Distinguished Chairman, Vice Chairpersons, Members of CCICED and Group Leaders of Task Forces,

　　Ladies and Gentlemen,

　　First of all, I would thank the Bureau to appoint me as Secretary General of China Council for International Cooperation on Environment and Development (CCICED). I am personally grateful to the confidence you all put in me. I feel deeply big responsibilities on my shoulder. I will work together with all members of CCICED and contribute my efforts to the work of CCICED, building on the good foundation laid for China Council by my predecessor.

　　In the first half of this year, China suffered from the outbreak of SARs. Under very difficult circumstances caused by this unexpected situation, we all worked together in common efforts to proceed orderly with the work of CCICED and various task forces established under it. We had achieved considerable progress. Now please allow me to report briefly on the work of CCICED in the past year.

　　I. Studies and Adoption of the CCICED Recommendations by Relevant Central Government Departments and Local Governments

　　By the end of September 2003, the Secretariat had received feedbacks concerning the studies and adoption of the CCICED recommendations, respectively from 20 relevant departments under the State Council and their associated institutions, and 6 provinces and province-level municipalities. The central government departments that had provided feedbacks include the Ministry of Foreign Affairs, the State Development and Reform Commission, the Ministry of Science and Technology, the State Defense Science and Industry Commission, the Ministry of Finance, the Ministry of Construction, the Ministry of Railways, the Ministry of Transportation, the Ministry of Water Resources, the Ministry of Commerce, the State Customs Administration, the State Quality Supervision Administration, the State Environmental Protection Administration, the State Forestry Administration, the State Council Office for Legal Affairs, the Chinese Academy of Sciences, the State Council Center for Development Research, the State Meteorological Administration, the State Oceanographic Administration, the National Company for Marine Oil. The provinces and province-level municipalities that had submitted feedbacks include Beijing, Shaanxi, Chongqing, Guizhou, Jiangxi and Guangdong.

　　The feedbacks received were encouraging. Below are some examples of this:

　　A range of laws and regulations designed to promote environmental protection and sustainable development in China have begun enactment and implementation from this year. These laws and regulations include Cleaner Production Promotion Law of the People's Republic of China (January 2003), Environmental Impact Assessment Law of the People's Republic of China (September 2003), Regulation for Returning Cropland to Forestry (January 2003), and Regulation Concerning Levying, Use and Management of Pollution Discharge Fees (July 2003). The State Council had promulgated the "Recommendation for Strengthening the Prevention of Introduction of Alien Invasive Species", which aims to prevent the introduction of alien invasive species into China.

　　The National Inter-Ministerial Coordination Meeting for Environmental Protection and the National Inter-Ministerial Coordination Meeting for Protection of Biological Germplasm Resources had been established as mechanisms to strengthen the decision making related to sustainable development and improve the coordination about environmental protection among relevant government departments.

　　The relevant CCICED recommendations had been considered and adopted in formulating the Programme of Implementation of Sustainable Development in the early 21st Century as well as relevant plans and programmes for environmental and resources pricing, promoting cleaner production, forest and grassland conservation.

　　Support to environmental protection and ecological conservation had been achieved through adjusting the existing tax categories in the current taxation system. Thus various taxation measures will be used to enhance environmental protection and ecological conservation.

　　Measures had been taken to encourage various forms of funds and capital to invest in the municipal and public utilities. The operation across regions and sectors is encouraged as well so as to establish gradually the system of licensed operation of the municipal and public utilities.

　　The analysis and assessment of the ecological, economic and social benefits from the projects of returning cropland to forest had been undertaken so as to further improve the policy for returning cropland to forest and grassland.

　　Local governments had also actively studied and adopted some recommendations. For example, Beijing had established a mechanism for environment management which aims to achieve long-term benefits. Beijing had also identified goals by phases for controlling air pollution in which considerable progress had been achieved. Chongqing organized a survey on biosafety issues. The survey was focused on the distribution and scale of alien species introduced into the city and their impacts on local ecosystems.

　　Clearly, there were much content and many areas covered in the feedbacks provided by various departments and local governments. The above is only part of the actions implemented in response to the CCICED Recommendations. To give a full account of these feedbacks, the Secretariat has compiled all these feedbacks which will be available to all of you as an annex to this report so that you could have more information in this regard.

　　II. Personnel Adjustment of CCICED

　　Following the approval of the State Council, Vice Premier Zeng Peiyan acts as Chairman of China Council for International Cooperation on Environment and Development.

　　The adjustments of the International Executive Vice Chair, the Secretary General, and the Vice Secretary General are proposed as follows:

　　Following the approval of the Chair of CCICED, Mr. Paul Thibault, the new President of Canadian International Development Agency (CIDA) will be the International Executive Vice Chair. I myself will be the Secretary General and a member of CCICED. As required by the work of CCICED, it is proposed that Mr. Xu Qinghua, Director General of the Department of International Cooperation of SEPA and Mr. Peng Jinxin, Director General of the Department of Policies and Regulations of SEPA, would work as Vice Secretary General to assist with the work of the Secretary General, which has been approved by the Chinese Executive Vice Chair Xie Zhenhua.

　　The adjustments of Chinese members are as follows:

　　Mr. Wang Guangya, the former Vice Minister of Foreign Affairs, Mr. Xie Xuren, the former Vice Chairman of the State Economic and Trade Commission, Mr. Wei Jianguo, the former Vice Minister of the Ministry of Foreign Trade and Economic Cooperation will not be members of CCICED, due to the Chinese government restructuring and changes in their positions. It was proposed that the following candidates would be considered as new Chinese members of CCICED: Mr. Shen Guofang, Assistant Minister of the Ministry of Foreign Affairs, Mr. Yi Xiaozhun, Assistant Minister of the Ministry of Commerce, Mr. Wang Luolin, Vice President of the Chinese Academy of Social Sciences, Mr. Shen Guofang, Vice President of the Chinese Academy of Engineering, Mr. Shao Nin, Vice Chairman of the State Commission for Supervision and Management of State-owned Assets.

　　The adjustments of international members are as follows:

　　It was proposed that two new international members would be invited to join the CCICED. One is Mr. Diabre, Associate Administrator of the United Nations Development Programme. The other is Madame Catherine Day (?), Director General, Division of Environment of the European Union.

　　The resumes of the above new Executive Vice Chair, the Secretary General and the Vice Secretary General as well as the new Chinese and international members had been circulated to you all this morning. The related proposals for personnel adjustment of CCICED had been adopted at the session this morning. While welcoming the new International Executive Vice Chair and new Chinese and international members, we would like to express sincere appreciation to the outgoing International Executive Vice Chair, Chinese and international members and the Secretary General. We will always remember the contributions they had made to the work of CCICED.

　　III. Innovating the Work of CCICED

　　To ensure that various task forces will organize and undertake studies on relevant topics in time, it is necessary to identify and adopt as early as possible the themes for the Annual General Meeting of CCICED of the next few years. With this, the Lead Experts Group and relevant sides will be able to select topics more oriented at the new themes and establish new task forces to work on these new themes. Since the CCICED Bureau required that the theme selected for the AGM of CCICED must take into consideration priority areas identified by the Chinese Government, the Lead Experts Group had undertaken serious discussion and proposed the following areas and range of themes for consideration at the AGM of CCICED of the next three years: Agriculture and Rural Development for the AGM of 2004; Urbanization/Development of the Eleventh Five-year Plan for the AGM of 2005; and Social Progress and Xiaokang Society(An All-round, Well-off Society) for the AGM of 2006. The proposed theme for 2006 is intended to provide relevant recommendations to the development of the Eleventh Five-year Plan. Mr. Xie Zhenhua, the Chinese Executive Vice Chair, has approved in principle the recommendations made by the Lead Experts Group. The meeting of the Bureau held yesterday had also discussed about this subject and adopted in principle the proposed range of themes. I would like to welcome your comments on these proposed themes.

