(0) The use of renewable natural resources which are in direct competition with synthetic substitutes should be promoted, inter alia, through the work of the UNCTAD Permanent Group on Synthetics and Substitutes in order to permit increased production and industrial processing in developing countries; (p) A growing share of the world's research expenditure should be directed to the development of appropriate technology of direct benefit to developing countries.

IV. The least developed, landlocked and island developing countries 62. The least developed, landlocked and island developing countries present a set of problems which require special measures if these countries are to attain an acceptable level of economic development. Recalling General Assembly Resolutions 3201 (S-VI) and 3202 (S-VI) on the Declaration and Program of Action on the Establishment of a New International Economic Order, industrialization in these countries must take place at a more rapid pace than average. Concerted action and special measures of assistance from other countries and international organizations are necessary to mobilize a greater volume of resources to make possible the launching of innovative projects in these countries, and the laying of a sound basis for the promotion of their industrialization through projects and measures such as:

(a) Specific, urgent measures to establish the necessary conditions for industrialization: infrastructures, inventories of natural resources, and the technical and financial assistance required for the exploitation of these

resources;

(b) The establishment and financing of complete industrial estates and pilot plants based as much as possible on the use of available local resources;

(c) The creation of integrated production units such as agricultural machinery plants, appropriate engineering industries, and repair and maintenance services;

(d) The implementation of an appropriate agrarian policy as an essential basis for the promotion of integrated rural development schemes involving the establishment of small-scale production units to meet both the needs of internal markets and export requirements;

(e) The development of crafts and cottage industries including artistic crafts; (f) Assistance for systematic studies of their industrialization potential; (g) Speedy examination and establishment of infrastructures permitting the harnessing and full utilization of water resources and the establishment of agro-industries with special emphasis on the countries affected by drought;

(h) Preferential treatment within the context of international agreements for industrial products and processed commodities from these countries as well as the setting up of joint enterprises under regional cooperation;

(i) Special aid and assistance to the least developed, landlocked and island developing countries in the establishment and development of adequate means of transport and communications;

(j) Urgent measures to increase the import and export capabilities of the least developed countries and to help offset the disadvantages of the adverse geographic situation of the landlocked countries, particularly with regard to their additional transportation and transit costs;

(k) In addition to priority assistance from UNIDO and other international organizations in all fields, additional favorable financial and technical assistance with exemption from counterpart requirements, where appropriate, should be given to these countries through bilateral and multilateral channels to accelerate their industrialization in conformity with their national policies and development plans.

V. Institutional arrangements

63. The new distribution of industrial activities envisaged in a New International Economic Order must make it possible for all developing countries to industrialize and to obtain an efficient instrument within the United Nations system to fulfill their aspirations.

64. Industrialization must be pursued in such a way as to promote the global harmonious development of the countries of the international community. 65. (a) The report of the Ad Hoc Committee on Long-Range Strategy for UNIDO, the resolutions of the sixth special session of the General Assembly,

and the present Declaration and Plan of Action shall form the basis determining the role and activities of UNIDO;

(b) UNIDO should play a central role in the implementation of the Declaration and Plan of Action, by initiating and coordinating activities within the United Nations system aimed at achieving the objectives contained therein, as far as they fall within the competence of UNIDO. Further, UNIDO has a crucial role in the implementation of the Declaration and Program of Action on the Establishment of a New International Economic Order, adopted at the sixth special session of the General Assembly, insofar as they relate to industrial development. To this end, the scope and functions of UNIDO need to be extended and its organizational machinery strengthened.

66. In order to attain the above objectives, UNIDO should not only intensify and expand its present operational activities and action-oriented studies and research programs in the field of industrial development but should include among its activities a system of continuing consultations at global, regional and sectoral levels, for the purposes set forth in paragraph 61(d) above. UNDIO should be prepared to serve as a forum for negotiation of agreements in the field of industry between developed and developing countries and 'among developing countries themselves at the request of the countries concerned.

67. In order to give concrete content to the process of industrialization in the developing countries, studies must be undertaken and specific measures formulated in different sectors of industry, special attention being given to priority sectors. Such an approach needs to be reflected in the organizational structure of the UNIDO Secretariat, in the committees of the Industrial Development Board which may be established for the purpose, and in the review at ministerial level at the General Conference to be established for the purpose, on a permanent basis.

68. In order that it may intensify and extend its activities in the manner indicated above and play the central coordinating role in the field of industrial development within the United Nations system, and in order to increase its ability to render assistance to the developing countries in the most efficient way, it is essential that UNIDO's autonomy and functions should be increased and expanded substantially and that UNIDO should be provided with the resources for this purpose.

69. For this purpose, it is recommended to the General Assembly of the United Nations that UNIDO should be converted into a specialized agency. To this end, the Secretary-General of the United Nations, in consultation with the Executive Director of UNIDO, is requested to submit to the seventh special session of the General Assembly, through the Economic and Social Council, draft statutes of a specialized agency for industrial development.

