7KH %RQQ $JUHHPHQW WR WKH .\RWR 3URWRFRO ±

7KH %RQQ $JUHHPHQW WR WKH .\RWR 3URWRFRO ±

3DYLQJ WKH :D\ IRU 5DWLILFDWLRQ

+HUPDQQ (. 2WW

:XSSHUWDO ,QVWLWXWH IRU &OLPDWH, (QYLURQPHQW DQG (QHUJ\

WR EH SXEOLVKHG LQ:

,QWHUQDWLRQDO (QYLURQPHQWDO $JUHHPHQWV: 3ROLWFV, /DZ DQG (FRQRPLFV 9RO.1, 1R.4, 2FWREHU 2001

$EVWUDFW: 7KLV DUWLFOH SURYLGHV D VKRUW DFFRXQW RI WKH LQWHUQDWLRQDO FOLPDWH QHJRWLDWLRQV WKDW WRRN SODFH LQ %RQQ IURP 16 WR 27 -XO\ 2001. $IWHU WKH 6L[WK &RQIHUHQFH RI WKH 3DUWLHV WR WKH

)UDPHZRUN &RQYHQWLRQ RQ &OLPDWH &KDQJH IDLOHG LQ 1RYHPEHU 2000, WKH 3DUWLHV KDG GHFLGHG WR VXVSHQG WKH PHHWLQJ. 7KH PLQLVWHUV SUHVHQW DW WKH UHVXPHG VHVVLRQ LQ %RQQ VXFFHVVIXOO\ DGRSWHG WKH ³%RQQ $JUHHPHQW WR WKH .\RWR 3URWRFRO´, D VHW RI SROLWLFDO FRPSURPLVHV IRU WKH PRVW FRQWHQWLRXV LVVXHV OHIW RSHQ E\ WKH .\RWR 3URWRFRO. $OWKRXJK PDQ\ GHWDLOV KDYH EHHQ WUDQVIHUUHG WR WKH 6HYHQWK &RQIHUHQFH RI WKH 3DUWLHV, 1RYHPEHU 2001 LQ 0DUUDNHVK, 0RURFFR, WKH %RQQ $JUHHPHQW KDV SDYHG WKH ZD\ IRU UDWLILFDWLRQ RI WKH .\RWR 3URWRFRO DQG LWV HQWU\ LQWR IRUFH.

1. ,QWURGXFWLRQ

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¶V H\HV ZHUH RQFH DJDLQ RQ WKH QHJRWLDWRUV DQG WKDW HYHU\ PRYH E\ DQ\ FRXQWU\ ZRXOG EH GXO\ QRWLFHG.

0D\EH, KRZHYHU, WKH UHDVRQ IRU WKLV GLIIHUHQW IODYRXU ZDV VLPSO\ WKH VWURNH RI JHQLXV WKDW KDG WRXFKHG WKH UHVXPHG VHVVLRQ RI WKH 6L[WK &RQIHUHQFH RI WKH 3DUWLHV WR WKH 81 )UDPHZRUN &RQYHQWLRQ RQ &OLPDWH &KDQJH. 7KLV VWURNH ZDV HPERGLHG LQ D EHDXWLIXOO\ FUDIWHG WH[W HQWLWOHG Ä&RUH (OHPHQWV IRU WKH ,PSOHPHQWDWLRQ RI WKH %XHQRV $LUHV 3ODQ RI $FWLRQ³. ,W ZDV FRPSLOHG E\ WKH 6HFUHWDULDW XQGHU WKH DXWKRULW\ RI 3UHVLGHQW 3URQN DQG EXLOW RQ QHJRWLDWLRQV FRQGXFWHG LQ YDULRXV IRUPDO DQG LQIRUPDO JURXSV. 5HOHDVHG DW 11 SP RQ 6DWXUGD\ QLJKW, LWV FDUHIXOO\ ZRUGHG IRUPXODWLRQV DQG PDVWHUO\ EDODQFHG FRPSURPLVHV DOWHUHG WKH FKDUDFWHU RI WKH PHHWLQJ FRPSOHWHO\. ,W FDPH LQ WLPH WR EH UHFRJQLVHG E\ WKH *8-+HDGV RI 6WDWH DQG

*RYHUQPHQW LQ *HQRD, DOWKRXJK WKH VXPPLW GLG QRW SURYLGH D IRUPDO HQGRUVHPHQW RI WKH SDFNDJH. %XW WKHUH ZDV QR WXUQLQJ EDFN DIWHU WKLV SDSHU KDG EHHQ SXW RQ WKH WDEOH.

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Ä%RQQ $JUHHPHQW IRU WKH ,PSOHPHQWDWLRQ RI WKH %XHQRV

$LUHV 3ODQ RI $FWLRQ³, DV LW ZDV RIILFLDOO\ WHUPHG, ZDV UHDG\ WR EH DGRSWHG E\ WKH PLQLVWHULDO VHJPHQW RQ 0RQGD\ 23 -XO\ DW DERXW QRRQ.