　　To upgrade the quality of the recommendations of CCICED to the Chinese Government and improve the traditional approaches of CCICED to disseminate its recommendations, the Lead Experts Group suggested ways to innovate the work of CCICED. It was suggested that the future AGM of CCICED would not produce general policy recommendations. Instead various task forces will present their reports directly to the State Council as recommendations, following the format agreed for all the reports. Such reports will contain a 3-page copy of policy recommendations that are extracted and refined from their work reports and will be presented for discussion at the AGM. After the discussion and adoption at the AGM, the 3-page copies of policy recommendations of various areas (with the detailed work report of respective task forces as annex to this 3-page copy of policy recommendations) will be presented to the leaders of the State Council accordingly. The presentation of the Issue Paper prepared by the Lead Experts Group will basically follow this approach. As recommended by international and Chinese members and experts at the second meeting of Phase III of China Council, the recommendations (3 pages or so) will be extracted and refined as well from the Issue Paper and discussed at the AGM. This approach will make it possible to report our research results directly to the State Council. This is also a requirement to us from the objectives and the mission of China Council. The Lead Experts Group had requested various task forces to undertake pilot work in this regard before this meeting was convened. It is hoped that this approach will be supported by you all and succeed.

　　IV. The Work of the Lead Experts Group

　　The establishment of the Lead Experts Group is one of the innovative measures adopted by the CCICED. From the practical benefits, this reform has proven successful and effective. The Lead Experts Group has seriously fulfilled their responsibilities. They had convened three meetings to review the proposals made by new task forces, and provided their comments and recommendations, which had provided a scientific basis for the Bureau to approve the establishment of new task forces. To prepare for the AGM this year, the Lead Experts Group invited the Chinese group leaders of five task forces that will present their reports at the AGM this year to make the pre-meeting presentations. The Lead Experts Group discussed these reports and provided comments and recommendations for improvement. The benefits for doing this are: (i) to facilitate and strengthen exchange and communication among the Lead Experts Group and the group leaders of various task forces for further mutual understanding and support, which lays a good foundation for working together; (ii) to synergize the research content of various task forces to avoid duplications and overlaps so that various task forces will have more focused research areas and the quality of their work reports will be much improved.

　　V. The Work of Task Forces

　　This year, the Task Forces on Energy, Enterprises, Industry, Circular Economy, Investment and Financing, had actively undertaken their work. A total of 6 international workshops and conferences were convened. The task forces had 13 working meetings. 5 domestic study tours and 1 international study tour were organized. The review of relevant plans formulated by Shenyang and Guiyang was organized. The key enterprises in four sectors had been selected for specialized surveys and studies to address the problems they faced. The detailed information concerning these surveys and studies is contained in the work reports of relevant task forces.

　　The Bureau has approved the establishment of the Task Forces on Integrated River Basin Management, Pollution Control from Agricultural Runoffs, WTO and Environment, Environmental and Natural Resources Pricing and Taxation, Sustainable Transportation, Protected Areas, and Agricultural and Rural Development Policies. These task forces made best use of their time to proceed with their work. They had 1 international workshop, 10 working meetings, 1 domestic study tour and 1 international study tour. They had demonstrated some new styles of work. They paid more attention to the synergy among various task forces and undertook more exchanges among the task forces to benefit from the strengthen of other groups to avoid their own weakness. 9 out of 14 Chinese group leaders of these newly established task forces are new, and their resumes had been circulated to you all for information.

　　Currently, we are considering establishing some new task forces to undertake studies on the themes possibly selected for the AGM of 2005 and 2006. Considering these possibly selected themes, relevant international institutions and domestic departments proposed establishing the Task Forces on Environment Management, and Environment and Health. It is hoped that you all provide comments and recommendations concerning the areas where a task force should be established or studies should be undertaken, taking into consideration the above-proposed range of themes. This morning, relevant comments on establishing new Task Forces proposed by Vice Chair Liu Jiang should be considered.

　　VI. The Work of the Secretariat

　　With the leadership of the Bureau, the Secretariat had done the following work in addition to its routine work.

　　1. Preparation was made for the adjustment of the Bureau and members, following the guidance and instruction of the Bureau.

　　2. Coordination and advice were provided to the establishment of task forces and their work. The Secretariat also participated in the working meetings, seminars, study tours and relevant activities of various task forces. The Secretariat provided information to various task forces to facilitate the cooperation of various task forces with relevant international organizations and promote the cooperation among the task forces. The Secretariat also provided support to the conduct of research activities by various task forces and promoted the dissemination of their research results.

　　3. Efforts were focused on the compilation of the feedbacks to the CCICED recommendations. The feedbacks from various departments and local governments had two characteristics. The first is that the number of feedbacks was bigger than that received in the previous years. A total of 26 provincial departments had submitted their feedbacks in writing. The situation of receipt of feedbacks is improving year after year. The second is that some departments not directly involved in the work of CCICED had also studied and adopted relevant recommendations of CCICED, from the perspectives of achieving sustainable development. Some departments had even pointed out some inappropriately-expressed content in the recommendations after careful studies of them. The CCICED Recommendations are being disseminated and implemented in a broader range and at various levels. The central government departments and local governments pay more attention to sustainable development in the process of decision making, which indicates that the implementation of the strategy for sustainable development is winning more and more support and actions.

　　4. The Secretariat had been making preparations for the AGM this year. The first task was to identify the theme for the AGM. The Sixteenth National Congress of the Chinese Communist Party had set the goal for establishing an all-round and well-off society in China. Following the discussion with the Lead Experts Group and the approval of the Bureau, the theme for the AGM this year is: Establishment of a well-off Society and New Sustainable Industrialization Mode. The second task was to invite keynote speakers from both the Chinese and international sides and the speakers for special presentations, following the guidance of the Bureau. This morning you all had a chance to hear their speeches and presentations.

　　5. Efforts were also made to strengthen the capacity of the Secretariat itself, including organizing training on project management, financial and time management for project management. As a result, the overall project management level of the Secretariat had been considerably improved.

　　6. The Secretariat had updated the website of CCICED, redesigned the structure of the website, added new items for navigation and set up a safe, very reliable email system. In addition, an electronic forum was established on the website of CCICED. A database that pooled all the results of CCICED in its history was put on the website to allow interested audience to find relevant content any time, which had set a new platform for information exchange and dissemination. You are welcome to access the website of the Convention (www.cciced.org) for relevant information.

　　7. The Secretariat had also strengthened the coordination among task forces and guidance to their routine work. The Secretariat staff had also participated in some seminars, working meetings, study tours and relevant activities organized by various task forces. The Secretariat actively provided information, facilitated the cooperation of various task forces with relevant international organizations, promoted the cooperation among various task forces and supported the conduct of research activities of various task forces and the dissemination of their research results.

