The Basel Ban Amendment: The First Step Toward Environmentally Sound Management of Hazardous Wastes

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Prepared by the Basel Action Network (BAN) for the 16th Session of the Technical Working Group and 1st Session of the Legal Working Group of the Basel Convention

Geneva, Switzerland / 3-9 April 2000


The most notable achievement of the first decade of the Basel Convention has been the fulfillment of the Basel Ban Amendment and the related elaboration of the hazardous waste definitions created to enhance its implementation. As the Basel Convention moves into its second decade, there is now much discussion about making "environmentally sound management" (ESM) the centerpiece of the Convention. Indeed, the Fifth Conference of the Party adopted a Ministerial Declaration asserting a vision of ESM with an emphasis on waste minimization being available for all. Both of these Basel goals -- the Basel Ban and ESM, are laudable and essential. Indeed they are really one and the same. That is, the Basel Ban must be seen as the first and crucial step toward achieving ESM.

Unfortunately however, some have tried to characterize the Basel Ban and the achievement of ESM as somehow fundamentally different. For example in a recent (October 1999) OECD workshop held in Cancun, Mexico on ESM of wastes destined for recycling operations, NGOs were told by the organizers that it was inappropriate to discuss the Basel Ban, or waste prevention because the workshop was about ESM.

This idea that ESM does not include concepts of waste prevention and that the Basel Ban is not a clear implementation of such preventative steps within ESM is, in our view, a dangerous and mistaken one. Also dangerous, if we are serious about ESM, is any notion of putting the Basel Ban Amendment "behind us" or that the need for it is somehow diminished just 6 years after it was conceived. These notions are mistaken, for ESM will not be achieved until and unless the Basel Ban Amendment enters into force, and is implemented on a daily basis.

While the Basel Ban remains contentious among a small minority of countries which wish to retain a free trade in hazardous wastes, it remains the world=s most significant achievement to date for both human rights and the environment -- preventing both a poisoning of North-South, West-East relations as well as preventing the actual poisoning of humans and the environment from such wastes. But the entire effort of the first decade and the efforts for ESM in the second will all be for nothing if the strict, no-exceptions ban does not a) enter into force; b) become implemented; and c) remain unweakened or diluted from its original intent to reduce waste trafficking especially for economic reasons.

For those that still might doubt the importance of the Basel Ban as a major step in the implementation of ESM we have written this paper. In it we make the case that while it is well known that ESM has always been the basis for adopting the Basel Ban, too often the actual rationale for this basis has been misrepresented.

We find that ban opponents, continue to mis-characterize ESM as being simply a matter of downstream responsibility of potential waste recipient countries. We find this interpretation one-sided, dangerous and in contradiction to the objectives of the Basel Convention. Rather we submit that ESM is primarily the upstream responsibility of the waste generating state, in its fulfillment of the basic obligations of the Convention.

We look forward to a second decade of the Basel Convention where all Parties ratify and maintain a strong undiluted ban which forces responsibility to avoid the transboundary movement of hazardous wastes, where Parties agree to become self-sufficient in waste management through waste minimization, and proceed apace with capacity building to ensure that hazardous waste minimization is truly the emphasis within individual countries.

The Rationale for The Basel Ban Amendment (Decision III/1)

The Basis of the Ban

Decision III/1 is based on the following stated justification:

"Recognizing that transboundary movements of hazardous wastes, especially to developing countries, have a high risk of not constituting an environmentally sound management of hazardous wastes as required by this Convention."

On the basis of the statement above, the Parties took the decision to ban exports from Annex VII countries (OECD countries, EU countries and Liechtenstein) to non-Annex VII countries. There are three elements to the text found in III/1 that are of vital importance:

First, it is stated that it is the"transboundary movement" (or trade) in hazardous waste which is seen as having the "high risk" (not just disposal or recycling) with respect to ESM. "Transboundary movement" implies obligations and characteristics of all "states concerned," and in particular those of the exporting state initiating the transboundary movement, and certainly, not just those of the importing, or disposing state. Thus it is not just the"technical capacity" of the receiving state which is at issue with respect to ESM.