7KLV DJUHHPHQW ODUJHO\ IXOILOV WKH %XHQRV $LUHV 3ODQ RI $FWLRQ WKDW WKH 3DUWLHV KDG DGRSWHG LQ ODWH 1998 LQ RUGHU WR IOHVK RXW WKH .\RWR 3URWRFRO. ,W WKXV SDYHV WKH ZD\ IRU UDWLILFDWLRQ DQG VKRXOG HQVXUH WKDW WKH WUHDW\ HQWHUV LQWR IRUFH E\ ODWH 2002 ± LQ WLPH IRU FHOHEUDWLRQ E\ WKH

-RKDQQHVEXUJ 6XPPLW. ,I WKLV FDQ EH DFKLHYHG, WKH VHYHUH HQYLURQPHQWDO GHILFLWV RI WKLV DJUHHPHQW ZRXOG EH RXWZHLJKHG E\ WKH SROLWLFDO PRPHQWXP JHQHUDWHG E\ WKH HQWU\ LQWR IRUFH RI WKH SURWRFRO. +RZHYHU, PDQ\ GHWDLOV UHPDLQ WR EH GHFLGHG E\ WKH VHYHQWK &RQIHUHQFH RI WKH 3DUWLHV 2FWREHU/1RYHPEHU WKLV \HDU LQ 0DUUDNHFK/0RURFFR. 7KLV SDSHU SURYLGHV D ILUVW

DVVHVVPHQW DQG SRLQWV WR VRPH LVVXHV WKDW ZLOO FRPH XS LQ WKH LPSOHPHQWDWLRQ RI WKH .\RWR 3URWRFRO DQG LWV %RQQ $JUHHPHQW. $IWHU SURYLGLQJ DQ RYHUDOO DVVHVVPHQW RI WKH QHJRWLDWLRQV, WKH DUWLFOH GHDOV ZLWK WKH IRXU PDMRU DUHDV RI FRQWHQWLRQ UHVSHFWLYHO\: SURYLVLRQV UHODWLQJ WR GHYHORSLQJ FRXQWULHV, WKH .\RWR PHFKDQLVPV, ODQG-XVH, ODQG-XVH FKDQJH DQG IRUHVWU\ (/8/8&)) DQG, ILQDOO\, SURFHGXUHV DQG PHFKDQLVPV UHODWLQJ WR FRPSOLDQFH XQGHU WKH .\RWR 3URWRFRO.

2. 2YHUDOO $VVHVVPHQW

7KH VOLJKWO\ ELWWHU IODYRXU RI WKH FRPSURPLVH DJUHHPHQW FHUWDLQO\ VWHPV IURP WKH IDFW WKDW WKH LPPHGLDWH HQYLURQPHQWDO HIIHFW RI WKH .\RWR 3URWRFRO KDV EHHQ UHGXFHG FRQVLGHUDEO\. $UWLFOH

3.1 RI WKH SURWRFRO WH[W FRPPDQGV D UHGXFWLRQ RI JUHHQKRXVH JDVHV FRQWDLQHG LQ WKH VR-FDOOHG ÄEDVNHW³ RI DW OHDVW ILYH SHUFHQW FRPSDUHG WR 1990 OHYHOV (2EHUWKU/2WW 1999; *UXEE HW DO. 1999). 8QGHU WKH %RQQ $JUHHPHQW, KRZHYHU, WKH RYHUDOO UHGXFWLRQ, LI DOO SURYLVLRQV ZHUH XVHG, ZRXOG OHDG WR D UHGXFWLRQ RI RQO\ DERXW 2.5 SHUFHQW (%URXQV/6DQWDULXV 2001). 7KLV LV PDLQO\ GXH WR WKH ODUJH H[WHQW WR ZKLFK FDUERQ DEVRUELQJ DFWLYLWLHV PD\ EH XVHG WR UHDFK WKRVH FRPPLWPHQWV FRQWDLQHG LQ $UWLFOH 3 RI WKH .\RWR 3URWRFRO. ,Q DGGLWLRQ, WKH (XURSHDQ 8QLRQ GLG QRW VXFFHHG WR LPSRVH D TXDQWLWDWLYH FDS RQ WKH XVH RI WKH HFRQRPLF LQVWUXPHQWV, QDPHO\ (PLVVLRQV 7UDGLQJ, -RLQW ,PSOHPHQWDWLRQ (-,) DQG WKH &OHDQ 'HYHORSPHQW 0HFKDQLVP (&'0). 7KLV ZLOO OHDG WR D IXUWKHU GHFUHDVH LQ HPLVVLRQV UHGXFWLRQV WKDW 3DUWLHV ZLOO KDYH WR LPSOHPHQW GRPHVWLFDOO\. )XUWKHUPRUH, WKH DEVWHQWLRQ RI WKH 8QLWHG 6WDWH ZLOO LQFUHDVH WKH DPRXQW RI VR-FDOOHG ÄKRW DLU³ IURP 5XVVLD DQG WKH 8NUDLQH DYDLODEOH WR WKH UHPDLQLQJ $QQH[

%-FRXQWULHV.

