Pacific Islands Economies: Trade Patterns and Some Observations on Trade Policy Issues
South Pacific Regional Environment Programme (SPREP)
Trade, environment and development in the Pacific Islands: the
role of SPREP
Vili Fuavao, Director
PO Box 240
tel (685) 21929 fax (685) 20231
Regional cooperation between Pacific island countries has a well established record. Indeed, regional governance of their shared resources and the number of agreements covering environment and sustainable development in the region are steadily increasing. Successful cooperation on environment and development issues that could be extended to specifically to trade and environment. The issue of trade and environment is a highly complex one, which has only recently started to attract international and national attention. The fragility of environment and vulnerability of small economies in the South Pacific make the issue of trade and environment even more complex indeed. Making the transition to more liberalised trade and to more sustainable development will not be easy for island countries. The particular characteristics of island countries in the Pacific,in particular, those relating to property rights, the size and perhaps resilience of their economies and environments as well as the often large subsistence sectors of those economies, constrain their options. Options for eco-labelling, in addition to a range of sectoral initiatives, dealing with wastes, forests and the conservation of biological diversity, provide a useful focus for regional cooperation and the activities of SPREP.
As a region we can be characterised as islands and groups of islands sharing a common thread of evolutionary and human history. Mostly isolated from one another by hundreds if not thousands of kilometres, our island people have developed unique cultures and attitudes of self-reliance. Many of us occupy some of the smallest habitable land areas on earth and we are vulnerable to natural and human-induced distrubance of both local and global environments. We are also bound by our extreme dependence on climate, physical characteristics and biological resources of sea and land.
We Pacific Islanders share a common aspiration for economic development and improved living standards for our people. For thousands of years we have lived a relatively sustainable way of life in our island environments at a fairly low level of material well-being -- a level which we no longer consider adequate. We are strongly committed to maintaining the harmony which has characterised Pacific island peoples' relationship with their environment; we do not want the pursuit of material benefits to undermine our cultural systems and values nor to cause any permanent harm to the land and marine resources which have allowed us to sustain island life for many centuries. Therein lies our dilemma.
As on all islands the environmental consequences of ill-conceived development can have catastrophic effects. The recent human history of our region contains example of entire islands rendered uninhabitable through environmental destruction by human beings. Unsustainable development threatens not only the livelihood of island people but also the islands themselves and the cultures they nurture.
These considerations naturally draw us together to seek action on global environmental issues which threaten the countries in our region. Climatic disruption and potential sea level rise are issues of grave concern. Similarly our reliance on the region's biological resources is threatened by the patterns of large-scale exploitation of marine and terrestrial living resources; concern to avoid the catastrophic effects of climate change and to conserve our wealth of species and ecosystems underlies our interest in negotiations towards global conventions on climate change and the protection of biological diversity.
Though scattered, the island countries of the South Pacific are a close-knit family. Our co-operative approach to regional development is merely an extension of home-grown processes of government which have traditionally placed very high value on co-operative and the consensus approach to problem resolution.
One of the important early points to make is that we are dealing in this workshop with a scarce resource - I am referring here to information about trade and environment linkages in Asia-Pacific. It has been pointed out that few conceptual or empirical studies have been undertaken in this region (Zarsky 1994). This is particularly true for the Pacific islands. Fortunately, information is a resource that if well cultivated can grow very rapidly. This workshop I am sure is providing the right fertile conditions.
It will not be possible in this paper to fill the empirical void. Instead this paper examines what we know of trade and environment interactions in Pacific island countries and looks at the role of regional organisations such as SPREP in promoting ecologically sound trade. In doing so the focus is on exploring the way ahead - what can be done to deal with significant trade and environment issues in the region and, in particular, what innovative approaches might promote ecologically sound trade.
To consider the role of SPREP as a promoter of ecologically sound trade, we must first understand the policy and inter-governmental framework for regional cooperation that exists in the Pacific. Unlike many other sub-regions throughout Asia-Pacific, it has a well established record of intergovernmental cooperation and a number of well established intergovernmental organisations through which regional agreements can and have been forged.
To provide a focus for future activities in relation to trade and environment in the Pacific an overview of environmental impacts related to current trade patterns in Pacific island countries is briefly presented.
