Select Committee on Environmental Audit First Report



79. Environmental concerns have prompted many other countries to develop over the last decade sustainable development strategies and an environmental infrastructure. This process has to a large extent been driven by commitments made at the Rio 'Earth Summit' of 1992. This was a peak of environmental awareness and concern and a large number of environmental agreements were signed (including the Framework Convention on Climate Change) and commitments to sustainable development were made (expressed in Agenda 21 and including the implementation of national sustainable development strategies).

80. We were interested in the extent to which other countries had put in place national sustainable development, or environmental, plans; mechanisms for cross-governmental implementation; and parliamentary, and/or other, mechanisms for scrutinising and auditing progress. The existence of institutions or government processes concerned with environmental integration and/or sustainable development is not necessarily evidence of effective or successful environmental policies, nor of a more or less sustainable pattern of development. However, we believe there are lessons to be learned from those efforts being made in other countries towards these goals.

81. The UN Commission for Sustainable Development (UNCSD) is the international focal point for information and best practice on sustainable development in different countries. The Commission is currently updating its information on national efforts to implement sustainable development in preparation for presenting a substantial report to 'Rio +10' in 2002.[115]

82. From the data last gathered in 1997 it is quite clear that many countries are concentrating on the development and/or implementation of a national sustainable development strategy or environmental plan with few supplying information on arrangements for the reporting and auditing of actual progress against that plan.[116] In their efforts many countries appear to be now in the midst of reforming, or reanimating, sustainable development processes and institutions set up originally after 1992 and now in need of revitalisation. Sometimes, as here in the UK, this has been associated with a change of government.[117] What follows should be regarded as work in progress which we will continue to pursue over time.

83. The International Organisation of Supreme Audit Institutions (INTOSAI), which has a longstanding interest in environmental issues,[118] does provide a picture of developments in the formal environmental audit of government (see below).

84. Special arrangements for implementing sustainable development strategies across the world can be characterised as follows:

    —  inter-ministerial grouping: the most common institution often chaired by either the Prime Minister or the Environment Minister (in the UK we have the Cabinet Committee 'ENV' chaired by the Deputy Prime Minister and the Green Ministers Committee chaired by the Environment Minister);

    —  multi-sectoral grouping: another common body involving typically representatives from government (ministers or senior officials), devolved/local government, NGOs, business and industry, academics & experts (for example in the United States The President's Council for Sustainable Development, and in the UK, the Round Table for Sustainable Development);

    —  statutory requirements: top-down requirements across the public sector for a range of administrative actions such as strategic, or other, environmental appraisal of policy, the provision of access to environmental data and/or new environmental reporting requirements (for example the draft EC Strategic Environmental Assessment (SEA) directive; in the US the National Environmental Policy Act; in California, the Californian Environmental Quality Act; and, in Ontario, the Environmental Bill of Rights);

    —  environmental commissioner/ombudsman: often related to statutory requirements is the establishment of an officer to police the system (facilitate the public's access to environmental information and/or investigate and mediate complaints of poor, negligent or unlawful environmental performance or activity by public bodies (for instance the New Zealand Environmental Commissioner; and the Environmental Commissioner for Ontario)

    —  environmental auditor: expanding or focusing the remit of the national audit institution specifically to address issues of environment and sustainable development (for instance the Canadian Commissioner of the Environment and Sustainable Development, within the federal Office of the Auditor General.)

    —  specific parliamentary arrangements for scrutiny of progress (ad hoc committees have sat previously in Germany (an Enquete Commission of Members and experts) and the UK (House of Lords); currently in Ireland the Dail and Seanad Joint Committee on Environment and Local Government has a sub-Committee on sustainable development, in the Canadian House of Commons, the Committee on the Environment and Sustainable Development receives reports form the Commissioner mentioned above—and of course there is the EAC here in the UK).