2Q WKH RWKHU KDQG, WKH SURYLVLRQV FRQFHUQLQJ WKH WUDQVIHU RI WHFKQRORJLHV DQG ILQDQFLDO UHVRXUFHV WR GHYHORSLQJ FRXQWULHV SURYLGH IRU D VXEVWDQWLDO LPSURYHPHQW DQG ZLOO PRVW SUREDEO\ HQVXUH EURDG SDUWLFLSDWLRQ RI WKRVH FRXQWULHV. $SDUW IURP WKH OHYHO RI IXQGLQJ, WKH

FRPSRVLWLRQ RI WKRVH ERGLHV RYHUVHHLQJ WKH LPSOHPHQWDWLRQ RI WKHVH SURYLVLRQV SURYHG WR EH PRVW FRQWHQWLRXV. 7KH IRUPXOD ILQDOO\ IRXQG EXLOGV RQ WKH VXFFHVVIXO SUDFWLFH LQ WKH FRQYHQWLRQ¶V ERGLHV VR IDU DQG ZLOO PRVW SUREDEO\ HQVXUH D VXFFHVVIXO LPSOHPHQWDWLRQ. 7KH FRPSURPLVH IRU WKH FRPSOLDQFH SURFHGXUH LV YLDEOH DV ZHOO. 'HVSLWH WKH XQFHUWDLQW\ UHJDUGLQJ LWV OHJDO QDWXUH, WKH SURFHGXUH LV WKH VWURQJHVW HQYLURQPHQWDO FRPSOLDQFH SURFHGXUH HYHU DGRSWHG DQG FRQWDLQV PRVW HOHPHQWV QHFHVVDU\ IRU LWV IDFLOLWDWLYH DQG HQIRUFHPHQW IXQFWLRQV.

7KH PDMRU RXWFRPH RI WKH UHVXPHG VHVVLRQ RI &23 6 LV WKH %RQQ $JUHHPHQW, D SDFNDJH RI SROLWLFDO GHFLVLRQV IUDPHG LQ ELQGLQJ ODQJXDJH LQFRUSRUDWHG LQ DQ $QQH[ WR 'HFLVLRQ 5/&3.62. 7KLV $QQH[ FRQWDLQV WKH Ä&RUH (OHPHQWV IRU WKH ,PSOHPHQWDWLRQ RI WKH %XHQRV $LUHV 3ODQ RI

$FWLRQ³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

&RQVHTXHQWO\, DOO UHPDLQLQJ FRQWHQWLRXV LVVXHV ZHUH WUDQVIHUUHG WR &23 7 ODWHU WKLV \HDU IRU IXUWKHU FRQVLGHUDWLRQ DQG DGRSWLRQ. 3DUWLFLSDQWV QRWHG WKDW WKH 86 LQ WKH UXQ-XS WR &23 7 PLJKW EH WHPSWHG WR JLYH XS LWV UDWKHU UHVWUDLQHG DWWLWXGH. 7KLV ZRXOG OHDG WR D VWDQGVWLOO DQG DFKLHYLQJ SURJUHVV ZLOO WKXV UHTXLUH FRQWLQXHG SROLWLFDO SUHVVXUH IURP WKH WRS OHYHOV RI JRYHUQPHQW. 2U, DV *UHHQSHDFH SXW LW LQ D SUHVV UHOHDVH: WKH ZRUN KDV MXVW EHJXQ!

3. ,VVXHV 5HODWLQJ WR 'HYHORSLQJ &RXQWULHV

$ FRUH GHPDQG RI GHYHORSLQJ FRXQWULHV LQ WKH UXQ-XS WR &23 6 KDG EHHQ VRPH PDQGDWRU\ ODQJXDJH RQ DGGLWLRQDO IXQGLQJ. 7KLV ZDV QRW DFKLHYHG, DOWKRXJK WKH %RQQ $JUHHPHQW HVWDEOLVKHV WKUHH QHZ IXQGV IRU GHYHORSLQJ FRXQWULHV, WZR XQGHU WKH )&&& DQG RQH XQGHU WKH

.\RWR 3URWRFRO. 8QGHU WKH &RQYHQWLRQ, D 6SHFLDO &OLPDWH &KDQJH )XQG FRPSOHPHQWDU\ WR

*() IXQGLQJ VKDOO SURYLGH ILQDQFHV IRU DGDSWDWLRQ, WHFKQRORJ\ WUDQVIHU, DQG WKH PLWLJDWLRQ RI JUHHQKRXVH JDVHV. $ IXUWKHU SURYLVLRQ UHODWHV WR FRXQWULHV WKDW DUH KHDYLO\ GHSHQGHQW RQ WKH H[SRUW RI IRVVLO IXHOV DQG HQFRXUDJHV DFWLYLWLHV WR DVVLVW WKHVH FRXQWULHV LQ GLYHUVLI\LQJ WKHLU HFRQRPLHV. $ VHFRQG IXQG XQGHU WKH &RQYHQWLRQ LV UHVHUYHG IRU OHDVW GHYHORSHG FRXQWULHV.

%RWK IXQGV UHO\ RQ YROXQWDU\ FRQWULEXWLRQV DQG WKH (XURSHDQ 8QLRQ WRJHWKHU ZLWK &DQDGD,

-DSDQ DQG 6ZLW]HUODQG KDV PDGH D SROLWLFDO FRPPLWPHQW WR SURYLGH 86$ 410 PLOOLRQ SHU \HDU WR WKH IXQGLQJ PHFKDQLVPV.