Second, such trade is seen as having a high risk of being in conflict with the Convention and thus the consequent action taken to remedy this problem was to ban the export from Annex VII countries to non-Annex VII countries. The fact that the Parties did not see fit to likewise ban the export of hazardous wastes from non-Annex VII countries to non-Annex VII countries illustrates that the concern being addressed for the most part had to do with more than just the "technical or other capacity" of non-Annex VII countries to manage hazardous wastes in an environmentally sound manner.

Rather it had to do with something inherently harmful to ESM when an Annex VII country exports its waste to a non-Annex VII country. It had to do with responsibilities, obligations and characteristics of Annex VII countries vis a vis non-Annex VII countries, much more than it had to do with capacity of non-Annex VII countries alone.

Finally, it must be realized that the primary problem identified was the "high risk" of such Annex VII to non-Annex VII trade not constituting ESM. Environmentally Sound Management is defined in the Convention as:

"taking all practicable steps to ensure that hazardous wastes or other wastes are managed in a manner which will protect human health and the environment against the adverse effects which may result from such wastes."

What does "taking all practicable steps" really mean?

Environmentally Sound Management -- Taking all Practicable Steps

Surely, at a minimum, "taking all practicable steps" on the part of the Annex VII "state of export" to which the ban is meant to apply, must include, at a minimum, adhering to the general obligations of the Convention found in Article 4. If these steps were not practicable and essential would they have been considered as obligations for all of the Parties? And, as we shall see, in the case of Annex VII exporting countries the case for upholding these Basel obligations is even more clear and compelling. These fundamental practicable obligations include:

The obligation to reduce waste generation:

"Each Party shall take the appropriate measures to ensure that the generation of hazardous wastes and other wastes within it is reduced to a minimum, taking into account social, technological and economic aspects;" (Article 4, paragraph 2, (a))

It is clear and irrefutable that export of hazardous wastes from higher cost waste disposal facilities to lower cost facilities, which is almost always the case in the Annex VII to non-Annex VII waste trade subject of the ban, acts as a powerful and damaging disincentive to cost internalization and the realization of waste reduction at the source. This fact was highlighted in a recent OECD study on the Basel Convention:

"By raising the costs of disposing of wastes, firms face an incentive to produce less wastes, or produce wastes that are less hazardous to handle, through cleaner production processes for example. The same logic can be extended to restrictions on transfrontier waste movements: restricting access to one more of the alternative disposal options increases the pressure for waste generation in industrialized countries to be minimized at its source."

Thus, waste reduction on the part of Annex VII countries, a fundamental obligation and indeed a "practicable step" for ESM, is much less likely to occur without the Basel Ban. Further, we would argue that it is the Annex VII countries, by virtue of their economic stature and high levels of waste generation that have the greatest responsibility for moving rapidly on the path of hazardous waste reduction.

Indeed, the recent COP5 Ministerial Declaration on Environmentally Sound Management reaffirmed the most important aspect of ESM as being waste minimization when it stated,"We the Ministers...

Assert a vision that the environmentally sound management of hazardous and other wastes is accessible to all Parties, emphasizing the minimization of such wastes and the strengthening of capacity-building."

Without first closing the escape route of economically motivated waste "dumping," we will not achieve waste minimization, and thus we will not achieve ESM for all.

The obligation for self-sufficiency in waste management:

"Each Party shall take the appropriate measures to ensure the availability of adequate disposal facilities, for the environmentally sound management of hazardous wastes, that shall be located, to the extent possible, within it, whatever the place of their disposal." (Article 4, paragraph 2, (b)).

This obligation for self-sufficiency is a practicable step that all countries are obligated to achieve. While the phrase "to the extent possible" is a particularly strong one, and does not specify exceptions based on economics, it is clear that the Annex VII countries will be best placed to fulfil this obligation by virtue of their relative wealth and longer experience with toxic wastes. When an Annex VII country exports hazardous wastes for disposal (including recycling) to a non-Annex VII country they are almost assuredly in violation of this obligation as they have not taken this obvious and required"practicable step" of dealing with wastes at source -- at home.

It might be noted here that the so-called "proximity principle" which has been most evident in European Union law, does not exist in any form in the Basel Convention. Thus its framers believed most strongly in the idea of national policies of keeping wastes within the confines of national borders, relegating any notion of the "proximity principle" to non-transboundary waste movement.

Furthermore, as it is highly unlikely that an "adequate" technology exists in a non-Annex VII country that cannot also exist in the Annex VII country of export, or within its political/economic integration organization (ie. the European Union), the idea of Annex VII to non-Annex VII trade is almost assuredly contrary to the concepts of "all practicable steps" and thus ESM.