Before investing in regional organisations as a means of steering trade patterns towards ecologically sustainable development it is first necessary to look at what success there has been with inter-governmental cooperation on environment and sustainable development issues. Here the paper will look briefly at the region's experience with the United Nations Conference on Environment and Sustainable Development (UNCED), as well as the Global Conference on the Sustainable Development of Small Island Developing States (Barbados Conference). We must also consider the starting platform for regional cooperation. This paper will therefore examine what trade and environment issues are currently involving SPREP before suggesting some plausible next steps.
Policy and intergovernmental framework
As mentioned earlier, to consider the role of SPREP as a promoter of ecologically sound trade, we must first examine the policy and inter-governmental framework for regional cooperation that exists in the Pacific. This framework provides an umbrella within which regional cooperation on trade and environment can take place. A number of relevant international agreements have been struck at UNCED and the Barbados Conference and through APEC. It is not intended to review these in depth but rather provide an understanding of their implications for trade and environment in this region. They also raise a number of broad issues that will need to be considered by this region.
UNCED's Agenda 21 set out that trade and environment should be mutually supportive1. The assumptions made during UNCED are that more free trade will promote growth, generate additional income for environmental protection, that will in turn underpin more "sustainable" growth. The recent report by the GATT Secretariat to the UN Commission on Sustainable Development indicates that these assumptions still underpin the activities of the General Agreement on Tariffs and Trade (GATT).
Following a similar line, APEC Environment Ministers recently agreed to promote trade "through a vision for APEC that encourages members to integrate environmental considerations into their policy making..." and adopted the principle that "member economies should support multilateral efforts to make trade and environment policies mutually supportive, consistent with...the Rio Declaration." (APEC 1994)
APEC therefore has the potential to be a dynamic mechanism for both trade and environment enhancements as agreed at UNCED. However the APEC region has been likened to a "doughnut" with the South Pacific region representing the hole in the middle. As most countries in the South Pacific are not members of APEC thus may have profound impacts on the environment of the South Pacific region.
Of direct relevance to Pacific island countries the Barbados Conference, in its Action Programme for the Sustainable Development of Small Island Developing States, recognised that island countries were significantly disadvantaged by a narrow range of resources, which forces undue specialization; excessive dependence on international trade and hence vulnerability to global developments (UN 1994).
In response to this, specific actions at the national and international levels called for small island developing states to diversify production and exploit their comparative advantages consistent with mutually supportive environment and development policies. It was agreed that assistance from the international community was necessary for efforts to diversify and that special consideration to the local value added criteria applicable to the exports of SIDS.
In this international forum it was not possible for Pacific island countries to improve the terms of SPARTECA, however, their calls for greater concessions under the rules governing country of origin received a positive response from NZ in the recent Forum2.
In fact the South Pacific Forum regularly provides guidance on regional trade initiatives. It has strongly enclosed trade liberalisation and at the recent 25th Forum, 31 July - 2 August it was agreed that Trade Ministers would meet to consider free trade arrangements within the region and means to promote the region's products and services (Forum Secretariat 1994). The Forum Secretariat therefore takes a leading role in trade across the region and is currently an observer organisation to APEC.
Other regional organisations involved in trade issues that would be integral to any regional cooperation on trade and environment include the South Pacific Commission (SPC) -economic, rural development and agriculture; the Forum Fisheries Agency (FFA) - management of fisheries and fishing access rights; the Tourism Council for the South Pacific (TCSP); and, the Pacific Islands Development Program (PIDP).
It is important to consider how this framework relates to the "trading future" for Pacific island countries. On the one hand it has been suggested that the "full export potential of these economies...has not been fully utilised" and that there is a strong likelihood that this potential will be realised in the near future (Montes and Finn 1993). On the other, the recent completion of the Uruguay Round of the GATT may be costly in terms of the balance of trade for island countries through the reduced access to markets on preferential terms (Forum Secretariat 1994a).
Montes and Finn (1994) also point out that if the trading potential of island countries is realised through the "standard approaches", including structural adjustment and free trade that promotes the rapid extraction of natural resources, then it is likely to speed up environmental degradation and corrode older forms of social organisation in island countries. Indeed, the assumptions made concerning trade liberalisation referred to earlier do not acknowledge that unregulated trade based on unsustainable patterns of production and consumption will continue to degrade the environment.