　　VII. Core Fund Mechanism

　　Following the guidance of the Bureau that a Core Fund Mechanism should be established for the third phase of China Council, the Secretariat and the CCICED Secretariat Canadian Office had discussed many times about this issue and reached consensus on this. A draft of the "Principles for Core Fund Mechanism of CCICED Phase III" was prepared with the help of the Stockholm Environment Institute of Sweden. The Secretariat had convened a workshop on core fund mechanism. The representatives from the embassies of main donor countries and international organizations were invited to this workshop to discuss the draft document. I would like to take this opportunity to brief you about the proposed basic principles, the range and percentage for use of fund.

　　1. Co-management Principle. The donor country could choose the Secretariat or the CCICED Secretariat Canadian Office as a unit to manage the fund. The CCICED Secretariat and its Canadian Office will discuss and identify the amount and scope of use of the fund for the activities of various task forces and relevant activities of CCICED. The Secretariat and its Canadian Office will exchange on a regular basis the information concerning the donation and the expenditure.

　　2. Principles for Use and Management of Fund for Task Forces. The task forces can accept the donation only after it is approved by the Bureau. The application for fund for a task force will be discussed by both the Chinese and international group leaders of that task force and the budget must be signed by both group leaders. The budget of task forces will be presented for approval by the Executive Vice Chairs of the Bureau, and relevant information will be provided to relevant donors. With all the above procedures completed, the Secretariat or its Canadian Office will allocate the fund to the task forces concerned.

　　3. Principles for Auditing and Supervision. The CCICED Secretariat and its Canadian Office will open a specialized account to receive the donation into the Core Fund. The fund will be managed and used in accordance with relevant international standards and rules. The third-party auditing agency will be invited to audit the use and the management of the Core Fund in accordance with relevant international standards and rules.

　　By now, the countries and institutions that had agreed to participate in the Core Fund include China, Canada, Sweden, Norway, Germany and Shell Company. The total amount of the fund is about 10.67 million USD. 80% of the core fund was used for the activities of various task forces and 20% for relevant activities of the CCICED. The meeting of the Bureau held yesterday had discussed and adopted in principle the basic principles and the range of use of the core fund. I would like to invite you all to give comments on these principles.

　　VIII. Overall Situation of Funds for CCICED

　　Regarding the funds for CCICED, please find and review the Financial Report and Budget provided by Secretariat Canadian Office according to the actual situation, which is included as the Annex II to this report.

　　Annex І

　　A Summary of Reponses

　　by Various Departments of the State Council

　　to the Recommendations of the 1st Meeting of the 3rd Phase of CCICED

　　The Recommendations of the First Meeting of the Third Phase of CCICED to the Chinese Government covers 8 areas in 2 parts. By the end of September 2003, the Secretariat had received feedbacks from 20 departments of the State Council and 8 provinces/municipalities. The 20 departments of the State Council are: the Ministry of Foreign Affairs, the State Development and Reform Commission, the National Defense Science and Technology Commission, the Ministry of Finance, the Ministry of Construction, the Ministry of Railway, the Ministry of Transportation, the Ministry of Water Conservancy, the Ministry of Commerce, the State Customs Administration, the State Quality Supervision Administration, the State Environmental Protection Administration, the State Forestry Bureau, the Law Office of the State Council, the Chinese Academy of Sciences, the Development Research Center of the State Council, the State Meteorological Administration, the National Oceanic Bureau, and the General Ocean Oil Corporation. The 8 provinces/municipalities are: Beijing, Tianjin, Jilin, Jiangxi, Guangdong, Chongqing, Guizhou, and Shaanxi. Their responses are summarized as follows.

　　Part 1: Responses to the Council's Recommendations on the Transition to Sustainable Development

　　1) On improving governance for environment and development

　　The State Development and Reform Commission (SDFC): The Action Guides for Sustainable Development in the Early Stages of the 21st Century, revised under the leadership of SDFC, has been approved by the State Council and put into effect. It provides the direction for China to promote the implementation of sustainable development in many years to come. The National Economic and Social Development Plan for 2003 included detailed measures about economic structural adjustment, ecological conservation and environmental protection, public health and public environmental improvement, and sustainable agriculture. It also kicked off preliminary research on key issues for the 11th Five-Year Plan, which included sustainable development issues as key items. It is also drafting the Regulations for Plan Making, which will highlight the strategic importance of sustainable development. Jointly with other departments, it formulated and promulgated the Regulations on Pollution Fee Levying Standard, which formalizes the levying of waste water treatment fees and aims to promote the industrialization of waste water treatment and garbage treatment. It also drafted the Circular of the State Council on Using Price Lever to Promote Water Resource Conservation, which is expected to be approved by the State Council and issued soon. Jointly with the State Environmental Protection Administration, the Ministry of Health, the Ministry of Finance, and the Ministry of Construction, it proposed a Hazardous Waste Treatment Fee System in order to promote the treatment of hazardous waste treatment. This proposal is expected to be implemented once it is approved by the State Council. It also devoted major efforts to water pricing reform, and will increase water resource consumption fee, promote water supply pricing reform in cities, implement a waste water treatment fee system, encourage water recycling and the construction of water recycling infrastructures, and improve the agricultural water pricing system.

　　The National Defense Science and Technology Commission (NDSTC): NDSTC thinks the Council's recommendations are highly valuable to the development of national defense sciences and technologies, and has integrated sustainable development principles into the development policies of its industries, namely, the national defense sciences and technologies should take the lead in adopting a new industrial development model with high technology, economic efficiency, low resource consumption and environmental pollution, and effective utilization of human resources.

　　The Ministry of Finance (MOF): MOF is continuing to fulfill its obligations as a member of the National Inter-Ministerial Meeting on Environmental Protection and the Joint Inter-Ministerial Committee on the Protection of Biological and Species Resources. Jointly with other departments, it issued the Circular on Promoting Water Supply Pricing Reform in Cities, and the Circular on Implementing the Urban Household Garbage Treatment Fee System to Promote Waste Treatment Industry. It is actively promoting the urban waste water treatment industry and the municipal waste treatment industry according to the Regulations on Pollution Fee Levying and Use. It has also established an innovation fund for small and medium sized enterprises to encourage their research and development of cleaner products.

　　The Ministry of Construction (MOC): MOC will further strengthen its early-stage participation in the application and approval process for the plans of various industries, and promote information exchange and functional coordination with other relevant departments. It issued Comments on Speeding up the Development of Municipal Utilities through Market Mechanism to encourage enterprises to participate in the construction and operation of waste water and garbage treatment facilities.

　　The Ministry of Railway (MOR): MOR is formulating a plan for constructing green railways with a view to promoting the greening of railroads. It is also formulating the relevant regulations on the health environment of railways. It has organized demonstration projects of new toilet equipment on trains, and made new progress on the management of solid wastes in railway stations.

　　The Ministry of Transportation (MOT): MOT is improving the environmental protection network, the monitoring network, and the environmental information network for the transportation sector. It has strengthened pollution prevention and control, and increased efforts of science and technological development for the environmental aspect of the transportation sector, including research on ecological conservation for roads, ports, and airways, and on cleaner production. It is also actively implementing environmental impact assessment for transportation planning.

　　The Ministry of Water Conservancy (MWC): MWC is exploring on modern water conservancy and sustainable water conservancy, and regards water resource management/protection, water use efficiency, and building a water saving society as its most basic missions.

　　The State Quality Supervision Administration (SQSA): SQSA encourages the research and development of cleaner products. For example, it has decided to replace CH3Br2 with SF2, which is more effective and less toxic. It is actively implementing supervision on the quality of the food products included in the Classification and Coding of National Industrial Agricultural Products, and discloses the supervision results to the media, such as CCTV and China Quality News, on a regular basis.

