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Auditing and Sustainable Development

Harvey L. Mead Sustainable Development Commissioner Quebec, Canada

Conference of the International Consortium on Governmental Financial Management (ICGFM) ´Joining Forces for Responsible Leadership to Enhance Good Governance: The People, the Public Officials, the Private Sector and the Pressµ
Miami, Florida May 23, 2008

Action on Development
I. Approaches in the international sphere
± MDGs ± Paris Declaration ± OECD follow-up

II. Quebec and a change of direction
± SD Act ± SD Strategy, Action Plans and Indicators ± SD Commissioner

III. Putting it all in the balance
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I. An international challenge 
The Paris Declaration
± National development strategies and action plans ± Indicators ± Tools and approaches 

Five-year assessment of the MDGs  OECD follow-up on strategic assessment
± International Association for Impact Assessment Award to the Development Assistance Committee of the OECD

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Paris Declaration 2005 
Paris Declaration on Aid Effectiveness:
Ownership, Harmonisation, Alignment, Results and Mutual Accountability ± Actions to reform the ways aid is delivered and managed ± Twelve indicators ± Mechanisms for accountability 

Preparing for the five-year review of the MDGs

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Paris Declaration: Strategic assessment targeted
Promoting a harmonised approach to environmental assessments  40. This progress [by donors in harmonisation around environmental impact assessment (EIA)] needs to be deepened, including on addressing implications of global environmental issues such as climate change, desertification and loss of biodiversity.  41. Donors and partner countries jointly commit to:
± Strengthen the application of EIAs and deepen common procedures for projects, including consultations with stakeholders; and develop and apply common approaches for ³strategic environmental assessment´ at the sector and national levels.
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Managing for results: strategies and indicators 

44. Partner countries commit to:
± Strengthen the linkages between national development strategies and annual and multi-annual budget processes. ± Endeavour to establish results-oriented reporting and assessment frameworks that monitor progress against key dimensions of the national and sector development strategies; and that these frameworks should track a manageable number of indicators for which data are costeffectively available (Indicator 11)

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Indicator 9: Strategic assessment involved 

Indicator
± Use of common arrangements or procedures ² Percent of aid provided as programme-based approaches. 

Target
± 66% of aid flows are provided in the context of programmebased approaches.

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OECD in 2004 and 2006 

Applying Strategic Environmental Assessment: Good Practice Guidance for Development Co-Operation  Development Assistance Committee of the OECD
± Team on strategic environmental assessment set up in 2004 ± Guide published in 2006
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II. Donor countries also at work 

Quebec¶s Sustainable Development Act (April, 2006)
± A change of course identified as necessary
‡ Recent development not sustainable

± ± ± ±

A set of principles in the Act A Sustainable Development Strategy required by the Act A set of indicators required by the Act An action plan required by the Act on the part of all the government entities (approximately 150)

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The Act provides a definition of SD
Sustainable development refers to the activities carried out to ensure human beings a healthy and productive life, which is in harmony with nature and establishes an equity between generations (current and future), by maintaining functional ecosystems and the biodiversity for which they provide habitat, while respecting the sociocultural heritage, the social fabric of societies. These activities include the education and training of the population with a view to its participation in the planning and decision-making processes, including elements of an economic nature. The processes in question are designed in such a way as to clearly target the appropriate level of intervention and give priority to dialogue and collaboration between all decisionmakers. 10

The Act identifies a set of SD tools
The carrying out of these activities must be based on the use of tools making it possible to take into account the issues at stake associated with the integration of human activities in the framework provided by the biophysical environment and the social fabric of individuals¶ lives. These tools may include strategic assessment, processes to evaluate and manage social and environmental risks, several economic tools and the life cycle approach. This latter approach provides a framework for carrying out several evaluations, including energy assessments and the calculation and integration of the costs associated with externalities.
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An independent auditor of SD 

Quebec¶s Auditor General Act (revised, April 2006)
± Position of Sustainable Development Commissioner and Assistant Auditor General
‡ Mandate to audit progress in sustainable development ‡ Requirement to report annually to the National Assembly

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Observations of Quebec·s Sustainable Development Commissioner - 2007 
The recognition of a situation of overshoot in relation to the planet¶s support capacity results in a feeling of urgency and justifies the change of direction advocated by the Sustainable Development Act.  It is important to know the international context of current development in order to identify the appropriate interventions for the change of direction that needs to be brought about.  It is important to know the historical context of current development in order to identify the appropriate interventions for the change of direction that needs to be brought about.  Sustainable development refers to everything associated with development, including economic activities.  Sustainable development is not a field that is reserved for specialists; it concerns any person who, having recognized the situation of overshoot, endeavours to take corrective action.
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Observations of Quebec·s Sustainable Development Commissioner - 2007 
All of the activities of the Administration aim to contribute to the development of society.  The principles set forth in the Sustainable Development Act provide a global framework for interventions; the Act emphasizes: ± the objective of development, namely social progress: people are entitled to a healthy and productive life, ‡ and actions are undertaken with a concern for intra- and inter-generational equity; ± the condition for development, namely respecting the support capacity of ecosystems.  Sustainable development is based on a long-term vision and consequently requires long-term planning.

