engage the public in a discussion about the risk on the outcome side of a proposed project, attempting to find what risk is acceptable. The problem is one of communication.
When an engineer or scientist seeks to understand the safety of alternative outcomes, he or she normally begins by estimating the level of risk. For the layman, however, seeking safety is about avoiding risk altogether. Better bridges must be built between the scientist’s understanding of risk and the layman’s understanding of safety. That bridge might be the concept of de minimis risk. The term comes from the Latin “de minimis non curat lax,” or “the law does not concern itself with trifles.” A de minimis risk, then, is a risk that is too small to be concerned with. Someone exposed to that risk is considered “virtually safe.”
While most agree on the de minimis principle, there are often strong disagreements in specific circumstances as to what level of risk is, in fact, de minimis. For the public to accept the decision, the specifics cannot be resolved by science alone and are usually decided by an accepted authority, a regulator, court of law, or organizations like the National Academies.

Dr. Trussell’s lecture also includes discussion of considering both pathogens and anthropogenic chemicals in a similar framework as “Chemicals of Concern”.

He concluded his lecture by saying:

“Conquering waterborne disease was one of the greatest accomplishments of the Twentieth Century. Beyond treatment, our Twentieth Century paradigm was to seek natural water sources that had not been contaminated. The trace organic compounds we now see in drinking water are harbingers of a new era where the growth of population and commerce make the natural water paradigm increasingly unworkable.
Where trace organic chemicals are concerned, a new paradigm is needed for safe water. Ultimately, conventional regulations must be expanded to more effectively address impaired sources, but our traditional approach of risk assessment and regulation is too cumbersome to deal effectively with this new age. We should examine the Precautionary Principle to see if we can implement a more proactive approach.”

The entire Clarke 2013 lecture is available at http://www.clarkeprize.com/resources/2013_Clarke_Prize_Lecture2.pdf