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ÄSHUYHUVH LQFHQWLYHV³. 7KLV SURYLVLRQ VKRXOG VWUHQJWKHQ HIIRUWV WR KDUPRQLVH SROLFLHV DQG PHDVXUHV, XUJHQWO\ UHTXLUHG LQ RUGHU WR IRVWHU FRPPRQ DSSURDFKHV WR LPSOHPHQW WKH .\RWR 3URWRFRO FRPPLWPHQWV.

4. .\RWR 0HFKDQLVPV

$OWKRXJK VRPH ZRUN VWLOO UHPDLQV WR EH GRQH RQ PDQ\ WHFKQLFDO TXHVWLRQV, WKH SURJUHVV DFKLHYHG LQ FODULI\LQJ WKH UROH DQG VWDWXV RI WKH VR-FDOOHG .\RWR 0HFKDQLVPV LV UHPDUNDEOH. 7KH SDUWLHV LQ %RQQ PDQDJHG WR UHDFK DJUHHPHQW RQ WKH PRVW FUXFLDO SROLWLFDO FKRLFHV UHJDUGLQJ (PLVVLRQV 7UDGLQJ, -, DQG WKH &'0. :KDW¶V PRUH, WKH %RQQ $JUHHPHQW FRQWDLQV IRU WKH ILUVW WLPH DQ HWKLFDO HOHPHQW WKDW PLJKW VHUYH DV D OHLWPRWLI IRU WKH IXUWKHU GHYHORSPHQW RI WKH UHJLPH . 7KH &23 DJUHHG WKDW HPLVVLRQV VKRXOG EH UHGXFHG ÄLQ D PDQQHU FRQGXFLYH WR QDUURZLQJ SHU FDSLWD GLIIHUHQFHV EHWZHHQ GHYHORSHG DQG GHYHORSLQJ FRXQWU\ 3DUWLHV³ ± D ILUVW KLQW DW D SURFHVV RI FRQWUDFWLRQ DQG FRQYHUJHQFH WKDW PLJKW OHDG WR D PRUH HTXLWDEOH GLVWULEXWLRQ RI HPLVVLRQV LQ WKH ORQJHU UXQ.

7KH (8 GLG QRW VXFFHHG LQ LWV DWWHPSW WR SODFH D TXDQWLWDWLYH FDS RQ WKH XVH RI WKRVH PHFKDQLVPV IRU WKH LPSOHPHQWDWLRQ RI FRPPLWPHQWV. +RZHYHU, WKH ZRUGLQJ ZLOO DOORZ IRU VRPH SROLWLFDO SUHVVXUH VKRXOG D FRXQWU\ UHO\ VROHO\ RQ SURYLVLRQV IRU JHRJUDSKLFDO IOH[LELOLW\: LW VWLSXODWHV WKDW ÄWKH XVH RI WKH PHFKDQLVPV VKDOO EH VXSSOHPHQWDO WR GRPHVWLF DFWLRQ DQG GRPHVWLF DFWLRQ VKDOO WKXV FRQVWLWXWH D VLJQLILFDQW HOHPHQW³ RI LPSOHPHQWLQJ $UWLFOH 3 RI WKH SURWRFRO. )XUWKHUPRUH, EHFDXVH RI UHVLVWDQFH IURP WKH (XURSHDQ 8QLRQ DQG PDQ\ GHYHORSLQJ FRXQWULHV, QXFOHDU SRZHU LV QRW DQ RSWLRQ IRU DFWLYLWLHV XQGHU WKH &'0 RU -, ($QQH[ ,-3DUWLHV ÄDUH WR UHIUDLQ IURP³...). 3DUWLFLSDWLRQ LQ WKH PHFKDQLVPV LV QRW RQO\ GHSHQGHQW RQ FRPSOLDQFH ZLWK WKH UXOHV RQ UHSRUWLQJ DQG PRQLWRULQJ, EXW DOVR XSRQ DFFHSWDQFH RI D FRPSOLDQFH DJUHHPHQW XQGHU WKH SURWRFRO. 2Q WKH RWKHU KDQG, WKH GHWHUPLQDWLRQ ZKHWKHU D -, RU &'0 SURMHFW DFWLYLW\ LV VXVWDLQDEOH OLHV VROHO\ ZLWK WKH KRVW FRXQWU\. 7KLV ZDV D NH\ GHPDQG RI GHYHORSLQJ FRXQWULHV LQ RUGHU WR IHQG RII ZKDW PDQ\ RI WKHP VHH DV ³XQUHDVRQDEOH GHPDQGV´ E\ LQGXVWULDOLVHG FRXQWULHV.