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Observations of the Sustainable Development Commissioner - 2007 
Development planning must use tools making it possible to integrate all of the issues at stake.  The characteristics of sustainable development suggest having recourse to ecological economics to guide interventions.  One of the first measures related to having recourse to ecological economics consists in looking for synthetic indicators that complement the Gross Domestic Product (GDP).  Auditing work must be carried out on the basis of the following elements: synthetic indicators that complement the GDP, the principles of sustainable development, as well as the tools developed for it.  The auditing of the development processes undertaken by the Administration entails the examination of certain priority issues, including those associated with demography and energy.
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Environment, economy, development
The characteristics of sustainable development suggest having recourse to ecological economics to guide interventions.

ENVIRONNEMENT

Matières

Matières

ÉNERGIE SOLAIRE
Énergie

ÉCONOMIE
Énergie

CHALEUR

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Quebec Government SD Strategy 
Required by the Act  Tabled in December 2007  9 orientations and 29 objectives  Audit results for 2007
± No formal targets, no indicators, no time-lines ± Government documents remedy in part these weaknesses

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Action plans for implementation 
150 government entities subject to the Act¶s requirements  Tabling of action plans required for 31 March 2009  Challenges
± Follow standards for results-based management ± Relate in a monitorable way to the SD Strategy ± Work with or develop data with time series

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Environment and Sustainable Development Commissioner ² Canada October 2007
After a decade, sustainable development strategies are a major disappointment. For the most part, senior managers in departments have not demonstrated that they take the strategies seriously, and few parliamentary committees have considered them. The government has indicated that sustainable development is a government-wide initiative, not just a departmental one. Successive governments have committed to producing a federal strategy for sustainable development that would guide the efforts of individual departments and clearly indicate what is expected of them. However, this has not yet been done.
Report of the Commissioner of the Environment and Sustainable Development, Canada, October 2007

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Environment and Sustainable Development Commissioner ² Canada March 2008
It will be important for the government to develop clear and realistic overall objectives that are specific and measurable, with targets and milestones, in order to ensure that its many environmental challenges are addressed in a practical and coordinated manner by departments and agencies. Once an overall plan is in place, it needs to be brought to life by establishing clear and realistic department objectives, strong commitment at senior levels, clear direction, and adequate funding.
Report of the Commissioner of the Environment and Sustainable Development, Canada, March 2008
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Indicators of progress in SD 
Required by the Act  To be tabled in 2008  Challenges
± Respond to a coherent vision of SD ± Relate clearly to the SD Strategy ± Develop or organize data with time series

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Action Plan of the Auditor General 
Identification of tools facilitating the application of the principles of the Act:
± Life cycle analysis ± Strategic evaluation ± Risk assessment 

Targets set:
± 50% of audit missions in 2008 and 2009 will use these tools

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Strategic Assessment 
Implicit but crucial in the Sustainable Development Act
± The Act aims to better integrate the pursuit of SD into the policies, programs and actions of the Administration, at all levels and in all areas of intervention ± SD is based on a long-term approach ± The principles in the law and the government SD strategy aim to ensure that government actions are coherent ± The principles of prevention and of precaution require a comprehensive and long-term approach
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Environment and Sustainable Development Commissioner ² Canada March 2008
Of particular concern is the poor performance by departments and agencies in conducting strategic environmental assessments when developing policy and program proposals. These assessments are required when proposals that are submitted to Cabinet have an environmental impact. Public reporting is required whenever assessments are done. This is similar to the situation we found last October when examining sustainable development strategies where performance was also poor. Once again, the lack of commitment at senior levels is a root cause of these problems. Strategic environmental assessments and sustainable development strategies need to be revitalized on a priority basis in order to help the government « achieve sustainable development over the longer term. Report of the Commissioner of the Environment and Sustainable Development, Canada, March 2008
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III. Putting things in context: Studies by the SD Commissioner 
Objective: Measure the challenge involved in bringing about a change of direction in Quebec¶s development  2007: Ecological Footprint of Quebec
± 1.8 global hectares available, 2.2 already required ± Quebec: 6 global hectares per person required
‡ (Canada: 7.6, Alberta 9, Nova Scotia 8)

± Three planets required for equitable development:

An indicator of the importance of the challenge
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The obese planet

Living Planet Report, WWF, Zoological Society of London, Global Footprint Network (2006)

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Putting things in context: Studies by the SD Commissioner 
Objective: Obtain a more complete picture of the well-being associated with Quebec¶s development  2008: Genuine Progress Indicator
± ± ± ± A necessary complement to the GDP Following the OECD initiative ³Beyond GDP´ An indicator of a new vision of development A challenge to calculate

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GDP and GPI
ne of the first measures related to having recourse to ecological economics consists in looking for synthetic indicators that complement the Gross Domestic Product (GDP).

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Ecological Footprint and Human Development Index

Canada

Living Planet Report, WWF, Zoological Society of London, Global Footprint Network (2006)

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