The obligation for reducing transboundary movements:

"Each Party shall take the appropriate measures to ensure that the transboundary movement of hazardous wastes and other wastes is reduced to a minimum consistent with the environmentally sound and efficient management of such wastes, and is conducted in a manner which will protect human health and the environment against the adverse effects which may result from that movement." (Article 4, paragraph 2, (d))

While some have argued that the Basel Ban might reduce some transboundary movements while prompting an increase in others, there is no evidence to back up any claim that the ban will result in a net increase in transboundary movements -- indeed there is a mountain of common sense that would refute it.

Almost all of the hazardous waste trade witnessed prior to the widespread adoption of national, regional bans, as well as the Basel Ban was either from OECD to OECD or from OECD to non-OECD countries. Eliminating the lions share of the obvious, economically motivated trade is almost assuredly going to reduce the overall potential or actual hazardous waste trade. There is much less likely a motivation to send OECD wastes to OECD countries when the clear economic incentive to export to non-OECD is closed down. This is particularly the case when a country must fulfill the obligation to become self-sufficient in hazardous waste management as required in Article 4, paragraph 2 (b), rather than simply redirect waste trade.

Indeed it can be said that the Basel Ban has already caused a tremendous reduction in waste trade before even entering into force. Compared to the years from 1988 to 1992, the years since that time have seen much less wastes moving from OECD to non-OECD countries.

In any case, the obligation to minimize transboundary movements is incumbent on all parties (Annex VII and non-Annex VII). Individual states are still obliged under the Convention to reduce their individual transboundary movements to a minimum. When an Annex VII country exports its hazardous waste to a non-Annex VII country, they have indeed increased the transboundary movements of hazardous waste by each such movement. Thus, unless this movement could simply not be avoided, they have failed to take the practicable step of reducing such movements to a minimum.

Its About Annex VII Country Responsibility

Thus, it is clear that even before ban detractors can approach the question of whether or not the actual disposal (including recycling) of hazardous waste in the importing non-Annex VII country might be ESM or not -- which is the only issue many currently choose to discuss, they are obliged first to satisfy the three fundamental obligations and "practicable steps" noted above. These are steps that Annex VII countries must take and which in almost every case Annex VII countries will not be taking if they are engaged in Annex VII to non-Annex VII waste trade.

In this light the fundamental basis for the Basel Ban becomes very clear. Before the question even arises about various disposal technologies employed, standards, or so called scientific or technical criteria or conditions in the non-Annex VII importing country, the obligations already placed upon the Annex VII exporting countries make it obvious why "transboundary movements of hazardous wastes, especially to developing countries, have a high risk of not constituting environmentally sound management."

The small minority of countries that are working to undo the Basel Ban Amendment or weaken it by allowing the expansion of Annex VII on the basis of such "technical criteria" overlook these fundamental requirements of the Convention which most certainly must be considered as "practicable steps" to ESM. These countries (such as Canada, USA, and Australia) seek to ignore their own obligations and responsibility as envisaged in the Convention and the ban and instead try to focus our attention on the capabilities of non-Annex VII importing countries to manage hazardous wastes.

Such a move is cynical and self-serving in that it makes it appear that the waste crisis is the fault of non-Annex VII countries for their failure to possess "end-of-pipe" treatment such as recycling technologies to deal with wastes not of their making. Rather the waste crisis is primarily a problem caused by those generating the waste in the first place who fail to reduce it at source through the use of clean production methods as the Convention envisages. If anything is to be exported, it should be the methodologies to minimize waste at source.

Technical, and other Capacity of non-Annex VII Countries

As we have seen, with respect to the rationale for the Basel Ban, ESM has far more to do with the responsibilities of exporting states to uphold fundamental principles of waste management, than it has to do with the inability of potentially importing countries to manage hazardous wastes. For even if all countries of the world had identical technologies, the principles of self-sufficiency, waste prevention at source, and minimizing transboundary movements of hazardous waste remain ever valid and essential principles for reducing risk and pollution. The ban simply prescribes a remedy for those waste flows most likely to flow for economic reasons in abuse of the obligations and principles outlined above. The ban also prevents abuses of the Polluter Pays Principle.