　　The State Environmental Protection Administration established and promoted the Joint Inter-ministerial Meeting on Environmental Protection to promote coordination and cooperation among government departments on environmental protection. It also devoted efforts to promote new partnership among government, enterprises and the public. It took comprehensive measures to encourage enterprises to protect the environment. It coordinated the relevant government departments in carrying out research and formulating a new pricing system for electricity generated by networking coal-fired power plants, established an equitable competition mechanism for electricity prices, and encouraged power plants to build desulfurization facilities. Jointly with the State Development and Reform Commission and the Ministry of Construction, it formulated the Regulations on Municipal Waste Water and Garbage Treatment Fees. It set up 5 national associations to promote public participation in environmental protection. It is implementing a Daily Air Quality Forecast and Public Reporting System, and a weekly public reporting system for the quality of sea bathing waters. It also reports on the environment of offshore sea areas and the water quality of various sections of river basins. It plans to publish new progress on pollution prevention and control of the "Two Controlled Areas", as well as the air and surface water qualities of 113 key cities. It also plans to disclose information to the public about the environmental behaviors of enterprises and the water quality of drinking sources for cities.

　　The Law Office of the State Council played a key role in the formulation and implementation of the Regulations on Converting Cropland Back to Forests and the Regulations on the Management of Genetically Modified Organisms and Bio-safety by the State Council. It is also actively involved in the formulation of the Regulations on the Levying and Use of Pollution Fees by the State Council, which makes specific stipulations about how to levy and use pollution fees.

　　The Development Research Center (DRC) of the State Council thinks that the Council's recommendations are valuable to their research, such as the recommendations on structural adjustment and sustainable development, transportation and sustainable development, conversion of cropland back to lakes in the middle reaches of the Yangtze River, recycling economy, and energy conservation management by the government under a market economy. DRC has conducted research on the sustainable development of industries, cleaner production, and poverty alleviation jointly with the State Planning Commission and the former State Economic and Trade Commission.

　　The State Meteorological Administration strengthened capacity building for sand storm monitoring and pre-warning, and is implementing the "Phase I Project of the Sand Storm Monitoring and Pre-warning System", and developing integrated sand storm forecasting models and optimal pre-warning models. It also kicked off an ecological environmental monitoring and information service program in order to implement mobile monitoring of the resource and ecological conditions of all nation but especially the key areas, and to publish reports of monitoring results and forecast.

　　The state Oceanic Bureau organized ocean environmental monitoring, and established red tide monitoring zones for red tide prevention and control. It strengthened supervision and management of waste dumping into oceans and offshore petroleum exploration and development activities. It established new protected ocean areas to protect the ecology of oceans. It also established an ocean information system and implemented a disclosure system for administrative information.

　　The General Ocean Petroleum Corporation paid special attention to the development and use of cleaner energy and the sustainable development of ocean petroleum. In cooperation with Guangdong Province and Fujian Province, it constructed liquefied natural gas receiving stations, and imported liquefied natural gas to replace coal as fuel for power generation and household use.

　　Beijing Municipality regards sustainable development as a basic strategy for urban development. It established a "3-level management and 4-level supervision" guarantee system that covers the various levels of government and applies to various areas from administration, law enforcement to public participation. It formulated and implemented air pollution control measures in 9 phases, and established a "coordination meeting" mechanism for various local departments and the central government branches that are located in Beijing. It gradually increased urban waste water treatment fee level, started to collect garbage treatment fees, adjusted SO2 fees and its application scope, lowered the price of electricity used for heating single-story houses, adjusted the price for heating supply, reduced fees that used to be required for shifting to cleaner energy sources, provided compensation for shifting from coal-fired boiler to cleaner energy sources, and granted preferential policies for polluting industries to move to other locations. The municipal service industries were also being reformed. BOT and TOT have been adopted for the construction of public utility facilities. An environmental quality reporting system has also been established, and the administrative information disclosure system has been further promoted.

　　Tianjin Municipality set up a hazardous waste treatment and disposal center, which has an annual treatment and disposal capacity of 30,000 tons. It has also established an environmental industry park in Jinghai to process and utilize wastes imported from other countries.

　　Jilin Province devoted active efforts to implementing the National Guidelines for Ecological Conservation. Various municipalities/prefectures have formulated ecological conservation plans. The province strengthened the protection of nature reserves, and built some ecological demonstration regions. It also utilized ecological capital to build organic food production bases. It actively promoted the construction of environmental infrastructure in cities and key ecological environmental engineering projects. It also aims to integrate environmental policy making with development policy making. In cities above county level, zoning was implemented for drinking water source areas.

　　Jiangxi Province established a provincial-level lead institution for implementing sustainable development strategy. Its purpose is to streamline environmental management mechanism, promote legislation for environmental protection, unify planning, management and supervision, and further improve the coordination system among various departments.

　　Guangdong Province requires all levels of governments within its jurisdiction to establish "environment and development coordination meeting" system, and organize relevant government leaders and experts to examine key environment related policies. Key social and economic development policies must give priority to ecological conservation, and environmental impact assessment must be conducted for such policies. Guangdong Province has also conducted studies on economic policies for desulfurization by coal-fired power plants.

　　Chongqing Municipality has established a preliminary system of integrated decision making for sustainable development. The municipal government is required to listen to the opinions of the environmental protection department whenever it makes key policies or before it launches key projects. The no. 1 heads of counties/cities will be held accountable for the environmental performance of their counties/cities. Environmental responsibility goals were set up for various government departments. Waste water and garbage treatment fee standards were adjusted to promote their development under market mechanisms. Environmental labeling system has been established, and some environmental label products and green food products were publicized. Development of civil environmental protection organizations was encouraged. Transparent environmental information disclosure system was established. The status of the environmental is being reported on a regular basis. Also established were a Daily Air Quality Reporting System and a Weekly Drinking Water Source Quality Reporting System. Public environmental information screens were erected to publicize environmental quality data and relevant legal and policy information.

　　Guizhou Province formulated a series of local environmental laws and government regulations, such as the Regulations on Environment Protection of Guizhou Province. The Environmental Goals Responsibility System was established. Key environmental projects were integrated into local and sectoral economic and social development plans. The province utilized the "International Market Promotion Fund for Small and Medium Enterprises" to provide financial support for small and medium enterprises that had been ISO14000 certified. Waste water treatment fees will be levied before the end of 2003, and garbage treatment fees will be levied on a gradual basis. The development of waste water and garbage treatment industries will be sped up. Municipal public utilities will be developed through market mechanisms. Disclosure system for administrative information, such as project approval, examination, and pollution fee levying, will be established.

　　Shaanxi Province has implemented an environmental quality responsibility system in which the heads of various levels of governments are held accountable. An integrated decision making mechanism for environment and development has been established, and the functions of the various departments in that regard have been clarified. Relevant policies for garbage treatment fees were formulated. Cropland reclamation from lakes and invasion into river bank areas were banned. An agricultural meteorological monitoring network has been established, and a monitoring and pre-warning service system for meteorological disasters is being planned. Development of biomass energy will be a focus of energy conservation in rural areas. In the northern regions, wind power will be more widely used. Use of mines and mining rights will be paid. Water conservation in agricultural areas will be carried out in light of local conditions. Gasification projects of natural gas, central heating projects and clean energy projects will be carried out in cities. Power generation projects using natural gas will be kicked off, and the share of power that is generated by natural gas shall be increased.