International examples

85. We have looked across the piece and also at the United States, Germany, New Zealand, Australia (particularly selected provinces) and Canada. The Commonwealth connection makes the Australian, New Zealand and Canadian examples perhaps the most relevant in terms of parliamentary systems that most closely resemble arrangements in the UK.

The European Union

86. We have referred to our previous work in assessing the progress of the European Union's efforts to integrate environmental policy considerations into other policy areas: EU policy and the environment: an agenda for the Helsinki Summit.[119] The main development since that report has been the agreement between Member States and the Commission to develop a fair panoply of strategies: continuing to establish as well as develop and 'deepen' the sectoral strategies of the Council of Ministers; developing a 6th Environmental Action Programme; and establishing a pan-EU sustainable development strategy. As we concluded last year, the trick will be not only developing, but also coordinating, these strategies.

The United States

87. In 1969-70 a number of reforms at a federal level were put in place to address environmental degradation in the US. The world's first statutory environmental impact assessment regime was introduced—the National Environmental Policy Act (NEPA). Under this regime federal agencies are required to incorporate environmental considerations into their proposals for legislation and other major actions. The Environmental Protection Agency (EPA) was also created to regulate pollution to air, water and other environmental media and plays a role in the NEPA process. The Council on Environmental Quality was established to advise the President on the progress of the system.

88. In 1992 the President's Council on Sustainable Development was established to help implement Agenda 21 and develop and recommend to the President a national sustainable development action strategy that will foster economic vitality. It consists of 25 members drawn from industry, government and NGOs. It produced a major report in May 1999 Towards a Sustainable America which is now 'with the President for consideration' but no further progress can realistically be expected until after the November 2000 presidential election has come to a final conclusion.

89. A significant test of the US's green credentials has been the 6th Conference of the Parties to the Kyoto Protocol to the UN Framework Climate Change Convention (UNFCCC COP6). The implications of the unsuccessful negotiations in The Hague in late November 2000 were still taking shape as this report was being finalised. What was clear was that the United States had not been in the vanguard of the effort to address the emission of greenhouse gases by reducing domestic consumption of energy. The President's Council on Sustainable Development, however, has recognised the increasing emissions likely to be coming from the developing world but concluded also that "industrialised nations must show leadership to demonstrate the feasibility and benefits of a different development path".[120]

90. The Council (and Office) on Environmental Quality makes recommendations to the President on the environmental impacts of federal agencies and produces annual assessments of the level of integration of environmental concerns in economic and sectoral decisions. The General Accounting Office (national audit body) also has a relevant, though not specific, remit but states in its annual report that the environment is "a major theme" in its work. The Congressional Resources Committee is responsible for CEQ funding and for instance reported last year on the implementation of National Environmental Protection Act. The Committee criticised it severely for shortcomings such as "the huge proliferation of paperwork", "sham public participation" and "waste of taxpayers' money".[121]

91. While the US has implemented a wide range of initiatives and legislation addressing various environmental issues, the latest OECD environmental performance review (1996) concluded that the US focus was still on individual issues and remedying environmental deterioration rather than on addressing the underlying causes of environmental problems such as urban sprawl, energy use and consumption patterns.


92. Germany has no sustainable development strategy as yet. The coalition Government is however committed to producing one as of 1998. The Government has agreed on some of the processes and institutions which need to be introduced (see below).

93. To implement an eventual strategy an independent Parliamentary Commission recommended there to be an inter-departmental steering group formed from administrative heads of departments, chaired by the head of the Federal Chancellery. Germany likens this body to the UK's "Green Ministers".[122] However the function of the German body will be focused on the first job in hand—the development of a national sustainable development strategy. The Chancellery is likely to co­ordinate work on the strategy, possibly mediating between different ministries. The Environment Ministry will retain a specific role, currently undefined, but likely to be in an expert capacity.[123]

94. The German Government has also announced plans for a sustainable development council comprising 10-15 individually selected 'personalities' selected by the Chancellor. The council will have a secretariat based in the independent Science Centre in Berlin (again avoiding a particular ministerial home). The science centre has experience mediating difficult issues. The council appears likely to have the same mixed remit as the UK Sustainable Development Commission—partly checking on progress, and partly working on solutions and offering advice.