While it is almost certain that technical and infra-structural capacity of non-Annex VII countries is less likely to be as advanced as in Annex VII countries and for that additional reason the export of such wastes to non-Annex VII countries cannot be seen as having taken "all practicable steps to ensure that hazardous wastes or other wastes are managed in a manner which will protect human health and the environment against the adverse effects which may result from such wastes," this fact is really secondary to the obligations placed upon exporting countries which must be viewed as requisite "practicable steps."

Hazardous Waste Recycling -- A Closer Look

Dumping by Another Name

Even if we were to accept the false premise that it is environmentally sound to even begin an export of hazardous waste from Annex VII to non-Annex VII countries for purposes of recycling rather than promoting upstream prevention methods as the most important aspects of ESM, we run into an ugly brick wall of reality with respect to hazardous waste recycling technologies. An examination of such technologies around the world reveal them to be some of the dirtiest, most polluting enterprises in the history of industrialization. This fact has been somewhat ignored by virtue of the positive connotations of the word "recycling".

However, the pretty mask provided by this word falls quickly upon real examination. Even overlooking the numerous incidents of fraudulent or "sham" recycling that have been documented to date, we find that hazardous waste recycling is rarely environmentally sound, but is highly polluting, often causing equal or worse damage to the populace and environment than final disposal.

Two quick facts illustrate that even in OECD countries such as the United States, hazardous waste recycling is extremely dangerous and has a continuing history of very serious and costly contamination:

  • Of the 1194 toxic waste sites listed in the US Superfund legislation's National Priority List of worst toxic sites in the USA as of 29 September 1998, 133 of these, or over 11%, were formerly or currently hazardous waste recycling facilities.
  • The Inventory of Sources of Dioxin in the United States, External Review Draft cites secondary smelting of ferrous and non-ferrous metals and waste-to-energy incineration operations as a major source of dioxin and furans.

In non-OECD countries of course the risk is exacerbated to extremes by the lack of resources and infrastructure to contain the contamination known to occur at such sites let alone clean it up as is done under the Superfund legislation.. Greenpeace and BAN have yet to document a single hazardous waste recycling facility in a non-OECD country that does not cause serious pollution.

Another fact repeatedly overlooked is that hazardous waste recycling always involve some degree of final disposal. And yet there is no dispute among any of the Parties of the Basel Convention that exports of hazardous waste for final disposal to non-OECD countries are to be eliminated. Thus it must follow that exports of hazardous waste for recycling from Annex VII to non-Annex VII countries must likewise be eliminated due to the fact that they leave toxic residues for final disposal behind. According to the OECD Basel study:

" should be noted with regard to certain ashes and residues, e.g. filter dust ....that the recycling process for such hazardous wastes, in reality often leaves a considerable waste landfill problem, as only 10-20% can typically be extracted from this dust. The remaining 80-90 % which often continues to contain such large amounts of environmentally hazardous substances that it must be considered a hazardous waste, will in practice be placed in landfills in the importing country."

Economic Costs of Recycling are Externalized

It is always more costly to attempt to clean-up pollution after it occurs than to prevent it. Yet a full costing analysis which internalizes all costs of the hazardous waste recycling trade has never been undertaken. Instead, we are just asked to take it on faith that recycling of hazardous waste is good for the economy and the environment. However, once a full cost assessment of externalized costs such as ecosystem clean-up and restoration and medical costs, not to mention loss of life, is undertaken and factored in economically, it will be clear that the costs from the transfer of pollution via recycling, far exceed, in the long term, any benefits gained by the waste recipient, in terms of profits or resources, in the short term. This is especially true with respect to hazardous waste recycling which often deals with very small profit margins. Once the true costs of importing hazardous wastes are internalized, the profits to be gained by it disappear almost immediately.

Hazardous Waste Recycling is a Disincentive to Development of Non-toxic Alternatives

Finally, and most importantly, hazardous waste recycling is yet another end-of-pipe technology which serves as a disincentive for preventing hazardous waste at source such as by utilizing non-toxic inputs and clean production methods. Hazardous waste recycling thus forestalls real solutions to the toxic crisis such as substituting toxic products with less toxic or non-toxic alternatives.