　　2) On Sustainable National Economy

　　The State Development and Reform Commission formulated relevant policies and regulations to promote cleaner production. Jointly with the State Environmental Protection Administration, it promulgated the second Directory of Cleaner Production Technologies for Key Industries. An "Energy Efficiency Labeling System" was launched to promote recycling and reuse. It would, jointly with the State Quality Supervision Administration, promulgate Regulations on Energy Efficiency Labeling with a view to guiding consumers to buy and use products that are labeled as energy efficient, promoting the development of resource reuse industries, and promoting recycling and reuse.

　　The National Defense Science and Technology Commission, in its formulation of civil aeronautic development policies, has decided to develop meteorological satellite series, resource satellite series, ocean satellite series, and environmental and disaster monitoring and forecasting satellite series in order to provide advanced, reliable and effective technological support for meteorological, oceanic, and land resource departments.

　　The Ministry of Railway established a cleaner production assessment indicator system according to the Law on Cleaner Production to promote cleaner production within the railway sector. In response to the reality that China lacks oil and gas resources, it will promote the construction of electric railways.

　　The Ministry of Water Conservancy sticks to the principle that humans and nature should be harmonized. During their anti-flooding efforts, they held on to the principle of comprehensive treatment. While making effort to strengthen and take other measures for flood control, they adopted such measures as converting cropland back to lakes/river, and dismantling embankments to smooth water flow. As regards water use, they give high priority to ecological water sue. They have also taken measures like converting cropland back to forest/grassland, closing mountains for forest protection, recuperating grassland by banning grazing for certain periods of time and grazing rotations.

　　The State Environmental Protection Administration carried out pilot projects in 5 industries (which were paper making, fermenting, food, pharmaceutical, and cement) to phase out out-dated technologies, products, and production capacities. The focus of environmental law enforcement by SEPA has shifted to breaking up local protectionism and preventing polluting enterprises that were forced to shut down or stop production lines from resuming their polluting behaviors. SEPA devoted major efforts to promoting cleaner production in enterprises, promoting certification of the ISO14000 environmental management system, and establishing recycling economy zones. National-level demonstration ecological industry parks have been established in some provinces. SEPA also implemented environmental labeling certification and cleaner production auditing, accelerated EMS certification, and promoted mutual international recognition of certification for organic food and environmental labeling products so as to promote export of these products.

　　Beijing Municipality integrated environmental protection into its social and economic development plans. It adjusted its economic structures accordingly, encouraged proper consumption, and promoted public environmental education. It devoted major efforts to developing modern manufacturing industries, and reduced industries that were highly resource consuming and heavily polluting. It continued to implement cleaner production, recycling economy, and ISO14000 certification in industrial enterprises. It also paid high attention to building civilized communities and green communities, and promoting the wide use of green products and green food.

　　Tianjin Municipality clearly pointed out in their response to CCICED Secretariat that it would promote recycling economy and implement sustainable development strategy. The notion of recycling economy is clearly reflected in the implementation of Tianjin's 10th Five Year Plan for Environmental Protection. While adjusting its economic structure and reforming its enterprises, Tianjin promoted cleaner production and the transformation of economic growth mode. It introduced advanced technologies, especially the cleaner production technologies and best applicable pollution prevention and control technologies. It organized efforts in Tianjin Economic and Scientific Development Zone (ESDC) to compete for the honor title of National-Level Ecological Industrial Park. Within the Tianjin ESDC, a symbiotic network has been formed, and a complete industrial ecology system will be established. By utilizing its convenient transportation and the advantage provided by the Bejing-Tianjin Economic Zone, it hopes to be built into a circulation hub for Northeast Asia within 10 years.

　　Jilin Province promoted the phasing out of enterprises that use out-dated technologies, are highly energy- and resource-consuming and heavily polluting through industrial structural adjustment, and devoted major efforts to promoting cleaner production.

　　Jiangxi Province combined their efforts of mountain treatment, river treatment and poverty alleviation in order to establish a sustainable ecological system consisting of mountains, rivers and lakes. During its economic structural adjustment, it advocated recycling economy, supported enterprises to carry out technological innovation, reduce energy use of resource consumption, implement all-process pollution prevention and control, and reduce pollution discharge during production. It also promoted cleaner production, conducted cleaner production demonstrations, and implemented ISO 14000 certification and eco-labeling certification.

　　Guangdong Province helped enterprises implement cleaner production. It is trying to build a contingent of cleaner production experts. Its effort has resulted in some cleaner production demonstration enterprises. Guangdong Province also carried out relevant research on cleaner production technologies and products, and formulated local policies and laws on cleaner production.

　　Chongqing Municipality regards sustainable development as a key strategy for economic development. It promoted the construction of waste water and solid waste treatment plants in the reservoir areas of the Three Gorges. It intensified efforts to adjust the structures of industrial enterprises, and completed the cleaning of solid waste on the bottom of the Three Gorges Reservoir area. It promoted cleaner production and recycling of waste. It also formulated cleaner production guidelines and implemented pilot projects to promote recycling economy.

　　Guizhou Province will build the capital city of Guiyang into an ecological city characterized by recycling economy. Based on that, it aims to establish a sustainable economy. The Guidelines for Planning and Research for the Construction of Guiyang into An Ecological City Characterized by Recycling Economy has been approved, and the first recycling economy demonstration projects have been identified. So far Guiyang City has established the nation's first recycling economy website. The province plans to carry out pilot projects in Bijie region to explore ways of sustainable development in karst mountain areas, including poverty alleviation, ecological conservation, and population control.

　　3) On Education and Knowledge for Sustainable Development

　　The Ministry of Transportation utilized various forms and means to publicize the importance and necessity of sustainable development and promote public environmental awareness of sustainable development.

　　The State Environmental Protection Administration organized a large amount of environmental education activities. It organized journalists to report on key environmental events, assisted schools and education departments to promote environmental education, and held training workshops for school headmasters and teachers. Jointly with the Ministry of Education, it advocated "Green Schools". It also promoted "green communities", "green hotels", and "green offices", etc.

　　Beijing Municipality paid high attention to sustainable development education and information dissemination. The municipality's CCP Party School offers courses in environmental protection; and environmental protection is included in the syllabus of training sessions for government leaders. Environmental trainings were provided to the leaders of key enterprises on an irregular basis. It also devoted effort to disseminating information about environmental protection and sustainable development.

　　Tianjin Municipality based their environmental education efforts around the implementation of the Law on Environmental Impact Assessment of the People's Republic of China. Public environmental education columns were opened in some media for almost 3 months, and experts were invited to these columns to speak on the Law. This has achieved good effect.

　　Jilin Province increased publicity on its effort to build an ecological province. The relevant departments of the province compiled textbooks for primary & middle schools and colleges to promote public awareness of their efforts to build ecological province. They also compiled Public Education Textbook: Building Jilin into An Ecological Province. Jilin TV opened a column called "Window on Ecological Province Building", and filmed a public education series called "Ecolgocal Jilin".

　　Jiangxi Province effectively promoted the awareness of local governments to implement sustainable development strategy by building sustainable development experimental zones. The province also established green schools to promote the environmental awareness of students.

　　Guangdong Province utilized the media to give publicity to their key environmental protection activities. They organized environmental education campaigns and such activities as "South Guangdong Environmental Century Travel", "Environmental Protection Month", "Green Schools", and "Green Kindergartens", etc.

　　Chongqing Municipality utilized the World Environment Day to conduct major environmental education activities. They conducted trainings on sustainable development theories in party schools at various levels and administration colleges. They also organized "green school" activities in primary & middle schools and universities, as well as "green community" activities.

