The need to incorporate private investment effectively in international agreements on environment has never been greater. In virtually all countries of the world, the ability of states to invest public-sector funds in environment or development projects is diminishing, but the strength and presence of the private sector is increasing. Statistics make this clear. In 1993, foreign direct investment (FDI) from North to South amounted to US$64 billion, while official development assistance (ODA) had stagnated at US$59 billion. If this figure is adjusted to include portfolio investment, which stood at US$87 billion in 1993, private capital flows amounted to three times the size of ODA. In 1996 private flows were US$244 billion: four times the size of ODA (World Bank figures, in Chung, 1998:48).