In the case of transboundary movements covered under the Basel Ban, this pipeline begins in Annex VII countries and ends in non-Annex VII countries. Such a steep economic gradient represented by these country groups equates to very serious economic disincentives to achieving waste prevention. And waste prevention has long been recognized as not only an obligation of the Convention but is the prime objective of all concepts of ESM.

The Rationale for the OECD Distinction within the Basel Ban

Upstream Responsibility and Capability

There is no mystery in determining the latest method by which ban opponent countries wish to undermine and unravel the Basel Ban. Their latest tactic which holds the most promise for them is to allow for expansion of Annex VII beyond the OECD group. They know full well that once the OECD distinction is erased then the ban will also be erased. There are two compelling reasons why the decision by the Parties to distinguish OECD countries from non-OECD countries as a basis for the ban is sound and consistent with the aims of the Convention:

The OECD group is disproportionately responsible for a global problem (hazardous waste generation) and possesses a disproportionate capability (wealth) to solve that problem at home as required by the Basel Convention (Article 4, para. 2, (a)(b)and (d)). The OECD, is a legally bound set of nations whose membership is not self-elective but based on economic, and infra-structural criteria. The rigidity and economic basis of OECD membership provides an enforceable safeguard against an elective regime where countries, on the basis of unenforceable criteria, can opt in or out of the ban.. An "opt-out" ban is not a ban at all. The OECD/non-OECD divider while imperfect, does address the worst abuses of dumping for profit and at the same time serves as a self-enforcing mechanism to prevent the return to the failed elective system of "prior informed consent". If, non-OECD countries are allowed (or are pressured into) joining Annex VII , once again they will become the potential target for economically motivated waste dumping and in the process, OECD countries will be able to avoid their special responsibility to fulfil ESM obligations under the Convention.

But What About a Non-OECD Country that Might Want to Import Hazardous Waste?

While the most significant onus of the Basel Ban rests with exporters of hazardous waste, the ban also prescribes obligations on non-Annex VII countries to adhere to its original intent. Just because a national government indicates a willingness to opt-out of the ban does not mean they should be allowed to do so. Opt-out possibilities were repeatedly rejected during ban negotiations at both COP 2, 3 and 4. Indeed notions of opting out, would absolutely undermine the purpose of the ban.

Annex VII was never envisaged as a"waste traders' club," but rather as a group of countries which must curtail their waste trade activities in accordance with the Convention. As the Convention requires minimizing trade in hazardous wastes, the notion of joining Annex VII for the purposes of engaging in waste trade rather than minimizing it, would be in bad faith and contrary to the notions of the Convention and the ban. All future proposals to join Annex VII might be judged on this criteria. That is, are the proponent's motivations for entering Annex VII for the purpose of engaging in waste trade or are they joining in order to minimize it. If the motivation is the former then such requests must be denied.

Arguments have been posed by industrial sectors within certain non-OECD countries such as the secondary lead industry claiming that in order for some non-OECD countries to obtain enough lead for domestic lead uses such as car batteries, they need to be able to import such used batteries from OECD countries. One such claim involving an UNCTAD study of the Philippines, reveals the argument as largely bankrupt as the facility in question (PRI) profits largely from exporting batteries, and is concerned with far more than simply satisfying domestic supply of lead.

It is important to note that these studies are invariably funded by industry associations wishing to maintain the status quo of a free trade in hazardous wastes as they were profiting by importing or exporting such wastes. While case studies have been proffered which purport that disallowing the opportunity to import lead wastes, will lead to the use of more primary lead sources which will ultimately hurt the environment, the real arguments upon close examination almost invariably boil down to the fact that it is often more profitable to import boatloads of used lead-acid batteries from developed countries rather than to aggressively pursue domestic collection and recovery of lead sources unaffected by the ban.

In fact, when the ability to import lead is diminished, the recovery rates of domestic lead will rise dramatically. This scenario of enhanced collection is provided impetus by the ban and would certainly result in a positive impact on the environment until real solutions to lead dependency can be found.

These arguments also conveniently ignore the fact that lead ingots available on the international market are indistinguishable by source. In other words, it is often impossible to determine that the lead being purchased is secondary or primary. These arguments also ignore the fact that scrap lead in solid form, pre-extracted from the battery and in a cleaned condition is not considered to be under the scope of the Basel Convention and is thus available on the free market from any source.