The debate will continue over whether trade liberalisation will have positive or negative effects on the environment and similarly whether the environment should be used as a technical barrier to trade. But what we must be continually aware of as we look to develop approaches to deal with trade-environment conflicts in the Pacific are the particular characteristics of island countries, in particular, those relating to property rights, the size and perhaps resilience of their economies and environments as well as the often large subsistence sectors of those economies (Fairbairn and Tisdell 1994).
For example, in any transition, whether it be to incorporate the full social and environmental costs into development process (e.g. polluter pays principle) or to develop new export opportunities as preferential access for established products diminish, island countries will have considerable difficulties. The size of their economies alone, the availablility of capital for investments of this kind, will likely mean that the transition is not smooth and that it will be accompanied by significant social and environmental costs.
Trade related impacts on the environment
The following section presents an overview of environmental impacts related to current trade patterns in Pacific island countries. This identifies some of the obvious links between trade and environment but also a number of initiatives that are already underway to deal with certain issues.
The trade in wastes, in particular, toxic and hazardous wastes has been an ongoing concern to the Pacific region. This concern was well recognised at the Barbados Conference. The isolation and oceanic location of small island developing States and their dependence on a marine and limited terrestrial resource base make them highly vulnerable to contamination by toxic and hazardous wastes and chemicals, and radioactive materials. (Programme of Action, para. 23 )
On this issue, Pacific island countries of the South Pacific Forum are currently negotiating a Convention on the Prohibition of the Import into the South Pacific and the Control of Transboundary Movement and Management of Hazardous Wastes within the South Pacific Region. This Convention expected to be ready for signing at the 1995 Forum will complement the Basel Convention and further strengthen regional environmental governance which is emerging (Carew-Reid 1989, Cicin-Bain & Knecht 1989; Pearsall 1990, Miles 1993). It has been agreed by the South Pacific Forum that SPREP will be the Secretariat for this Convention.
It was also recognised in Barbados that: Given that long-term disposal options are limited and will constrain sustainable development, small island developing States will need to look for ways of minimizing wastes and/or converting wastes, such as sewage, into a resource (e.g. fertilizer for agriculture). This will include action ranging from limiting imports of non-biodegradable and hazardous substances to changing community attitudes to the disposal and use of sewage. In the short term, existing wastes require effective disposal, but at the same time incentives to continue waste generation should be avoided (Programme of Action, para. 24)
This led to an agreement that the international community should:
Accept the right of small island developing States to regulate, restrict and/or ban the importation of products containing non-biodegradable and/or hazardous substances and to prohibit the transboundary movement of hazardous and radioactive wastes and materials within their jurisdiction, consistent with international law (Programme of Action, para. 24 C(iii))
There are few Parties to the Vienna Convention and Montreal Protocol in the Pacific region. Although a period of grace has been provided for developing countries that are yet to become parties to the Convention, this is one international environment agreement that will have a significant trade impact on this region when exports of CFCs are curtailed and existing technology becomes outdated/obsolete.
There two important trade-related aspects to the conservation of biological diversity in this region. The first is that international trade in endangered species exacerbates already high rates of extinction in the region. Secondly the trade in intellectual property obtained from the biological resources in this region is currently occurring without adequate safeguards for the custodians of these resources.
Concerning trade in endangered species, again few Pacific island governments (only PNG and Vanuatu) have been able to become parties to the Convention on International Trade in Endangered Species (CITES). This was recognised by the 25th South Pacific Forum which condemned the international trade in endangered species and recommended that the remaining Forum island countries consider acceding to the CITES.
Debate concerning trade and protection of intellectual property was extremely difficult to resolve during the Barbados Conference. It was ultimately agreed that at a national level States would: Ensure that the ownership of intellectual property rights is adequately and effectively protected. Ensure, subject to national legislation and policies, that technology, knowledge and customary and traditional practices of local and indigenous people including resource owners and custodians, are adequately and effectively protected and that they thereby benefit directly on an equitable basis and on mutually agreed terms, from any utilisation of such technologies knowledge and practices or from any technological development directly derived there from. (Programme of Action, para. 45 A (vii))
At a regional level this required the development of legal mechanisms for the protection of intellectual property rights.
