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The group completed its first reading of the draft decisions on implementation and forests, and began its second reading of the decisions on land management, desertification and biotechnology.

PROGRESS IN THE IMPLEMENTATION OF DECISIONS BY THE SECOND SESSION OF THE CSD: The EU said the draft failed to reflect the entire agenda of the second session. The G-77/China introduced amendments in: paragraph 1 (follow-up), detailed consideration of follow-up efforts; paragraph 2 (health-environment concerns), an 'internationally' legally- binding instrument on chemical control; and paragraph 4 (lead in gasoline), preferential access to ESTs. Belarus added new paragraphs on sharing experiences, an international conference to promote sustainable development in countries with economies in transition, and a review of regional initiatives.

COMBATING DEFORESTATION: Canada, the G-77/China and the EU amended paragraph 21 (progress in forestry) to note the government- sponsored initiatives on forests. In paragraph 23 (finance), China proposed reference to the transfer of ESTs. The US proposed paragraph 23 bis on continued study of certification and labeling schemes. In paragraph 24 (global and regional initiatives), Australia added reference to the participation of indigenous people's organizations.

ANNEX I: Delegates then discussed the Chair's Draft on the Intergovernmental Panel on Forests.

1. Objective: The EU said paragraph 1 (the Panel) should refer to the negotiated formulations and objectives for the Panel.

2. Programme of Work for Priority Action: Japan suggested the title: 'Issues for Priority Action.' The G-77/China proposed a regrouping of the five issues into three categories. Poland added regional issues and national accounting. China inserted 'consumption patterns' in category I (national implementation and impacts). The EU reformulated category III: 'National implementation and links between forests and other sectors.'

3. Proposed Terms of Reference: The EU was concerned that some of the topics are considered elsewhere. In paragraphs I.1 - I.5 (national implementation), issues included: involvement of major groups; 'the fair and equitable sharing of benefits' rather than 'adequate compensation' for the commercial use of traditional knowledge; consideration of traditional knowledge; and addressing restoration of forest ecosystems in Central and Eastern Europe.

Many questioned the need for paragraph II.1 (national sovereignty). The G- 77/China supported it. Among the amendments to paragraphs III.1 (need for other instruments) and III.2 (work carried out by international organizations), the EU proposed that the Panel examine the need for a legally-binding instrument. The US and others agreed that this should be discussed at the conclusion of the Panel's work. In paragraph IV.2 (criteria and indicators), the US and Canada agreed that the Panel could study the feasibility of further developing internationally-agreed criteria and indicators. The EU disagreed. In paragraph V (trade in forest products), the G-77/China proposed removing boycotts 'on the use and trade in forest products.' The EU wanted to delete trade distorting practices and major factors affecting the value of forest products. The EU called for preparation of a framework of international understanding on timber certification.

4. Panel Composition, Organization and Conduct of Work: The G- 77/China said that the Panel should function in accordance with the CSD rules of procedure. The US and Canada stressed that IGOs and major groups should 'participate fully' as observers in the Panel and its subsidiary bodies. There was little support for an organizational session. Many did not support a dual chairmanship.

5. Secretariat and Financial Support to the Panel: The G-77/China and the EU said that the role of FAO as task manager for forests should be highlighted. The EU wanted to delete the reference to the direct hiring of new staff. The US thought that a direct hire on a temporary base would bring neutrality to the unit.

The Global Forest Policy Project said that the Panel should: encourage the participation of major groups; conduct an independent assessment of existing instruments; address the underlying causes of deforestation and forest degradation; avoid discussing a global set of criteria and indicators; and prevent trade-related issues from dominating discussion.

INTEGRATED LAND MANAGEMENT: There was no agreement on a call for additional financial resources and EST transfers in paragraphs 15 (time-frame) and sub-paragraph 18(e) (ESTs and resources). In paragraph 4 (know-how and EST transfers), the G-77/China objected to an Australian proposal for EST transfers, 'where mutually agreed.' In sub- paragraph 18(c) (land and water conflicts), delegations offered alternative language on land and water conflicts within and between cities.

COMBATING DESERTIFICATION: After some minor changes, delegates reached agreement on this chapter.

BIOTECHNOLOGY: In paragraph 1 (future reports), the EU called for more emphasis on 'ethical' considerations with particular reference to 'genetic engineering, when human genetic material is involved.' The US and the EU objected to the monitoring and assessment role advocated in paragraph 2 (contribution of biotechnology). In paragraph 3 (genetically modified organisms), the EU wanted to remove brackets from language on an internationally-agreed biotechnology regulatory framework. The US disagreed. The US objected to the precautionary principle in paragraphs 1 and 3. The G-77/China objected to an EU proposal to delete the bracketed language on national and regional legislation in paragraph 5(e).

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