Another argument used frequently in the case of lead waste imports justifies such trade in terms of "capacities of scale", claiming that without imports it is not economical to maintain a viable domestic recycling industry so therefore lead will be dumped leading to greater harm to the environment. These arguments not only assume that government will not be required to subsidize lower capacities of lead recycling to ensure environmental protection. They also fail to consider possibilities of enhanced regional collection in non-OECD countries, increases in domestic collection and recovery rates that are enhanced due to the demand created by the Basel Ban, and finally the fact that technologies for smaller, safer, and economical lead recycling units are now available.

Certainly all of the economic argumentation being used overlooks the externalized costs of the imported lead to the environment and public health of the recipient country. Such arguments at the outset fail to consider the environmental costs of lead contamination resulting from increased processing of lead (externalized costs).

Finally, these arguments overlook the fundamental principle of the Basel Ban explained above -- that the Basel Ban exists in large part to provide incentives to prevent waste generation by closing the loopholes of economically motivated export. Hazardous waste exports for recycling allow rich countries to externalize their production costs via export of hazards to weaker economies. The fact that lead ingots will usually be more expensive for developing countries than from buying used lead-acid batteries is reflective of the costs of mitigating the dangerous impacts of recycling -- pollution and dangerous exposures to workers. Once these costs are internalized, there will be greater incentive to truly solve the problem globally by developing less toxic alternatives such as lead-free car batteries.


In sum, the complaints about the Basel Ban heard to date fail to look at the larger picture of solving the international hazardous waste crisis. Rather they fixate on short-term interruptions in certain existent business practices. Such interruptions can be expected whenever one attempts to change the status quo as the Basel Convention has done by adopting the Basel Ban. But in the longer term, the Basel Convention's obligations to reduce the transboundary movement of hazardous waste and its generation to a minimum, and for states to move toward national self-sufficiency in hazardous waste management, will make for a more economically efficient, cleaner, and safer world. As we have demonstrated, the Basel Ban is a logical extension of these Convention obligations. This is why the Parties saw fit to included it as an obligation via amendment.

Indeed the Basel Ban provides vital implementation of the Basel Convention and in particular its requirement for ESM. ESM is most effectively addressed"upstream" at the source of the waste (potentially exporting countries) and not "downstream" at (potentially importing and disposing countries). The Basel Ban, by placing an onus on those countries which produce the vast majority of hazardous wastes and possess the capacity to implement self-sufficiency, promotes the fundamental priority of ESM -- hazardous waste prevention. Without the Basel Ban, ESM can be avoided by externalizing environmental costs to weaker economies.

In the current climate of trade liberalization the Basel Ban is essential to prevent the great ESM "escape" that economically motivated waste trade represents. Until all nations cease to use waste trade as a means to gain economic advantage, instead of striving to become self-sufficient in hazardous waste management, it will be very dangerous and misguided to de-link ESM and the Basel Ban. For the foreseeable future, the ban is a vital prerequisite step toward the many steps we must now take toward achieving ESM for all countries.

It is expected however, that ban opponent countries will continue their divisive and destructive efforts to weaken the Basel Ban while maintaining that they support ESM. Such a position must be seen as hypocrisy. The most likely method that opponents of the ban will employ will involve viewing ESM only in terms of downstream responsibilities of potentially importing countries and advocate accession to Annex VII for any country that possesses certain capabilities for disposing of wastes (see BAN Briefing Paper #3). What these countries are really arguing for are cheap disposal routes for their industry and short term profits at the expense of the recipient country's public health and environment.

The historic achievement of Basel's first decade must be maintained if we are to proceed with further progress in Environmentally Sound Management of hazardous wastes in the second decade. We cannot allow the ban to be weakened with false arguments that place the responsibility for the waste crisis away from those that generate the vast majority of the world's hazardous wastes. We must therefore maintain a unity in the face of greedy, bad-faith impulses by a handful of powerful countries and industries that wish to sabotage one of the centuries greatest achievements for justice and the environment.

There have been far too few success stories in the realm of international environmental law. We cannot allow one of the real steps forward to be eroded away. As much as we all have an urgent duty to create new, innovative ways to protect our children's future, it is even more vital that we protect and uphold the difficult gains that have been made.

To this end we must ensure that:

  • The Basel Ban enters into force;
  • It is implemented;
  • Efforts to undermine the ban via Annex VII expansion or the use of bilateral agreements must not be allowed.