　　Guizhou Province held the first Training Workshop on Environmental Management for county and city mayors.

　　Shaanxi Province organized environmental education activities and dissemination of sustainable development knowledge and basic environmental science and laws. It encouraged civic activities to build green schools, green communities, and green enterprises. It also advocated green consumption and sustainable life patterns.

　　4) On role of China in the Global Community

　　The Ministry of Foreign Affairs (MFA) thinks that the Council's recommendations are valuable to them in their formulation of foreign policies. MFA will continue to assist various domestic institutions in their exchange with other countries so as to increase understanding, learn from the experience of other countries, expand cooperation channels, and provide favorable conditions for China to participate in international environmental cooperation.

　　Part 2: Responses to the Recommendations of the Task Forces

　　5) On Environmental Economics

　　The Ministry of Finance formulated a series of economic policies to prevent and control environmental pollution and ecological degradation. These policies include pollution fees, fees for dumping wastes into the ocean, water resource fees, mineral resource compensation fees, forest land compensation fees, tree planting fund, etc.

　　The Ministry of Science and Technology is planning to launch research on the methodologies and techniques of strategic environmental impact assessment, green accounting system for national economy, green barrier and trade, and environmental taxation and compensation, so as to provide scientific and technological support for environmental protection and social and economic development.

　　The Ministry of Railway holds on to environmental impact assessment, and the "3 Simultaneousness" management system in order to coordinate railway construction and environmental protection.

　　The State Environmental Protection Administration has recommended for a number of times that, based on the existing national income accounting system, a satellite account should be established for environmental resources as a complement to the current GDP accounting, and that natural and environmental resource depletion be quantified. SEPA organized research on the designing of China's environmental tax, and has completed Recommended Preliminary Policy Framework for Establishing Environmental Tax (Draft).

　　Beijing Municipality has been implementing an inter-departmental coordination meeting mechanism, a scientific examination system and an information disclosure policy for the planning of key economic policies and urban development. They stress the participation of experts and the public. They have started to carry out research on "Green GDP". They have strengthened research on environmental economic policy system, so as to streamline the pricing systems for water, gas and heating, improve the ecological conservation compensation mechanism and the ecological conservation investment mechanism, continue to implement clean energy utilization and comprehensive use of wastes.

　　Jilin Province carried out in-depth research on strategic environmental impact assessment. They held training workshops on environmental impact assessment, and attempted research on environmental and ecological assessment for major development plans.

　　Jiangxi Province requires all industrial parks to conduct environmental impact assessment, and check the environmental qualification of new enterprises before they can enter the parks. It requires that, during the construction of industrial parks, environmental impact assessment and the "3 Simultaneousness" requirement must be strictly fulfilled, and that construction projects must pass environmental protection requirements before they can be approved.

　　6) On Trade and Environment

　　The Ministry of Commerce (MOC) agreed with the policy recommendations by the Council on trade and environment but suggested some changes. It suggested that, after the sentence "The Government of China should require that… a strategic environmental assessment be performed on the impacts of China's accession to the WTO and… trade policy", the following words be added: "China should carry out trade impact assessment on the impacts of the changes of environmental policy as a result of its accession to the WTO, as well as the impacts of other important changes of environmental laws or policies. An effective mechanism should be established to coordinate China's foreign economic and trade policies and environmental policies, so as to make foreign trade and environmental protection support each other and contribute to China's sustainable development". MOC also suggested that the original recommendation "China must strengthen the capability of its negotiators to negotiate trade and environmental issues in order to play a more active role in the Doha Round" be changed to "China should actively participate in WTO negotiations on trade and environmental issues, and safeguard China's own interest", and further suggested that the following words be added after that sentence: "Given the fact that the WTO trade and environment negotiations were initiated by EU and other industrialized economies and had been listed into the new round of negotiations as a result of a package deal, these negotiations will not be advantageous to developing economies in general. They are very likely to lead to even more green trade barriers, which would serve as more obstacles to the exportation of products over which developing economies have comparative advantages. Therefore, China needs to actively participate in these negotiations, and safeguard its own interests and strengthen cooperation with other developing economies. At the same time, given the extensive scope and complexity of trade and environmental issues, various departments within China should increase exchange and coordination, and an expert supporting system should be established to assist in formulating China's negotiation positions and strategies to safeguard China's national interest."

　　The State Customs Administration will cooperate with other competent agencies to adopt relevant measures to find out potential green trade barriers at their early stages, and assist related sectors to adjust their policies.

　　The State Environmental Protection Administration set up a work team for WTO trade negotiations to conduct research on trade issues related to the UN Framework Convention on Climate Change, and their impact on China's export, to provide expertise support for China's participation in WTO environment and trade negotiation, and to carry out research on WTO and eco-labeling. SEPA has also been actively participating in the coordination meetings for the new round of WTO negotiations.

　　The State Forestry Administration, in response to the requirement by China's accession to the WTO, is planning to revise the Regulations on the Protection of New Plant Species of the People's Republic of China, and the Detailed Implementation Rules for the Regulations on the Protection of New Plant Species of the People's Republic of China. They will establish and improve certification and recognition mechanisms, and establish a system that is in line with WTO rules. They will compile guidelines and training textbooks for forest certification and recognition, and improve forest certification standard system.

　　Beijing Municipality increased relevant environmental standards to make them compatible with international ones through gradual economic structural adjustment, which provided motivation and support for the establishment of a sustainable consumption pattern and greater competitiveness of enterprises.

　　Guangdong Province organized research on WTO and environment, including pollution control, transformation of economic development patterns, improvement of legal framework, cleaner production, ISO14000, and environmental industries, etc. Such research increased their preparedness to meet new challenges.

　　7) On Forest and Grassland

　　The State Development and Reform Commission aims to promote the adjustment of forestry policies in cooperation with other departments. They have been implementing the Decisions on Speeding up Forestry Development by the CCP Central Committee and the State Council. They emphasized on key projects to optimize forestry structure, deepen institutional reform for forestry, increase policy support, stress the role of science and technology, and utilize and protect forest resources according to relevant laws. They adjusted and improved policies for the Slope Land Conversion Program (SLCP), and the Natural Forest Protection Program (NFPP. They contracted the China International Engineering Consulting Company to conduct mid-term assessments on the progress and problems on these two programs. The results of these assessments served as a basis for relevant policy adjustments by the SDRC and other relevant departments.

　　The Ministry of Finance established "Forest Cultivation Fund", "Forest Ecological Benefits Compensation Fund", and "Forest and Vegetation Restoration Fund" based on the Forest Law. They will continue to improve taxation system, and utilize taxation lever to promote environmental protection and ecological conservation. They don't agree to the Council's recommendation that "the logging ban should be lifted for collectively-owned forests where appropriate", and the Council recommendation "to rationalize taxes and improve identification of authority to tax within various sectors".

　　The State Environmental Protection Administration conducted research on the problems that arose out of SLCP, and reported the research results to the State Council to promote solution to these problems.

　　The State Forestry Administration organized assessment of the ecological, economic and social benefits of SLCP with a view to improving relevant policies and promoting the benefits of land conversion. SFA established a legal and policy guarantee system for the sustainable development of natural forests, and established a forest ecological benefit compensation system. It deepened reform on forest management, and implemented management rights. It improved the quota logging system, and implemented property disposal rights. It reformed irrational taxation policy, and implemented benefit rights. It also improved ecological compensation system, and implemented compensation rights. It conducted research on the value of forest landscape and property ownership, and implemented user rights for forest landscape.