70. In the event that the General Assembly of the United Nations at its seventh special session should decide to transform UNIDO into a specialized agency, draft statutes of that agency should, inter alia, include: (a) Industrial Development Board

(i) Functions

In addition to the functions stipulated in General Assembly Resolution 2152 (XXI) of November 17, 1966, the Industrial Development Board should be responsible for the implementation of the decisions of the General Conference and examine and approve the program and budget of UNIDO;

(ii) Membership

The representation of the developing countries on the Industrial
Development Board should be increased;

(iii) Subsidiary organs

To assist the Board in the examination of the biennial program and budget of UNIDO and other financial matters pertaining to UNIDO, a Program and Budget Committee may be established. Other technical committees may also be established by the Board if it considers this necessary;

(b) Secretariat

The number of officials from developing countries at professional and higher levels in the Secretariat of UNIDO and in the panels of consultants that

advise the Secretariat should be increased within the desirable range of equitable geographical distribution to be established by the Industrial Development Board, with due regard to the need for ensuring the highest standards of efficiency, competence and integrity;

(c) General Conference

In order to allow for periodic global consultations at a high level on international cooperation for the industrial development of developing countries and other aspects of world industry, the General Conference of UNIDO should be institutionalized. The General Conference should be convened every four years, and each session of the Conference should decide on the date and venue of the next session. The functions of the General Conference should be, inter alia:

(i) To review progress in the implementation of the present Declaration
and Plan of Action;

(ii) To examine ways and means of increasing the share of the develop-
ing countries in world industrial output;
(iii) To recommend policies and procedures to member governments to
facilitate cooperation among nations in matters relating to indus-
trial development for the benefit of the developing countries;
(iv) To serve as a coordinating mechanism to provide overall integrated
and continuing attention for the successful coordination and fol-
lowup of policies concerning industrial production, industrial cooper-
ation among developing countries and other related matters by all
the agencies of the United Nations family;

(v) To review major problems and policy issues affecting the world
industrial situation and the steps being proposed to resolve them by
governments, UNIDO, the regional economic commissions, etc.;
(vi) To receive reports and maintain contacts concerning the above
functions through the UNIDO Secretariat;

(vii) To review the effectiveness of UNIDO's institutional arrangements and take appropriate decisions on further strengthening the institutional machinery.

71. Pending the conversion of UNIDO into a specialized agency coming into effect, the Secretary-General of the United Nations and the Executive Director of UNIDO are requested to work out interim arrangements regarding greater autonomy of UNIDO. The Executive Director is requested to report to the Industrial Development Board on such arrangements.

Industrial Development Fund

72. The establishment of an Industrial Development Fund is crucial to both increasing the resources of UNIDO and enhancing its autonomy and ability to meet, promptly and flexibly, the needs of developing countries. The Fund should be established through voluntary contributions to UNIDO and existing voluntary funds under UNIDO's authority would be consolidated as part of the new Fund. The terms of reference and the rules for the functioning and administration of the Fund shall be established by the Industrial Development Board taking full account of the Report of the Secretary-General of the United Nations as contained in document A/9792. They should provide for sufficient flexibility so as to increase the possibility of obtaining further voluntary contributions. 73. In particular, the Industrial Development Fund should enable UNIDO to: (i) Participate in the implementation of the Declaration and Program of Action on the Establishment of a New International Economic Order, adopted at the sixth special session of the General Assembly, insofar as they relate to industrial development; (ii) Implement the recommendations of the Ad Hoc Committee on LongRange Strategy for UNIDO;

(iii) Implement field projects, particularly those of nontraditional nature, with special attention to the needs of the least developed among the developing countries, landlocked countries and the island developing countries;

(iv) Intensify its activities in the development and transfer of technol

ogy;

(v) Intensify its programs aimed at establishing and/or intensifying cooperation among developing countries and between developing and developed countries;

(vi) Strengthen its promotional activities.

Relationships with the organizations of the United Nations System

74. UNIDO should have the primary responsibility as executing agency in the field of industrial development. To this end, UNIDO should hold consultations with UNDP with the specific objective of ensuring that it receives the major share of UNDP projects in the field of industry, in accordance with the central role of UNIDO in this field.

75. In order that UNIDO should be able to fulfill effectively its central coordinating role in the field of industrial development, especially with respect to the implementation of the Program of Action on the Establishment of a New International Economic Order, UNIDO should hold consultations with the United Nations and with the specialized agencies and other organizations related to industrial development. For this purpose an advisory committee should be established composed of representatives of the secretariats of the United Nations and of the relevant organizations of the United Nations system and chaired by UNIDO.