$V LQ WKH FDVH RI WKH &RPSOLDQFH &RPPLWWHH, WKH FRPSRVLWLRQ RI WKH ([HFXWLYH %RDUG ((%) WR RYHUVHH WKH &'0 ZDV RQH RI WKH PRVW FRQWHQWLRXV LVVXHV. 7KH (% DFFRUGLQJ WR WKH %RQQ

$JUHHPHQW ZLOO KDYH WHQ PHPEHUV, ILYH IURP WKH ILYH UHJLRQDO JURXSV, RQH IURP D VPDOO LVODQG VWDWH DQG WZR IURP $QQH[ , DQG QRQ-$QQH[ , FRXQWULHV UHVSHFWLYHO\. 7KLV IRUPXOD FRPELQHV WKH GHPDQG IRU HTXDO JHRJUDSKLFDO GLVWULEXWLRQ E\ GHYHORSLQJ FRXQWULHV DQG WKH 50:50 FRPSRVLWLRQ SUHIHUUHG E\ PRVW LQGXVWULDOLVHG FRXQWULHV. 1R GHFLVLRQ ZDV WDNHQ FRQFHUQLQJ WKH VXSHUYLVRU\ FRPPLWWHH YHULI\LQJ WKH JHQHUDWLRQ RI HPLVVLRQ UHGXFWLRQ XQLWV XQGHU $UWLFOH 6 RI WKH .\RWR 3URWRFRO (-,).

)XUWKHU GHFLVLRQV LQFOXGH WKH SHUPLVVLRQ WR XVH DIIRUHVWDWLRQ DQG UHIRUHVWDWLRQ DFWLYLWLHV LQ WKH &'0 XS WR D FHLOLQJ RI RQH SHUFHQW RI D SDUW\¶V 1990 HPLVVLRQV DQG WKH HVWDEOLVKPHQW RI D VLPSOLILHG SURFHGXUH IRU VPDOO-VFDOH DFWLYLWLHV XQGHU WKH &'0. 7KLV ODWWHU SURYLVLRQ VDWLVILHV VRPH GHPDQGV RI 1*2V, ZKR RULJLQDOO\ VRXJKW WR UHVWULFW WKH XVH RI WKH &'0 WR UHQHZDEOH HQHUJ\ SURMHFWV H[FOXGLQJ ODUJH K\GUR SURMHFWV. $V UHJDUGV (PLVVLRQV 7UDGLQJ, WKH SDUWLHV DJUHHG WR LQWURGXFH D FRPPLWPHQW SHULRG UHVHUYH, ZKLFK ZLOO IRUFH SRWHQWLDO VHOOHUV WR UHWDLQ WKH ODUJHVW SDUW RI WKHLU DVVLJQHG HPLVVLRQV LQ RUGHU WR SURWHFW DJDLQVW RYHUVHOOLQJ.

5. /DQG-XVH, /DQG-XVH &KDQJH DQG )RUHVWU\ (/8/8&))

+RZ WR DFFRXQW IRU FDUERQ VWRULQJ DFWLYLWLHV ZDV WKH TXHVWLRQ WKDW XOWLPDWHO\ OHG WR WKH IDLOXUH RI 7KH +DJXH DQG WKHVH VR-FDOOHG ³/8/8&)´ DFWLYLWLHV WRRN DOVR FHQWUH VWDJH LQ %RQQ. &DQDGD, $XVWUDOLD, -DSDQ DQG WKH 86 KDG SXVKHG IRU WKH ZLGHVW SRVVLEOH LQFOXVLRQ RI FDUERQ VWRULQJ DFWLYLWLHV, EHFDXVH WDNLQJ WKHP LQWR DFFRXQW ZLOO SURSRUWLRQDWHO\ GHFUHDVH WKH QDWLRQDO REOLJDWLRQV WR UHGXFH HPLVVLRQV RI JUHHQKRXVH JDVHV (2EHUWKU/2WW 1999, 130). 7KH IRUPXOD ILQDOO\ DJUHHG XSRQ ZLOO DGG XS WR DOPRVW WKUHH SHUFHQW RI 1990 HPLVVLRQV RI LQGXVWULDOLVHG FRXQWULHV DQG OHDG WR UHGXFWLRQV LQ HPLVVLRQV RI RQO\ DERXW 2,5 SHUFHQW IRU DOO LQGXVWULDOLVHG FRXQWULHV (%URXQV/6DQWDULXV 2001). ,Q DGGLWLRQ WR WKH KXPDQ LQGXFHG DFWLYLWLHV UHODWLQJ WR DIIRUHVWDWLRQ DQG UHIRUHVWDWLRQ WKDW DUH UHJXODWHG DOUHDG\ XQGHU WKH .\RWR 3URWRFRO ($UWLFOH 3.3), WKH 3DUWLHV ZLOO EH DOORZHG WR WDNH ÄIRUHVW PDQDJHPHQW³, ÄFURSODQG PDQDJHPHQW³,

JUD]LQJ ODQG PDQDJHPHQW³ DQG ÄUHYHJHWDWLRQ³ LQWR DFFRXQW IRU WKHLU QDWLRQDO HPLVVLRQ LQYHQWRULHV XQGHU $UWLFOH 3.4. $ QXPHULFDO FDS RQ IRUHVW PDQDJHPHQW KDV EHHQ HVWDEOLVKHG IRU HDFK FRXQWU\ LQ DQ $SSHQGL[ = WR WKLV GHFLVLRQ. 5XVVLD, LQ WKH GD\V IROORZLQJ WKH DGRSWLRQ RI WKH %RQQ $JUHHPHQW, TXHVWLRQHG WKH YDOLGLW\ RI WKH QXPEHUV LQ $SSHQGL[ =. ,Q RUGHU WR VDYH WKH SURFHVV IURP XQUDYHOOLQJ, D SURYLVLRQ ZDV LQWURGXFHG WKDW SURYLGHV IRU D UHFRQVLGHUDWLRQ RI WKH QXPHULFDO YDOXHV XSRQ UHTXHVW RI D FRXQWU\.