International trade in raw timber continues to have a profound affect in this region, particularly in Melanesia. The rates of extraction of forest resources is very high in a number of these countries and is generally recognised as unsustainable. The environmental impact of these logging activities amongst other things significantly reduces biological diversity through habitat destruction. In response the 25th South Pacific Forum agreed to develop a common code of conduct governing logging of indigenous forest to which companies operating in their countries will have to adhere and to increase the monitoring of logging and exports of timber.
The unsustainable exploitation of stocks is not such a problem in the fisheries sector, but the Forum agreed that in principle the issues were much the same as in the forestry sector, in particular in ensuring a fair return to the owners of the resource (currently the average in less than 4% of catch value) and in monitoring (surveillance) to ensure that fishing nations comply with terms of access. (Blackstock 1994)
Income from fisheries exports is extremely valuable to the region - trade in both fish and fishing access rights for distant water fishing nations. The FFA has played a significant role in promoting the sound management of fisheries resources and particularly in the negotiation of regional and bilateral agreements covering fishing access rights. As a result the region's governments have agreed to strengthen multilateral approaches to the sustainable exploitation of fish stocks in the region. The active participation of the region in the fight against the driftnet fishing is thereby understood.
Agricultural exports are important to a number of countries in the region. The current environmental impacts associated with these crops are difficult to quantify but include soil erosion, habitat destruction, and the contamination of fresh and lagoon waters by pesticides and fertiliser used to increase yields. More sustainable practices are being developed and promoted, in particular by the SPC, but incentives are often required to encourage transition from one approach or crop to another.
A growing concern mentioned earlier is the potential environmental and social costs of reorienting production to new crops if existing crops become economically non-viable as preferential access to certain markets diminishes. The environmental impacts would obviously be dependent upon the crops and ecosystems involved. Some initial assessments may be beneficial and assist the decision-making process during transition to new markets and crops.
Promoting ecologically sound trade through SPREP
So, moving from a discussion of issues to the institutional arrangements currently in place, this section briefly provides a description and history of SPREP as well as looking at what success there has been with inter-governmental cooperation on environment and sustainable development issues (i.e. UNCED and the Barbados Conference). A brief description of the current work programme provides a basic starting platform for regional cooperation through SPREP before the final section discusses future options.
What is SPREP?
The South Pacific Regional Environment Programme - SPREP - is the intergovernmental organisation responsible for environmental matters in the South Pacific region. SPREP was established to promote regional cooperation in environmental matters, to assist its members to protect and improve their shared environment and to help them work towards sustainable development for present and future generations. Its members are the governments or administrations of American Samoa, Australia, Cook Islands, Federated States of Micronesia, Fiji, France, French Polynesia, Guam, Kiribati, Marshall Islands, Nauru, New Caledonia, New Zealand, Niue, Northern Mariana Islands, Palau, Papua New Guinea, Pitcairn, Solomon Islands, Tokelau, Tonga, Tuvalu, United States, Vanuatu, Wallis and Futuna and Western Samoa.
A short history
Following the appointment in 1973 of an ecologist to the staff of the South Pacific Commission (SPC), consultations between SPC, the United Nations Environment Programme(UNEP), the South Pacific Bureau for Economic Co-operation (now the Forum Secretariat)and the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)resulted in agreement in 1978 on the need for a comprehensive environmental management programme for the region. Proposals submitted to the South Pacific Forum (the annual meeting of Heads of Government of Pacific countries) and the South Pacific Conference (the annual gathering of representatives of all the region's states and territories) resulted in 1980 in the formal establishment of SPREP as a joint initiative of the two regional organisations with funding from the two UN agencies. SPREP was required to report to both the South Pacific Forum and the South Pacific Conference, with a coordinating group of representatives from the four founding organisations, chaired by the Forum Secretariat, providing executive oversight. The new programme was administered from SPC's headquarters in Noumea, NewCaledonia.
A Conference on the Human Environment in the South Pacific, in Rarotonga, Cook Islands, in 1982, decided to set up SPREP as a separate entity within the SPC and produced an "Action Plan for Managing the Natural Resources and Environment of the South Pacific Region" ("the Action Plan") to guide its future activities. This document, revised in 1991, \remains the principle focus of SPREP's activities.
After considering Action Plan, financial and legal implications, the 1991 SPREP Meeting - held at Ministerial level - agreed that SPREP should become autonomous. Ministers also accepted an offer by the Government of Western Samoa to host the new organisation and SPREP moved its headquarters from Noumea to Apia in 1992.