95. The Bundesrechnungshof (the German national audit body) has a similar remit to that of the UK National Audit Office (ie allowing performance audit of policy areas including the environment but with no special reference to, or arrangements for, the environmental impacts from government activity.)[124]

New Zealand

96. New Zealand was the first country to create a Parliamentary Environmental Commissioner in 1990. The Commissioner is an Officer of Parliament who, with the objective of maintaining and improving the quality of the environment, reviews and provides advice on the system of agencies and processes established by the Government to manage the allocation, use and protection of natural and physical resources. He provides advice on the adequacy of relevant laws, regulations, and proposed legislation, the performance of central and local government agencies undertaking delegated duties and on any preventive measures and remedial action for protecting the environment.

97. The Parliamentary Commissioner's functions are to:

    —  review the system of agencies and processes established by the government to manage the allocation, use and preservation of natural and physical resources;
    —  investigate any matter in respect of which the environment may be or has been adversely affected;
    —  investigate the effectiveness of environmental planning and management undertaken by public authorities;
    —  respond to requests from the House of Representatives.

98. The Commissioner is appointed by the Governor-General on the recommendation of the House of Representatives and holds office for five years. The Commissioner is independent of the executive arm of government and may only be removed or suspended from office by the Governor-General. He is free to publish reports when he wants, but also publishes an annual report. He may give evidence or advice to various parliamentary committees.


99. In December 1992 the Commonwealth of Australia, all States and Territories and Local Government endorsed a National Strategy for Ecologically Sustainable Development. This contained the following principles:

    —  decision-making should integrate long and short term economic, environmental, social and equity considerations;
    —  the precautionary principle;
    —  the global dimension of environmental impacts of actions and policies;
    —  the need to develop a strong, growing and diverse economy which can enhance the capacity for environmental protection;
    —  the need to maintain international competitiveness in an environmentally sound manner;
    —  cost effective and flexible policy instruments should be adopted, such as improved valuation, pricing and incentive mechanisms; and
    —  the need to involve the community in decisions which affect them.

100. The Australian Capital Territory (ACT) has an Environmental Commissioner created in 1993. The Commissioner is a part-time appointee of the Minister for Urban Services but does, however, have statutory rights of access to departmental files and papers. His role is to:

    —  produce State of the Environment reports for the ACT
    —  investigate complaints from the community, regarding the management of the Environment by the ACT Government and/or its agencies
    —  conduct investigations directed by the Minister
    —  initiate investigations into actions of an Agency, where those actions have a substantial impact on the environment of the ACT
    —  make recommendations for consideration by Government and include in his Annual Report the outcomes of those recommendations

101. The Commissioner produces a trienniel State of Environment report by 31 March in each pre-election year covering the three previous years; an annual report; and special reports either in response to the Minister's request or autonomously. Limited resources have restricted the number of special reports he has in fact produced to date.

102. In Victoria, the Public Accounts and Estimates Committee (PAEC) of the Victoria Parliament looked at environmental accounting and reporting in 1998 and is currently conducting a follow-up exercise.[125] The Committee originally looked at the development of national environmental accounting including the greening of GDP and the production of 'satellite' environmental accounts to augment traditional financial data; reporting on the state of the environment; the reporting by public and private organisations on activities affecting the environment; and public sector reporting on efforts and accomplishments in relation to the environment including environmental performance indicators.[126] It is perhaps significant that it was the Public Accounts etc. Committee that undertook this investigation rather than the Committee on the Environment and Natural Resources.