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± D ZRUOG LQ ZKLFK HDFK DFWLYLW\, KRZHYHU VPDOO, PD\ EH YDOXHG LQ WHUPV RI LWV LPSDFW RQ WKH FDUERQ EDODQFH.

6. &RPSOLDQFH

)RU PRVW REVHUYHUV LW FDPH DV D VXUSULVH WKDW FRPSOLDQFH ZDV WKH ODVW LVVXH RI FRQWHQWLRQ LQ WKH QLJKW IURP 6XQGD\ WR 0RQGD\ ZKHQ WKH %RQQ $JUHHPHQW ZDV ILQDOO\ DGRSWHG.

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

SRVWSRQH D GHFLVLRQ RQ WKLV PDWWHU XQWLO IXUWKHU FRQVLGHUDWLRQ E\ WKH ILUVW &RQIHUHQFH RI WKH 3DUWLHV WR WKH .\RWR 3URWRFRO (&23/023 1).

+RZHYHU, GHVSLWH WKLV VHWEDFN WKH PDLQ RSHUDWLRQDO HOHPHQWV RI WKH SURFHGXUH DUH LQ SODFH. 7KH %RQQ $JUHHPHQW WKXV HVWDEOLVKHV D &RPSOLDQFH &RPPLWWHH ZLWK WZR EUDQFKHV: )LUVW, D IDFLOLWDWLYH EUDQFK ZLOO VXSSRUW D SDUW\¶V HIIRUWV WR FRPSO\ ZLWK LWV REOLJDWLRQV. 6HFRQG, DQ HQIRUFHPHQW EUDQFK KDV EHHQ VHW XS WR SURYLGH WKH ³VWLFNV´ WKDW ZLOO LQGXFH FRXQWULHV WR FRPSO\ ZLWK WKHLU PRVW LPSRUWDQW REOLJDWLRQV. 7KHUH DUH YDULRXV PHDVXUHV DYDLODEOH WR WKH &RPSOLDQFH &RPPLWWHH IRU EULQJLQJ DERXW FRPSOLDQFH. $ SDUW\ PD\, IRU H[DPSOH, EH SURKLELWHG IURP HQJDJLQJ LQ VHOOLQJ DFWLYLWLHV XQGHU WKH (PLVVLRQV 7UDGLQJ UHJLPH.

$GGLWLRQDOO\, IRU HYHU\ WRQQH RI HPLVVLRQV E\ ZKLFK D 3DUW\ H[FHHGV LWV WDUJHW, 1.3 WRQQHV ZLOO EH GHGXFWHG IURP LWV DVVLJQHG DPRXQW IRU WKH VXEVHTXHQW FRPPLWPHQW SHULRG. 7KH QRQ- FRPSOLDQW SDUW\ ZLOO EH UHTXLUHG WR VXEPLW D FRPSOLDQFH DFWLRQ SODQ WKDW ZLOO EH UHYLHZHG EH WKH FRPPLWWHH. $Q DSSHDOV SURFHGXUH SURYLGHV IRU D UHYLHZ RI GHFLVLRQV E\ WKH &RQIHUHQFH RI WKH 3DUWLHV. 2YHUWXUQLQJ D GHFLVLRQ RI WKH &RPSOLDQFH &RPPLWWHH UHTXLUHV D WKUHH-IRXUWKV PDMRULW\.

7KH FRPSRVLWLRQ DQG YRWLQJ SURFHGXUH RI WKH &RPSOLDQFH &RPPLWWHH, RULJLQDOO\ WKH VXEMHFW RI ILHUFH GHEDWHV, KDV EHHQ UHVROYHG LQ DQ HIIHFWLYH PDQQHU. ,W IROORZV WKH UXOHV HVWDEOLVKHG IRU WKH FRPSRVLWLRQ RI WKH ([HFXWLYH %RDUG RI WKH &'0 DQG WKXV OHDGV WR D VPDOO PDMRULW\ RI GHYHORSLQJ FRXQWULHV. 7KH WZR EUDQFKHV RI WKH FRPPLWWHH ZLOO EH FRPSRVHG RI WHQ PHPEHUV, RQH IURP HDFK RI WKH ILYH UHJLRQDO JURXSV, RQH PHPEHU RI WKH VPDOO LVODQG VWDWHV DQG WZR IURP

$QQH[ , DQG QRQ-$QQH[ , FRXQWULHV UHVSHFWLYHO\. $ GRXEOH PDMRULW\ YRWLQJ UHTXLUHPHQW VKRXOG SURYLGH IRU FUHGLEOH DQG HIIHFWLYH GHFLVLRQV: WKH FRPPLWWHH VKRXOG WU\ WR UHDFK GHFLVLRQV E\ FRQVHQVXV, IDLOLQJ ZKLFK D PDMRULW\ RI DW OHDVW WKUHH-IRXUWKV ZLOO VXIILFH.