　　The Law Office of the State Council formulated specific regulations on various aspects of SLCP, such as planning, tree planning, forest management and inspection, monetary and in-kind compensation, etc. It was responsible for examining the Natural Forest Protection Regulations submitted to the State Council by the relevant departments.

　　Beijing Municipality devoted major efforts to tree planting, concerting slope land back to forest/grassland, adjusting agricultural structure, promoting environmentally friendly tillage practices, and strengthening ecological restoration in mine areas. During the process of converting slope land to forest/grassland and the construction of green belts, they established a basic ecological compensation and ecological investment mechanism.

　　Jilin Province increased their efforts on ecological conservation. They organized research on the construction of ecological conservation zones and the protection of wetland resources. In the middle and eastern economic zones, they took effective measures to prevent resource development activities from degrading the ecological environment. In the eastern forest/ecological economic zones, they intensified management for Changbaishan National Nature Reserve to protect forestry resources and biodiversity.

　　Jiangxi Province increased their efforts to close mountains for forest cultivation, convert slope land back to forest, protect natural broadleaf forests, and reform artificial coniferous forests. It sped up the construction of the protective forest system in Boyang Lake area, Yangtze River area, and the western section of Pearl River area. All cropland with slopes of steeper than 25 degrees within the province will be converted back to forest/grassland. Cropland with slopes less than 25 degrees steep will be gradually transformed to terraced crop fields. During the land conversion program, the policy was such that "those who stop growing crops on slope land shall be responsible for planting trees, and those who are responsible for the forest management shall benefit from what they do".

　　Shaanxi Province aims to save and protect Qinling National Ecological Conservation Region during the 10th Five-Year Period. It will adopt coercive measures to protect the ecological environment of key resource development areas, and promote environmental protection in rural areas. It has devoted efforts to prevent and control pollution from livestock sources, and promote biomass energy use. It will devote major effort to development ecological agriculture, green products, and organic food. It will also carry out environmental baseline surveys using remote sensing technologies and mobile monitoring and assessment, with a view to providing technical support for the land conversion program.

　　8) On Eco-Security

　　The Ministry of Railway conducted more research on the migration routes of wild animals during the construction of Qinghai-Tibet Road. It utilized local grass species to conduct vegetation restoration experiments on how to prevent invasion by foreign species.

　　The State Quality Supervision Administration established and led the "National Committee for Assessment of Risks Posed by the Import and Export of Plants and Animals", whose members consist of the Ministry of Agriculture, the Ministry of Commerce, the Ministry of Foreign Affairs, and the Chinese Academy of Agricultural Sciences, etc. It drafted Comments on the Prevention of Invasion by Harmful Alien Species, which has been approved by the State Council and promulgated.

　　The State Environmental Protection Administration promulgated Circular on Strengthening the Prevention and Control the Invasion of Alien Species. It also promulgated China's first directory of invasive alien species. It is China's leading agency for the implementation of the Convention on Biological Diversity. It organized relevant Chinese institutions to participate in international negotiations for the Bio-Safety Protocol, the Guidelines for the Acquisition and Benefit Sharing of Genetic Resources, and the Guiding Principles of Preventing, Introducing, and Alleviating the Impacts of Invasive Alien Species. It formulated and implemented a number of national guiding reports, such as the Action Plan for Biodiversity Protection, the National Report of China on Biodiversity, and China's National Bio-Safety Framework. It also devoted great effort to in-situ and ex-situ biodiversity conservation.

　　The State Forestry Administration paid great attention to preventing the invasion of alien species in order to ensure China's bio-safety. They stressed the importance of effective management and technology for the purpose of preventing the invasion of alien species from the source.

　　The Law Office of the State Council promulgated the Management Regulations on the Bio-Safety of Genetically Modified Agricultural Products, which provided specific rules for research, experiment, production, processing, sales, and import/export of genetically modified agricultural products.

　　The Chinese Academy of Sciences started a number of major research projects, such as "the ecological impacts of the invasion of important alien species, and technologies for tackling these impacts", "the islanding of Bio-environment and their ecological impact", and "analysis of the survivability of rare and endangered land vertebrate animal species and their habitats".

　　Beijing Municipality formulated Comments on the Implementation of the National Guidelines for Ecological Conservation, which put forward short- and long-term objectives and tasks for ecological conservation. It has also started to formulate a municipality-wide ecological conservation plan.

　　Chongqing Municipality formulated the Ecological Function Zoning for Chongqing Municipality, and the Plan for Protecting the National Ecological Function Reserve in the Chongqing Section of the Three Gorges Reservoir Area, which designated key protected biodiversity areas. It strengthened supervision and management of nature reserves, organized a special research project on bio-safety, compiled a directory of invasive alien species, and strengthened supervision and management of invasive alien species.

　　Shaanxi Province conducted a survey of invasive alien species, which clarified the distribution of alien species within the province. Management measures were proposed based on that survey. It is formulating relevant countermeasures for controlling invasive alien species, including risk assessment, total social cost-based pricing, "users pay", and monitoring and pre-warning, etc.

　　Annex П

　　Report on Finances October 2003

　　Introduction

　　The Rules of Procedure make several references to funding including the following points:

　　1 The funding for the Council comes from contributions of the Chinese government and international donors.

　　2 The Council will set up a core funding mechanism to finance activities that are unable to obtain financial support.

　　3 The Secretariat and the Secretariat Canadian Office will administer core funding funds that enter their respective accounts according to their respective financial regulations and rules.

　　4 The core funding funds will be audited annually by a third independent auditing agency.

　　5 The Council will actively seek contributions from organizations who are interested in cooperation with the Council. The Council will also make specific arrangements to ensure systematic, continuous financial and other support necessary for carrying out the Council's activities.

　　The foregoing references to "core funding" were explained in the following excerpt from the Project Implementation Plan for CCICED Phase III agreed to by China and Canada and made available to other donors:

　　Two types of funding are described below: core financing and dedicated financing. For the purposes of this document, core financing is defined as funding which supports the Council's core operations: its Annual General Meeting, Task Forces, Lead Experts and Secretariat; core financing is not tied to any specific purpose. Dedicated financing is defined as being provided to the Council for a specific purpose, for instance the funding of a particular TF.… Untied core funding will ensure that the Council has sufficient funds with which to plan its activities, as well as to ensure Task Forces operations.

　　There is no annual assessment or burden-sharing formula applied to Members of the Council. All contributions are voluntary.

　　As in the past, income forecasts are reported on a calendar year basis. They are reported in American dollars because that is the unit of account for the Council, even though most contributions are made in a variety of other currencies.

　　Contributions

　　To date, the following pledges have been made to CCICED Phase III.

　　• Chinese contribution over the five-year period will amount to RMB 10.0 million in cash for core funding, plus the provision of staff, facilities and local costs estimated at RMB 22.0 million.

　　• Canadian CIDA contribution will be Cdn$ 8.0 million for core funding over five years

　　• Norwegian NORAD has pledged 10.0 million kroner for core funding over 5 years.

　　• Swedish SIDA has pledged 250 million USD for core funding over 5 years.

　　• The total German contribution for phase III amounts to 2.0 million EURO, over 5 years out of which an average of 19% will be provided as a financial contribution toward the costs of "core operations" such as annual meetings and other activities as soon as the related bilateral agreement is signed.