Negotiations on the terms of an agreement to give legal effect to SPREP as an intergovernmental, regional organisation resulted in the Agreement Establishing SPREP being signed on 16 June 1993. The Agreement will enter into force thirty days after the tenth ratification is received by the depository, the Government of Western Samoa. At the time of publication (May 1994), Western Samoa, Fiji, New Zealand and Nauru had ratified.
SPREP's mission, derived from The Agreement Establishing SPREP, is: to protect and improve the environment of the South Pacific and to ensure sustainable development for present and future generations through the provision of financial and technical assistance and the promotion of regional cooperation.
The Action Plan, 1991-95, sets out the objectives and guidelines for SPREP and provides the framework for a regional approach to addressing environment and sustainable development issues of the South Pacific. Particular objectives relevant to promoting environmentally sound trade include: provide integrated legal, planning and management mechanisms at the national and regional levels to ensure the protection and ecologically sustainable utilisation of natural resources; encourage development undertaken in the region to be directed towards maintaining or enhancing environmental quality; protect terrestrial and marine ecosystems and species which require special attention; reduce, through prevention and management, atmospheric, land based, marine and freshwater pollution in the region; avoid or mitigate the adverse impact of human activities on the ecosystems of the region, through means such as Environmental Impact Assessment.
Successful regional cooperation on environment issues
The Pacific was well represented at the Earth Summit, held in Rio de Janeiro, June 1992, over one hundred delegates including nine heads of government, and the preceding 18 months of preparations involved a considerable commitment and investment by the region and its partners in sustainable development (Miles 1992). Pacific island countries have chosen to continue their involvement in international negotiations on environmental issues. Their participation in these negotiations not only brings island issues to the attention of the international community, it also involves the Pacific region in certain obligations and responsibilities concerning the management of their environment and utilisation of resources.
There are a considerable number of international negotiations related to sustainable development. Of these, the Pacific region has become closely involved in negotiations for the Barbados Conference and the Conference on High Seas Marine Resources.
The Barbados Conference can be used to demonstrate how the Pacific, through its involvement in international negotiations, can influence the approach taken by the international community to sustainable development. Held between 25 April and 6 May 1994, the Barbados Conference was one of the most important international negotiations for Pacific island countries. It provided an opportunity state clearly, in the wake of the Earth Summit, how the new global framework for sustainable development can be put into action in islands. It is one of the few specific activities agreed to by the UN as necessary to follow-up the UNCED outcomes and it is clear recognition of the needs of small islands and the active role they are playing in international environmental negotiations.
The major achievement of the Conference was agreement to a comprehensive Programme of Action for the Sustainable Development of SIDS. The Programme of Action builds upon Agenda 21 and is significant for islands as they are dealt with as a whole and not just "coral reefs and beaches." This Programme provides a blueprint for enhancing regional and sub-regional cooperation on each of the fourteen subject areas.
The Programme of Action provides the final piece to the policy framework at the international level concerning sustainable development and islands. It is an essential agreement for continued international support and the effective implementation of national and regional priorities. It complements regional agreements and has been built upon the priorities identified in the National Environmental Management Strategies of Pacific island countries and of islands in other regions. It is a welcome recognition that islands are faced with the full range of constraints to sustainable development and many constraints which are unique to the smallness and isolation of islands.
Current work programme
The SPREP work programme is broken up into seven priority areas:
- conservation of biological diversity - global change - environmental management and planning - coastal management and planning - prevention and management of pollution/planning and response to pollution emergencies - environmental education and information - regional environmental concerns
Activities within SPREP have focused on the trade related aspects of certain elements of the work programme, in particular, conserving biodiversity, pollution prevention and regional environmental concerns. Under the conservation of biological resources, SPREP continues to provide technical and legal advice to countries concerning CITES, either to assist Parties to the Convention or those considering accession. Concerning pollution prevention, SPREP has recently completed a regional programme or framework for waste management and pollution prevention in the region which includes the promotion of regional recycling programmes and the development of local packaging solutions that may substitute for non-biodegradable imports.