$GGLWLRQDOO\, GHFLVLRQV E\ WKH HQIRUFHPHQW EUDQFK UHTXLUH D VLPSOH PDMRULW\ RI $QQH[ , DV ZHOO DV QRQ-$QQH[ , FRXQWULHV.

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³ELQGLQJQHVV´ LQ LQWHUQDWLRQDO ODZ.

$ SURFHGXUH, DGRSWHG E\ GHFLVLRQ DQG VXSSRUWHG E\ D VWURQJ SROLWLFDO ZLOO, FRXOG LQ IDFW OHDG WR D VLPLODU GHJUHH RI ELQGLQJQHVV IRU D QRQ-FRPSOLDQW SDUW\ WKDQ D SURFHGXUH FRQWDLQHG LQ D IRUPDO WUHDW\. 7KH %RQQ $JUHHPHQW WKXV SUHVHQWV D SURJUHVVLYH DFKLHYHPHQW WKDW PD\ ZHOO IXOILO WKH IXQFWLRQV DVVLJQHG WR LW.

7. &RQFOXVLRQ

,Q VKRUW, WKH %RQQ $JUHHPHQW RQ WKH ,PSOHPHQWDWLRQ RI WKH %XHQRV $LUHV 3ODQ RI $FWLRQ LV D VLJQLILFDQW VWHS IRUZDUG LQ WKH JOREDO HIIRUW WR FRPEDW FOLPDWH FKDQJH. $QRWKHU IDLOXUH WR FRPH WR DQ DJUHHPHQW ZRXOG SUREDEO\ QRW KDYH PHDQW WKH GHDWK RI WKH .\RWR 3URWRFRO DQG FHUWDLQO\ QRW WKH GHDWK RI FOLPDWH SROLF\ DV VXFK. ,W PLJKW KDYH EHHQ D VHYHUH EORZ, KRZHYHU, VHQGLQJ WKH ZURQJ VLJQDO WR LQGXVWU\ DQG FRQVXPHUV DQG GHOD\LQJ WKH SURFHVV IRU D FRXSOH RI \HDUV.

7LPH LV VKRUW, VLQFH WKH ILUVW FRPPLWPHQW SHULRG VWDUWV LQ 2008 DQG GRPHVWLF LPSOHPHQWDWLRQ DV ZHOO DV WKH HODERUDWLRQ RI WKH IOH[LELOLW\ PHFKDQLVPV RQ WKH QDWLRQDO DQG LQWHUQDWLRQDO OHYHOV ZLOO UHTXLUH WLPH. $ ILUVW SURPLVLQJ LQGLFDWLRQ WKDW WKH PHVVDJH IURP %RQQ ZDV ZHOO XQGHUVWRRG E\ LQGXVWU\ EHFDPH NQRZQ LQ %RQQ RQ WKH GD\ DIWHU WKH DGRSWLRQ RI WKH %RQQ

$JUHHPHQW: YDOXHV RI UHQHZDEOH HQHUJ\ FRPSDQLHV DW 6SDQLVK VWRFN PDUNHWV URVH E\ ILYH SHUFHQW.

7KH VXFFHVV LQ %RQQ, WKHUHIRUH, KDV SDYHG WKH ZD\ IRU WKH UDWLILFDWLRQ RI WKH .\RWR 3URWRFRO E\ WKH (8, (DVWHUQ (XURSH, 5XVVLD DQG KRSHIXOO\ -DSDQ. ,W ZLOO EH RI SDUDPRXQW LPSRUWDQFH WR NHHS WKH LVVXH DV KLJK XS RQ WKH ZRUOG¶V DJHQGD DV LW ZDV LQ WKH ODVW PRQWKV. 1HLWKHU WKH

.\RWR 3URWRFRO QRU WKH %RQQ $JUHHPHQW ZRXOG KDYH EHHQ DGRSWHG ZLWKRXW WKH LQYROYHPHQW RI WKH ZRUOG¶V OHDGHUV DQG ZLWKRXW WKH LPPHQVH PHGLD FRYHUDJH WKLV XVXDOO\ LPSOLHV. ,Q %RQQ, WKH 86 ODUJHO\ IXOILOOHG WKH SURPLVH PDGH E\ *. :. %XVK LQ *RWKHQERUJ: WR UHIUDLQ IURP REVWUXFWLRQ DV PXFK DV SRVVLEOH. 7R EH VXUH, WKH 86¶V LQYLVLEOH KDQG ZDV QRWLFHDEOH RQ YDULRXV RFFDVLRQV, EXW DOO LQ DOO LW ZDV D IDLU JDPH. 7R NHHS LW WKLV ZD\ ZLOO EH GHFLVLYH IRU WKH VXFFHVV RI &23 7.