103. The PAE Committee reported in 1999. It made a large number of recommendations across the topics identified above. With regard to environmental reporting and its audit and verification, the Committee's interim report included the following recommendations that the Victoria government should:

—  encourage the relevant professionals and stakeholders to develop a new accounting standard for

    public sector reporting on environmental issues;

    —  require all departments and agencies to implement an environment improvement plan;

    —  develop an integrated environmental and financial reporting framework for the public sector, which will convey useful information to decision makers; and present a balanced perspective of the government's environmental performance;

    —  pursue the development of standards for auditors of environmental information in public sector annual reports and public sector environmental performance reports.

The Committee's current inquiry is looking at proposals for a Commissioner for Ecologically Sustainable Development, perhaps situated within the Auditor-General's Office, to be responsible for: a state of the environment report to Parliament; the audit of compliance with environmental and nature conservation legislation, and the provision of an ombudsman role for considering public complaints.[127]


104. In Canada, uniquely, there is a Commissioner within the national audit body with responsibility for auditing the federal government's progress towards a more sustainable pattern of development. To this end we visited Ottawa and Toronto in May 2000 to discuss matters with the principals involved.

(i) Federal environmental audit

105. The office of the Commissioner of the Environment and Sustainable Development (CESD) was created through amendments to the Auditor General Act in 1995, and the first CESD took up office in 1996. It had originally been recommended that the CESD should be a completely separate and independent institution. However, though statutorily distinct, the CESD was placed within the Auditor General's office. We heard that initial unease about this implementation had ameliorated as the office gained from the regard in which the OAG was held and the institutional experience in the Office in dealing with government.

106. The 1995 reforms introduced a balance of new requirements and new scrutiny. All federal departments were required to publish individual sustainable development strategies every three years (beginning in 1997) in similar manner to the requirements of the US Government Performance and Results Act. One of the CESD's primary functions was to report on the progress made by departments against these strategies. The CESD stressed to us that in this instance his audit relied on the strategies and the data provided by departments. He did not sample the information provided. The Commissioner could also carry out other audits on specific issues (such as the management of toxic substances), contribute to other work of the OAG and follow up on public petitions on environmental issues submitted by citizens. The CESD provides a single annual report to Parliament in the form of the Committee on the Environment and Sustainable Development.

107. We noted that the remit of the Committee to whom the CESD reported was specifically focused on the environment departments and agencies. It was also responsible for scrutinising draft environmental legislation. This meant that in practice its capacity to pursue topics and issues raised in the CESD's reports was limited (nor had other parliamentary committees yet begun to exploit this potential). At the time of our visit the Canadian Committee had held hearings with the CESD on publication of his report but had yet to take his conclusions forward in an inquiry of their own.

108. We were particularly impressed by the depth of coverage of the studies undertaken by the CESD and it noted that the number of environmental studies undertaken had increased significantly since the creation of his office. This was facilitated by the resources available to him—some thirty staff within the Office of the Auditor General. The audit on toxic substances alone covered the relevant work of six departments, and had required a team of 4 full-time staff supplemented by addition staff on a part-time basis. The budget for the CESD annual report was C$5 million.

109. We were also struck by the similarity between the main findings of the CESD in his work to date and our own conclusions from our work on greening government within the UK. Key points made by the Commissioner in his reports to date have been:

    —  the extent of the gap ("the implementation gap") between government commitments and action taken: in many areas federal government's performance was described as falling well short of its stated objectives;

    —  the lack of coordination between departments and between jurisdictions, and the fact that emphasis on departmental strategies can weaken work on cross-cutting issues;

    —  inadequate review of performance and provision of information to Parliament. The 1999 report admitted that as a result "we are unable to conclude whether the strategies are on track or whether corrective action is required";

    —  improving and measuring environmental performance was feasible and large financial a well as environmental benefits were realisable—but there was currently no basis for reporting to Parliament in a consistent and comparable form across departments and no confidence of central leadership to develop such measures;

    —  government as a whole and each department has made firm commitments to integrating environmental considerations into their policy-making but some departments have not yet come to terms with this challenge in practice and Parliament again had no way of judging the actions taken by departments on this score; and

    —  strategic environmental assessment of all policies with significant environmental implications was required by 'Cabinet directive'—the Commissioner describes departmental compliance as "slow and inconsistent".