Initial discussions have been held with the UN Conference on Trade and Development (UNCTAD) with a view to examining the environmental implications of trade liberalisation for particular sectors of Pacific economies (e.g. sugar in Fiji). This would be done in consultation with the Forum Secretariat and SPC.
Cooperation between regional organisations
Trade and sustainable development will also require organisations with often narrow sectoral mandates to coordinate their activities and collaborate actively on projects. Since the Earth Summit collaboration between regional organisations in the Pacific has increased.
At one level coordination between regional organisations is advanced through their participation in the sectoral meetings convened by each other. For example, SPREP has participated in a number of regional meetings to ensure the implications of Agenda 21 are taken into account within particular sectors such as energy3, development planning4 and forestry5. However, this needs to be supported by much closer collaboration on specific projects.
Examples of this collaboration are starting to occur on specific technical issues which cut across the mandates of regional organisations. Staff of regional organisations have met recently under the auspices of the South Pacific Organisations Coordinating Committee (SPOCC) to harmonise their efforts in preparation for the ICPD and in relation to coastal and marine resources. Trade is another area where this will be beneficial.
In the discussion presented so far it has been pointed out that Pacific islands, in response to regional and international agreements supporting trade liberalisation, need to diversify their production and exploit what comparative advantages they have. This must be done in ways that ensure trade and environment support one another. They may also be forced to reorient their production as preferential access to certain markets diminishes.
While they may have some capacity to expand their trade, some careful choices will need to be made to avoid rapid depletion of resources for the purposes of trade. Rapid transition to liberalised trade based on the assumptions which currently underpin GATT, referred to earlier, may be particularly inappropriate for small islands with such a small and often narrow resource bases - i.e. the income generated from trade for environmental purposes may not be able to underpin more "sustainable" development as, in the worst case, there may be little left to protect or rehabilitate.
At the same time, Pacific island countries are faced another transition - the transition to sustainable development involving the full integration of environmental considerations into the development process. This too requires considerable effort and is a one of the primary elements of SPREP's work programme. From experience incentives to reorient patterns of production and consumption towards more sustainable ones are often required.
As mentioned earlier, there are a number of activities underway that deal with the trade aspects of certain environmental issues of concern to the region - waste trade and forestry are two good examples. These will need to continue, supported by sectoral studies which examine the environmental implications of trade liberalisation. But regional cooperation may be particularly valuable where it is used to assist the regions transition to both sustainable development and free trade. To this end a regional "eco-labelling" initiative may offer some real advantages to the Pacific.
Pacific island countries may find that the comparative advantage most valuable to them relates to environmental quality. Although the region clearly has a number of environmental concerns (SPREP 1992), it is comparatively "clean and green" - or "clean and blue" if the focus is on ocean products.
The marketing opportunities would need to be carefully examined and the significant investment in implementing and monitoring such a scheme to ensure its integrity should not be under-estimated. But such markets do exist and are often of a higher value. From an environmental point of view it would assist the transition to more sustainable practices if a known markets for the more environmentally friendly products were clearly identified. It is much easier to convince a producer to adopt environmentally sound practices if they can see how to get a return on their investment.
How might this be achieved through regional cooperation? Well, the institutional structures exist already in the Pacific, although cooperation between the relevant institutions and organisations would need to be promoted. The Pacific island countries have been successful in reaching regional agreements and influencing international negotiations. This could be extended to trade and environment issues and the development of a regional eco-labelling initiative.
A Pacific Green Label would need to involve governments, key regional organisations (depending on the sectors/products involved) and relevant non-government organisations e.g. Chambers of Commerce. For its part, SPREP has an clear mandate to promote coordination of this kind for the protection of the environment and sustainable development of the region. It also has an established work programme to assist countries deal with a range of trade-environment concerns and will be conducting a preliminary assessment ecolabelling options in 1994/95.
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1. See Agenda 21 Chapter 2 - International cooperation to accelerate sustainable development in developing countries and related domestic policies
2. NZ agreed to reduce the Rule of Origin requirements from 50-45% for garment imports under SPARTECA
3. Regional Energy Committee Meeting convened by the Forum Secretariat, Fiji 1992
4. Fourth Regional Development Planners Meeting convened by the Forum Secretariat and SPC, New Caledonia 19925. Heads of Forestry Meeting convened by UNDP, Fiji 1993
5. Heads of Forestry Meeting convened by UNDP, Fiji 1993