VI. The Charter of the Economic Rights and Duties of States

76. The countries gathered here stress the need for the international community to comply in full with the precepts contained in the Charter of Economic Rights and Duties of States, so that it will become an effective instrument for establishing a new system of international economic relations based on equity, equality, sovereignty and the interdependence of the interests of the developed and the developing countries.

U.N. Doc. ID/B/155/Add. 1, Apr. 14, 1975.

In rollcall votes the United States voted against pars. 19, 32, 33, and 47 of the Declaration, and subpars. 59(j), 60(e) and (f), and par. 76 of the Plan of Action. It abstained on subpar. 59(i) of the Declaration and 61(e) of the Plan of Action. The United States also filed reservations with respect to pars. 5, 9, 10, 11, 13, 14, 16, 17, 18, 25, 26, 40, 42, 46, 48, and 53 of the Declaration, and subpars. 59(d), (g), and (h), 60(h), 61(d), and pars. 62, 63, 69, and subpar. 73(iii) of the Plan of Action. The following are excerpts from the U.S. explanations of vote and observations subsequently filed:

The United States has indicated its position on the Declaration and Plan of Action by its individual votes on ten paragraphs and by its negative vote on the document as a whole. We regret the situation which we considered required our negative vote on the Declaration and Plan of Action because we believe that matters important to the industrial development of developing countries have been considered at the Lima Conference and are addressed in this document. The Group of 77 considered it necessary to have included in the document statements of what it regarded as fundamental principles about which it was unwilling to negotiate. The United States also considers certain principles as fundamental and, in most of the paragraphs on which we voted, we found that our fundamental principles were being impinged upon by language advocated by the Group of 77.

... It should be noted that this discussion of paragraphs to which we have objected is not intended to be exhaustive. Our reservations are to the paragraphs indicated . . ., but those reservations extend to the whole tone of this document.

... we remain hopeful that a positive and forward-looking dialogue can be established in the United Nations with respect to the manifold and complex issues of development.

. . . In a number of . . . paragraphs of the document we found that the text reflected judgments of the actions of ourselves and others which we could not accept or contained critical or recriminatory comments which we believed it necessary to reject; others involved assumptions which in our view were questionable. . .

The Declaration and Plan of Action contain a number of references to the Declaration and Program of Action of the sixth special session of the General Assembly (paragraphs 5, 25, 40, 60(h)), on which the United States made a number of specific reservations as well as a general reservation. We continue to be unable to regard those documents as carrying the force and authority of fundamental principles as claimed by the developing countries. Furthermore, with respect to the use of the term "a new international economic order," we do not consider such an order to be defined by the sixth special session Declaration and Program of Action. Rather, in our agreement to the term's use, it reflects general objectives for expansion and improvement of international economic relations conducive to the economic advancement and development of all nations with particular emphasis on the needs of the developing countries.

In contrast to the negative comments upon the actions of markets in this document (pars. 10 and 42), the United States believes that markets perform important allocation functions more efficiently throughout an economy in most instances than do centralized decisionmaking mechanisms. A well-regulated market can make an important positive contribution to development.

. . . For similar reasons we believe that private firms and transnational enterprises can play important roles in the industrialization process. Regulation of such enterprises by host developing countries is reasonable and necessary. We believe, however, that in such regulation the emphasis in developing countries should be placed on supervision rather than control of transnational enterprises in order to encourage and stimulate their contributions to industrial development objectives rather than limit their effective

ness....

We would note in passing that no indexation link between the prices of imports and exports of developing countries as has been suggested in this document (par. 19) is practically feasible or necessarily more just than the relationship established by the market system, considering the constantly changing nature of economic relationships through change in available resources, technology, etc.

One of the major questions dealt with in this document is that of permanent sovereignty over natural resources (par. 32). The United States of course supports that sovereignty and its exercise as appropriate, but the right of sovereignty over natural resources is no more absolute than any other right. It must take account of other rights; and, in particular, it must be exercised in accordance with a state's international obligations. Such a balanced approach was set forth in General Assembly Resolution 1803 (XVII). However, certain resolutions adopted more recently lack this critical balance. Accordingly, the United States could not support those resolutions. It likewise cannot lend its support to this Declaration insofar as it purports to affirm rights in derogation of international law, or fails to specify that the exercise of permanent sovereignty and allied rights, such as that of nationalization, must be in accordance with a state's international obligations. . .

... It may also be useful to restate the position of the United States on the Charter of Economic Rights and Duties of States. The United States felt constrained to vote against the Charter when it was brought to a vote at the twenty-ninth session of the General Assembly. The United States voted against the Charter not because it opposed the principle of a charter or much of the content of the Charter that was voted upon. On the contrary, it supported, and supports, the principle of a charter and voted in favor of most of the Charter's articles. Those articles were the result of a process of extensive and intensive negotiation in which the United States participated fully.

However, in the view of the United States, the Charter as adopted contains