7KH (XURSHDQ 8QLRQ KDV, IRU WKH ILUVW WLPH, WDNHQ D OHDGHUVKLS SRVLWLRQ RQ D YLWDO JOREDO LVVXH WKDW ZDV GHVHUWHG E\ WKH 8QLWHG 6WDWHV. 3RWHQWLDOO\ HTXDOO\ LPSRUWDQW, WKH DGRSWLRQ RI WKH

%RQQ $JUHHPHQW KDV SURYHQ WKDW PXOWLODWHUDO GLSORPDF\ DFWXDOO\ ZRUNV, DV LQ WKH FDVH RI WKH

/DQGPLQHV 7UHDW\ RU WKH 6WDWXWH RI WKH ,QWHUQDWLRQDO &RXUW RI -XVWLFH. 7KH FOLPDWH QHJRWLDWLRQV LQ %RQQ DQG WKH *8-6XPPLW LQ *HQRD WKXV UHSUHVHQW WZR SRVVLEOH UHVSRQVHV WR D JOREDOLVLQJ ZRUOG ($WKDQDVLRX/%DHU 2001). 7KH ZRUOG WRGD\ LV SUREDEO\ EHVW GHVFULEHG DV D ³XQL- PXOWLSRODU ZRUOG´, DV 6DPXHO +XQWLQJGRQ RQFH UHPDUNHG. ,W LV QRW D XQLSRODU ZRUOG, VLQFH WKH 86 FDQQRW VROYH JOREDO SUREOHPV DORQH, EXW RQ WKH RWKHU KDQG LW LV QRW WUXO\ PXOWLSRODU EHFDXVH WKH ZRUOG QHHGV WKLV VXSHUSRZHU WR VROYH JOREDO SUREOHPV VXFFHVVIXOO\ (+XQWLQJWRQ 1997). %RQQ KDV LQGLFDWHG, KRZHYHU, WKDW WKH ZRUOG DSSHDUV WR EH DW OHDVW DEOH WR VWDUW WDFNOLQJ D JOREDO SUREOHP ZLWKRXW WKH 86. 7KLV WDVWHV OLNH D IDLQW VFHQW RI WKH IXWXUH, D YHU\ VSHFLDO IODYRXU LQGHHG.

5HIHUHQFHV

$WKDQDVLRX, 7. DQG 3. %DHU (2001), µ%RQQ DQG *HQRD: $ 7DOH RI WZR &LWLHV DQG 7ZR 0RYHPHQWV¶, )RUHLJQ 3ROLF\ LQ )RFXV, 'LVFXVVLRQ 3DSHU, $XJXVW 2001.

%URXQV, %. DQG 7. 6DQWDULXV (2001), µ'LH .\RWR-5HGXNWLRQV]LHOH QDFK GHQ %RQQHU

%HVFKOVVHQ¶, (QHUJLHZLUWVFKDIWOLFKH 7DJHVIUDJHQ 51(9), 590-591.

*UXEE, 0., &. 9URROLMN DQG '. %UDFN (1999), 7KH .\RWR 3URWRFRO: D JXLGH DQG DVVHVVPHQW.

/RQGRQ: (DUWKVFDQ/5,$$.

+XQWLQJWRQ, 6.3. (1997), µ7KH (URVLRQ RI $PHULFDQ 1DWLRQDO ,QWHUHVWV¶, )RUHLJQ $IIDLUV 00(0) 0XXXXXXXX/2FWREHU 1997, 28-49.

Xxxxxxx, X. (2001), ‚Democracy or Carbocracy? Intellectual Corruption and the Future of the Climate Debate‘, Corner House Briefing 24, October 2001.

2EHUWKU, 6. DQG +.(. 2WW (1999), 7KH .\RWR 3URWRFRO. ,QWHUQDWLRQDO &OLPDWH 3ROLF\ IRU WKH

21VW &HQWXU\. %HUOLQ: 6SULQJHU 9HUODJ (KWWS://ZZZ.N\XXXXXXXXXXX.XX; DOVR DYDLODEOH LQ *HUPDQ DQG -DSDQHVH).

2WW, +.(. (2001), µ&OLPDWH &KDQJH ± DQ ,PSRUWDQW )RUHLJQ 3ROLF\ ,VVXH¶, ,QWHUQDWLRQDO $IIDLUV

77(2), 277-296;(DOVR DYDLODEOH DW KWWS://ZZZ.ZXSSHULQVW.RUJ/&236/LQGH[.KWPO).

'U. +HUPDQQ (. 2WW 'LUHFWRU

&OLPDWH 3ROLF\ 'LYLVLRQ

:XSSHUWDO ,QVWLWXWH IRU &OLPDWH, (QYLURQPHQW DQG (QHUJ\ 'RHSSHUVEHUJ 19

'-42103 :XSSHUWDO 7HO. ◆00-000-0000000

)D[:◆00-000-0000000 KHUPDQQ.RWW#ZXSSHULQVW.RUJ

2 7KH RIILFLDO GRFXPHQWV DUH DYDLODEOH IURP WKH ZHEVLWH RI WKH 81)&&& 6HFUHWDULDW DW KWWS://XXX.XXXXXX.XX. )RU RWKHU DFFRXQWV VHH $WKDQDVLRX/%DHU 2001; /RKPDQQ 2001, %URXQV/6DQWDULXV 2001.