　　• In the case of Japan, GISPRI has pledged 19.9 million Japanese Yen to support the Task Force on Promotion of Circular Economy and Cleaner Production and the Ministry of Environment, Japan (MOEJ) has pledged 14 million Japanese Yen to the TF on Financial Mechanism for Environmental Protection. In addition, a contract for another 8.5 million Japanese Yen has not signed.

　　• The Netherlands Government pledged 600,000 Euro over 5 years, of which 190,000 Euro to support the TF on Enterprises Development and the Environment in 2003.

　　• Swiss SECO has pledged $992,000 during 2003 and 2004 to support the TF on WTO and Environment.

　　• British DFID has pledged $938,000 over 3 years to support the TF on Environmental and Natural Resource Pricing and Taxation.

　　• WWF has pledged approximately $400,000 to support the TF on Integrated River Basin Management

　　• Chinese Academy of Sciences (CAS) has promised RMB 1,800,000 (about $220,000) to support TF on Non-point Agriculture Pollution Prevention

　　• Asian Development Bank has offered $85,000 to support activities not yet specified

　　• Shell Foundation has offered $70,000 to the Secretariat.

　　Attached is a table entitled "CCICED 2003 Indicative Budget". It shows (by purpose and donor) the approximate value in US$ of all cash commitments that are expected during calendar year 2003. It also makes a distinction between core funding and dedicated funding. Page 2 gives details of China's in-kind contributions.

　　The financial support from all sources is of great importance to CCICED and much appreciated, as are the many in-kind contributions made, not only by China, but also by NGO's, institutions and many individual experts. These are too numerous to mention here but are acknowledged in the Task Force Reports.

　　Expenses

　　There are currently 9 Task Forces (TF) being financially supported by CCICED that are scheduled to report to the Council either this year or in subsequent years. They are listed on page 1 of the attached table. Very recently another three Task Forces (Agriculture and Rural Development TF, Transportation TF and TF on Protected Areas) were approved in principle and will probably start drawing down funds before the end of this year but not in time to be recorded in this report.

　　The following five TFs will report to the 2003 AGM: "Strategy and Mechanism Study for Promotion of Circular Economy and Cleaner Production"; "Development of Environmental Protection Industry"; "Financial Mechanism for Environmental Protection"; "Enterprises' Development and the Environment"; "Energy Strategies and Technologies".

　　The amount of future Task Force activity will be limited by two main considerations: time and money. At each Annual General Meeting during Phase III, it is planned that the Council will receive and discuss only 4-5 TF final reports. By dropping the requirement to hear many TF reports annually, the Council aims to optimize the time available for discussion of urgent issues. The other relevant factor in this Phase is the new rule that normally each TF will have no more than two years to complete its work program. In a few cases however, the Bureau may decide to extend the work period of a TF because it has proposed to do new work that would meet a priority need for China.

　　The other limitation will be the financial resources to support these Task Forces that are budgeted at approximately US$300,000 each annually. Even the latter figure is very tentative until we have more experience in operating short-term Task Forces and it may have to be adjusted from time to time.

　　Although several key donors have not made firm five-year commitments to Phase III, we are hoping that eventually CCICED should be able to support a five-year budget to finance approximately 45 years of Task Force activity.

　　Most other expenses are easier to estimate. The following annual costs which are forecast for this year should continue to be about the same in future years:

　　Council meetings (including travel costs) =$215,000

　　Headquarters Secretariat =$150,000

　　Canadian Secretariat =$200,000

　　Lead Experts =$170,000

　　Core and Dedicated funding CCICED 2003 Indicative Budget

CCICED 2003			*Core Funding (CF) Commitments					Dedicated Funding Commitments
Purpose/Donor	CF total		1 　　CIDA	2 　　NORAD	3 Sida	4 China	5 UK	6 GTZ	7 Neth	8 Japan	9 SECO	others	Total
Non-point pollution TF	311		150	51	99	11							311
River Basin TF	311		150	51	99	11							311
Environment & Natural Res. TF	77		33	11.22	21.78	11	312						389
Trade/WTO TF	11					11					450		461
Energy TF	311		150	51	99	11							311
Circ Econ &Cleaner Production TF	11					11				150			161
Financial Mechanisms TF	11					11				150			161
Enterprise Development TF	11					11			221				232
Environment Industry TF	11					11		200					211
TF sub-total	1065		483	164.22	318.78	99	312	200	221	300	450		2538
Council Meetings	215		152	16	32	15							215
Headquarters Secretariat	150		27	8	15	100							250
Lead Experts & Consultants	168		80	24	46	18							168
Canadian Secretariat	200		200										200
*core operations sub-total	733		459	48	93	133	0	0		0			733
*Core funding total	1798		942	212.22	411.78	232	0	0		0			1798
Core & Dedicated funding total	3281		942	212.22	411.78	232	312	200	221	300	450	0	3281
% share of each core donor			0.5239	0.1180	0.2290	0.1290
1) *CIDA pledged CDN$ 8.0M over 5 years (or 5.3M US$ @1.5) - all for core funding
2)  *NORAD pledged $1.3m core funding over 5 yrs (with 85% for TFs)
3) *Sida pledged $1.1m core funding for 2003 and 2004 and pledged 2.5 m core funding 5 yrs (with 85% for TFs)
4) China pledged core funding of RMB 10M in cash and RMB 22M in-kind over 5 years (see page  2 for breakdown of in kind support)
5] British DFID pledged UK£ 630k over 3 yrs for  TF on TF on Environmental and Natural Resource Pricing and Taxation
6) German GTZ pledged 2.0 M Euro (US$2.34M) over 5 years. An average of 19% will go to "core operations" when bilateral agreement is signed.
7) Netherlands Embassy's indicative budget for CCICED is 200K EUR for 2003; 180K EUR for 2004; 162K EUR for 2005
8) Japan: GISPRI pledged 19.9 M Yen to TF on Circ. Econ. & Clean Prodn; MOEJ has pledged 14 million Japanese Yen to the TF on Financial Mechanism for Environmental Protection.
9) Swiss SECO pledged $992k over 2003 & 2004 for WTO TF.
"others" include WWF=400, CAS=220; Shell=70, ADB=85 but it is too early to predict their specific annual commitments
*Core Donors (CD) pledged the following amounts for Phase III covering years 2002-2006: CIDA5.3 m + NORAD 1.3 m + Sida 2.5 m + China 1.2 m ＝ 10.3 m.　Of that amount, only $.158 m of CIDA funds was used in year 2002. The remainder of 2002 budget was financed from unused Phase II funds. Thus the CD total funds available for the remaining 4 years = US$ 10.15 m or circa 0.25375 m annually.

　　Breakdown of In-kind Support from Chinese Side

　　for CCICED Phase III (on an annual basis)

　　RMB Yuan

Secretariat	750,000	including salary and insurance for Secretary- General and operational costs for his office; rental for the office for the Secretariat, expenditure for water, electricity, daily communication, transportation, office facilities and other supporting logistic back ups
9 Task Forces	3,150,000	including office rental, office facilities, water and electricity, daily communication, transportation, cost for supporting research fellows and logistic back ups
Lead Expert and assistants	200,000	including office and meeting rental, water and electricity, daily communication, transportation, depreciation of office facilities and logistic back ups
Preparation for AGM	350,000	including the personnel input from parties related
Supporting cost for the Secretariat, TFs and Lead Expert and his assistants from local governments, enterprises, research institutes, universities and colleges for the following activities: side visits, investigations, meetings, demonstration projects and etc	800,000
Total	5,300,000