110. The year 2000 will mark a particularly important stage in the evolution of Canadian federal policy as departments are obliged to revise their sustainable development strategies and submit them to Parliament. The CESD has already indicated what improvements he expects, and he will be reviewing the new strategies in 2001.

(ii) Provincial environmental audit

111. In Ontario we met the Environmental Commissioner of Ontario (ECO), Mr Gord Miller, whose primary role was to oversee the operation of the Ontario Environmental Bill of Rights (EBR). This legislation established a formal framework for notifying the public about proposed legislation, policies, regulations and other legal instruments that would have a significant effect on the environment and considering the public's input before final decision. It set up an Environmental Registry where notice and information on environmentally significant proposals, decisions, court actions and other information relating to ministerial decisions are required to be posted.

112. Under the EBR, the public had six main rights:

    —  they should be notified of all proposals which would affect the environment, through access to the on­line environmental registry;
    —  the public could comment to the ECO on proposals on the registry. Comments were monitored by the ECO's own staff and forwarded to Ministries;
    —  the public may appeal against decisions after they are posted to the registry, thus extending to the general public a right which companies had long enjoyed;
    —  the public could request a review of decisions posted to the registry (provided at least two people appealed to the ECO). However, although Ministers could refuse reviews on the grounds that the decision was a matter of policy. One of the ECO's key roles was to ensure that departments did indeed carry out these reviews and report back to him;
    —  the public had the right to sue in court if a public resource was being threatened;
    —  members of the public had legal rights of protection for whistle-blowing activities.

113. Any Ontario resident, therefore, could in theory hold the government accountable for what it did—or did not do—to protect the environment by appealing to the ECO. His powers only kick in if there were such appeals. In this respect he functioned as an ombudsman. We also noted that most (though not all) government ministries must develop and implement Statements of Environmental Values (SEVs) to guide their actions. SEVs were in fact very similar to the federal departments' sustainable development strategies, addressing both operations and policy. Assessing the quality and implementation of ministries' SEVs was also a main task for the Commissioner. He may also investigate general policy issues and ministerial decisions and indeed analysis of such issues formed a major part of the 1998 report: ie climate change, urban sustainability, waste and land stewardship.

114. The ECO reported annually to the Legislature (by whom the appointment is made for a 5 year term). In published reports, the (previous) Commissioner had been quite critical of the government: the capacity of the government to protect the environment was described as 'declining'; ministries' SEVs were not backed up by action; a lack of resources and over-reliance on industry's self-monitoring was identified; government strategies 'languished'; and some EBR processes were 'violated' by ministers. There were also examples given of positive benefits from the operation of the new system. We noted in particular criticism that ministries' statements of environmental values were not reflected in their Business Plans (which contained their concrete targets and objectives)—reflecting perhaps a lack of genuine commitment to implementing the fine words.

115 Back

116 Back

117  Organisation of Economic Cooperation and Development (OECD), 2000 Back

118  INTOSAI has an active environmental audit working group Back

119  First Report, 1999-2000, HC 44, see para 1-2 Back

120  Towards a Sustainable America, May 1999, p15 Back

121  Enquete Commission on Sustainable Development, Report, Bundestag, 1998 Back

122  Heads of German ministries tend to be political appointees rather more like in the US than in the UK Back

123  Enquete Commission on Sustainable Development, Report, Bundestag, 1998 Back

124  Bundesrechnungshof, November 2000  Back

125  There is also a Committee on the Environment and Natural Resources in the Victoria Parliament Back

126  Public Accounts and Estimates Committee, Victoria Parliament, New South Wales, Issue Paper No 3, March 1998  Back

127  Issues Paper, follow-up inquiry into environmental accounting and reporting, June 2000, Public Accounts and Estimates Committee, Victoria Parliament, Australia Back

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